# Bankrupt in Northern Ireland - still have properties in RoI



## Josie100 (19 Aug 2017)

I am going to put my query in bullet points for easier reading because my case is a bit complicated. Thanks for your patience

Our situation:

·  My husband and I are Irish passport holders and live in Northern Ireland

·  We are 2 normal PAYE employees

·  Had a property portfolio pre-2008 – rental properties, small houses

·  We got into severe difficulties post 2008 with over extended business loans resulting in a lot of hardship and eventual bankruptcy in 2014

·  We also had 2 buy to let (holiday lets) in Co Donegal

·  These were bought for 152,000 and 138,000 Euros each. Mortgages were with AIB

·  We initially had a 5 year reduced interest rate but when the 5 years finished we were already in difficulty in the North with our other properties and started falling into arrears

·  Current Arrears are 30,000 and 20,000 Euros respectively

·  Current worth (if they would sell)  approximately  100,000 Euro each

·  The properties are let for approx. 10 weeks a year and incur associated costs like LPT, Management fees,Water Tax, Utility bills, House insurances, TV licenses and maintenance costs. So any associated profits are fairly minimal and have helped us make repayments towards our bankruptcy.

·  The Official Receiver in Northern Ireland gave up all claim to the properties in RoI

·  Both houses have been for sale for 4 years

·  AIB has recently sold our mortgages to Goldman Sachs and Pepper Assets are managing them now

·  Pepper  now asking for Customer Due Diligence Proof of ID to be forwarded to them

·  Any ideas what Pepper’s next steps are likely to be with us? Since we live in UK and are currently bankrupt.

·  Would Pepper be open to giving us a restructured mortgage given that we are bankrupts?

·  We would not be able to get new loans from another provider because we are bankrupts.

·  Could we sell the houses at a very reduced rate and settle with Pepper?

·  Should we propose to Pepper or wait and see what Pepper propose to us?

·  Should we provide the Customer Due Diligence forms as requested?

·  My ideal scenario is this – debt forgiveness and a restructured mortgage.  Is this even possible?

·  I am open to any other ideas as to how to deal with my situation.

Thanks


----------



## Thirsty (24 Aug 2017)

Don't fill in their forms; they don't need that information.

Pepper are dreadful to deal with. 

I don't fully understand bankruptcy proceedings, but I thought that all your assets are included. How come you still have ownership of these properties?


----------



## Brendan Burgess (24 Aug 2017)

I am not an expert, but as bankrupts, you no longer have any interest in these properties. They are not yours. Walk away from them. 

Goldman Sachs will not restructure your mortgage - but you don't have a mortgage anymore. They will just seek repossession and try to sell them. 

If you have the means and you are discharged from bankruptcy, you could offer to buy them from GS, but you should have learned by now that property investment is risky. 

Brendan


----------



## Josie100 (24 Aug 2017)

Thanks for replying. It was a surprise to us also that the Official Receiver in N. Ireland gave up all claim to the holiday let properties. I can only surmise that the fact that the properties were in ROI meant that it was too difficult to manage the disposal etc. Anyhow we still have them. My main query was really how to deal with Pepper. Whether we approach them with a proposal or wait for them to approach us with a proposal. I take the point about property being risky. Bankruptcy is a great leveller and our lives like many others have been affected greatly. But we choose not to be victims and we are nearly through to the other side of bankruptcy. The repercussions will be felt probably for the rest of our lives though. So yes, property investment is very risky. Thanks for feedback


----------



## Brendan Burgess (24 Aug 2017)

Josie100 said:


> Anyhow we still have them. My main query was really how to deal with Pepper.



Hi Josie

But that's it. I don't believe you still have them. 

Your debts disappeared when you went bankrupt.  The properties could have vested in the Official Receiver but he chose to ignore them.

Unless they are in significant positive equity, you should have no further interest in them, and so send a copy of your bankruptcy certificate to Pepper.

Brendan


----------



## Josie100 (24 Aug 2017)

AIB were informed of our bankruptcy also but have continued to deal with us with respect to the arrears for years now.  Our names are still on all correspondence. Maybe this is an unusual situation? I guess we just wait for Pepper to react and then we will know what our longterm situation with respect to the properties actually is. If we need to walk away then we will. Nothing to lose either way.


----------



## Adecco (24 Aug 2017)

I didn't read all your post in detail. But if you are bankrupt then legally ALL assets and liabilities are in the pot when bankrupt.

As I said I didn't read the detail of your post - but if it is not your interest to keep them then just walk away.
Ignore anything to do with them. Direct any correspondence to the OA.  I think legally they are not even allowed contact you once bankrupt.

In saying that presumably these should have been included in the bankruptcy form and the OA should have taken control of them at the time. It seems really odd that the OA did not take them.


----------



## Brendan Burgess (24 Aug 2017)

Adecco said:


> It seems really odd that the OA did not take them.



Why? If they were in negative equity, he would just tell the lender that he had no interest in them.


----------



## TLO (25 Aug 2017)

The Official Receiver (OR) took the view that two negative equity holiday homes, rented for 10 weeks a year, are of no value.  The OR's position, having declared the properties "onerous", is that it is up to the lender the repossess and sell the properties.   

And if the lender doesn't repossess?  Josie100 continues to be the registered owner of the properties, is *not* responsible for the mortgage, but should take responsibility for paying usual utilities such as electricity, LPT, management company etc.  And this situation could go on for years until Pepper/Goldman Sachs obtain court orders for possession.

Restructured mortgages to former bankrupts, for buy to lets that rent for less than three months a year, are extremely unlikely.

A tidy up exercise would be to sell the properties at a market price, which could be as low as €20k, and move on.  Any shortfall is taken care of by the bankruptcy, so no settlement with Pepper is needed.


----------



## Brendan Burgess (25 Aug 2017)

TLO said:


> Josie100 continues to be the registered owner of the properties, is *not* responsible for the mortgage, but should take responsibility for paying usual utilities such as electricity, LPT, management company etc. And this situation could go on for years until Pepper/Goldman Sachs obtain court orders for possession.



Hi TLO

That is very interesting.  I didn't know the mechanics of it.

So Josie just ignores the mortgage completely. But he can collect rent and pay bills if he wants to. 




Josie100 said:


> · Pepper now asking for Customer Due Diligence Proof of ID to be forwarded to them



Josie declines any of this. 

When Pepper seeks to get an order for possession, Josie can co-operate or not as he sees fit. 

Brendan


----------



## TLO (25 Aug 2017)

Brendan Burgess said:


> So Josie just ignores the mortgage completely. But he can collect rent and pay bills if he wants to.


Exactly.

Also, it's important that Josie doesn't send anything in writing to Pepper, apart from a copy of the Judge's bankruptcy order.  There have been instances in England and Wales whereby former bankrupts have inadvertently reaffirmed mortgage debt that had been written off at the start of the bankruptcy.


----------



## Josie100 (27 Aug 2017)

Many thanks for all the good information. Pepper have started ringing me this week and leaving messages to call back. I haven't to date. Do you think I should?


----------



## Josie100 (2 Sep 2017)

Josie100 said:


> Many thanks for all the good information. Pepper have started ringing me this week and leaving messages to call back. I haven't to date. Do you think I should?


Just wondering if it would be a good idea to engage a mediator to represent me in dealing with Pepper?


----------



## TLO (4 Sep 2017)

Josie100 said:


> Just wondering if it would be a good idea to engage a mediator to represent me in dealing with Pepper?



Hi Josie100, it depends on the outcome that you are hoping to achieve.  So, what would be your preferred end result?


----------



## Josie100 (4 Sep 2017)

Ideally I would like to be able to keep one or both houses. My son who has just got his first job would be prepared to take a mortgage to enable this. Obviously this arrangement would have to involve some debt forgiveness.


----------



## Brendan Burgess (4 Sep 2017)

Your son could contact Pepper and offer to buy the property from them. But he would have to get a mortgage from someone.

He should not pay more than the market value. 

Just to repeat - you have no further ownership of this house and you do not have any liability for the mortgage. 

Brendan


----------



## Josie100 (4 Sep 2017)

Ok noted. Thanks Brendan


----------

