# Will banks chase the debt?



## the pops

My next door neighbour is from Australia, husband is Irish and they both lost their jobs about 2 years ago.  He was a plasterer and she worked for a company that did sourcing for Dell.  They used up all their savings to cover the mortgage (variable rate) and after trying unsuccessfully to rent out the house for a reasonable amount, they have decicded to sell and move to Australia as things here are not going well for them.

  Anyway the house is in negative equity by about 50k (bought at 250k) and they are pricing accordingly and there has been some interest.  The bank have said they will not release the keys until the debt is fully repaid but anecdotal evidence suggests they will turn the remaining amount into a personal loan if pushed.  Now she has basically said to me that if they sell and are left with this 50k shortfall that they dont intend to pay it once they get to Australia as they will not be returning bar at christmases.  She feels they gave the bank all their personal savings once and do not intend to do it again.

Is this actually possible for them?  Surely the bank will chase them to Australia for the 50k? It is a lot of money in my eyes.  I have mixed feelings on this as though they should pay the money back I see where they are coming from in that they lost everything trying to pay their way in the hope the work situation would improve, it didn't and now they have an opportunity to start again.  But I suppose my main question is are banks willing to go abroad to chase their money?


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## JoeB

I feel the bank may chase them. Australia is a country with a strong rule of law. But it's not easy for the bank... I'm unsure how the Australian courts would view it. There may be a reciprocal arrangement of some type, for chasing bad debtors.

Being married to an Ozzie isn't sufficient by itself for Ozzie residency.. so the husband could be booted out, in which case he may have to come back to Europe or Ireland.

Coming home for christmas may be a non runner, especially if you're found to be in contempt of court for not appearing at court cases, and a warrant is issued for your arrest,.. I don't know if that can happen. If it can you could be arrested at the airport. It would be very difficult for the bank to serve a summons on you though, but not impossible.

You have to be very careful not to identify yourself, as the banks likely read these forums.

I disagree with what you're doing, but understand that it may be the only way. The bank may refuse to release the deeds, especially if they know that both people are unemployed, and one of the people is Australian.


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## the pops

In fairness Joe I don't mind who reads the post as it is nothing to do with me.  I am talking about my neighbour.  I was just opening the issue up for debate.  I personally think for an amount of 50k the bank would be motivated enough to pursue them, but I could be wrong


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## peteb

And what if the bank don't consent to any sale? Then it wont just be 50k that be the problem!


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## Time

> Coming home for christmas may be a non runner, especially if you're  found to be in contempt of court for not appearing at court cases, and a  warrant is issued for your arrest,.. I don't know if that can happen. * If it can you could be arrested at the airport.* It would be very  difficult for the bank to serve a summons on you though, but not  impossible.


Rubbish. Unless a person has had notice of the proceedings they cannot be arrested under any circumstances. Also the case would never get to a committal stage with the person abroad. Also the Gardaí do not keep a list of debtors at the airport, believe it or not they have much better things to be dealing it. The OP's neighbour would have no problems coming home for holidays.


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## Greta

If they manage to sell and convert negative equity to an unsecured personal loan, it might be worth for them to move to Britain first and get bankrupt there, before starting a new life in Australia.

However, I am not sure but the husband's bankruptcy could then prevent him getting Australian residency.

I really feel they should do some research first, consult with international lawyers, to decide on the best course of action, rather than just blindly deciding not to pay, no matter what, as it could backfire.


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## the pops

Time said:


> Rubbish. Unless a person has had notice of the proceedings they cannot be arrested under any circumstances. Also the case would never get to a committal stage with the person abroad. Also the Gardaí do not keep a list of debtors at the airport, believe it or not they have much better things to be dealing it. The OP's neighbour would have no problems coming home for holidays.



I did think it unlikely myself that a "wanted" poster would be up in Dublin airport.  I do think a reciprocal agreement between the Irish and Australian courts could be more likely as both are common law countries. But again I am only guessing


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## the pops

Greta said:


> If they manage to sell and convert negative equity to an unsecured personal loan, it might be worth for them to move to Britain first and get bankrupt there, before starting a new life in Australia.
> 
> However, I am not sure but the husband's bankruptcy could then prevent him getting Australian residency.
> 
> I really feel they should do some research first, consult with international lawyers, to decide on the best course of action, rather than just blindly deciding not to pay, no matter what, as it could backfire.



I think you have to be living and working in the UK for a year to enter bankruptcy procedeures.  If they can work there then the bank would not allow them to go bankrupt


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## Bronte

What they need to do now is get the bank's agreement to sell so that most of the debt is paid off. The bank may agree to the negative equity being transferred into a personal loan, but at the current mortgage rate and maybe even the current term which would be a very doable amount and could no doubt be done from Australia. Banks are doing deals but it's not publicised. Naturally enough they had better not mention Oz but the fact one of them is non national will make the bank suspicous. 

In relation to doing a runner many people have left, we have had no evidence of banks chasing debtors to Oz. For 50K it wouldn't make sense. Costs would outweight benefit to the bank. 

Nobody will ever be arrested at the airport returning to Ireland for debt issues. There is not one person who has a warrant for arrest in relation to debt. They cannot even get Michael Lynn. Even if there was a warrant for someone, you'd want to be an axe murderer before you would be arrested coming through airports. 

When they are in Oz they will find many Irish who have done the same thing. It would be helpful to others on here if you could report back on how they deal with the bank, the sale, and leaving Ireland.

To what end does it serve a bank to chase two unemployed people who cannot afford to repay 50K. If we had a proper bankruptcy system in Ireland this couple would be able to sell the house and write off the 50K and start a new life after a short 'punishment' time. People need to move on with their lives.

For their own peace of mind if they manage to get the bank to do a deal on low repayments on the loan, they might as well pay it off over time to have a clean slate. Hope things work out for them.


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## Time

Indeed Cruzer some people think the banks have the resources of the CIA to track people down.

The banks can't even find people in Ireland that have abandoned ship let alone Australia. Some people give the banks far more credit than they deserve.


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## Bronte

Nevertheless it doesn't mean that in a couple of years when the banks have sorted out the current mess that they start chasing people to Oz, or selling the debt to people who can chase the debt. 

Remember the UK bubble of the eighties.  People handed back the keys.  Banks 'wrote' off the debt.  Then people suffered for a while, recession ended, they got jobs and purchased again and what happened?  Before the statute of limitations was up the Banks starting chasing those who had done well for themselves.  

So those that go take note, make sure the time limit has run out before  you buy assets or come back etc.  And if having become citizens/naturalised/ etc in Oz look into going bankrupt there on your Irish debt as you never know you might want to come back.


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## Time

6 years is not that long to wait in the great scheme of things.


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## JoeB

Of course the banks themselves appear incompetent,.. but they'll eventually figure out how to open the yellow pages and call in a professional, international debt collecting agency, which has contracted solicitors in the major countires, and experience of the different court systems, and private investigators to locate people and serve summons. The debts will likely be large enough for that. Do such international debt agencies exist?

Or it could be that you cannot get blood from stones, and that writing off debts is more practicable.

It's just so terrible the situation, that many people simply cannot afford to pay, because the debts are unrealistically large.


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## JoeB

It's a big problem if we don't have a system of identifying people with arrest warrants when they use their passport to enter the country.

How do we stop terrorism? Surely it's possible to attach warrants to passport numbers?

If you are served a summons in a foreign jurisdiction, and fail to appear in court, can you be found to be in contempt of court and a warrant issued for your arrest? 

It's not a debtor the police are looking for, it's someone with an arrest warrant for contempt of court. Are arrest warrants graded in any way, i.e very serious offences as opposed to others? People charged with murder and hiding in non-extradition countires?, we must have a system for identifying them on re-entry.


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## Sunny

I am saying banks will *always* chase debts to Australia but I am aware of cases where they have. They can get judgemnents here and have then enforced in Australia and I have also heard cases of where an Irish debt was passed on to an Australian debt collection agency.


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## Time

> If you are served a summons in a foreign jurisdiction, and fail to  appear in court, can you be found to be in contempt of court and a  warrant issued for your arrest?


Wrong Joe on so many counts. Arrest warrants are not issued for failing to turn up for civil cases. You cannot be served an Irish summons overseas esp in relation to civil matters like a debt. That person is outside the jurisdiction of the Irish courts and is under no compulsion to attend. That is why they have to enforce where the person is resident.

Found this on another forum and it applies equally to irish debts.


> There is no recipricol arrangement between Australia and the United  Kingdom over personal debt in the UK and that also works for debt run up  in Australia being unenforcable in the UK. The two countries operate  very differently in terms as to how credit is applied.
> 
> Neither will affect the credit rating in another country because of  jurisdiction and the seperate laws that operate in terms of personal  credit though will really mess up the rating in the country in which it  was taken. A source at Baycorp who is Australia's equal to that of  Experian who tells me the following.
> 
> Though it may be possible to find people, it is a prohibitively  expensive route for most UK lenders and any costs using an Australian  agent to pester you a bit are non recoverable and debt is usually  written off or suspended in anticipation that you may return to the  country in which it was run up.
> 
> Even if an Australian agent is used to try and get the money back, laws  in Australia prevent them from being excessive or intrusive unlike the  UK but they have no power of collection. For an agent to tell you it is  enforcable or it can affect your Australian credit rating, is a serious  offence under Australian law the same as laws in the UK are designed -  though inadequately in comparison - to prevent such occurances.
> 
> As it is personal debt, you cannot be extradited over it because it is  beyond jurisdiction. The only exception to recipricol arrangement so far  as owing money is concerned is anything thing to the government  directly in issues related to revenue and customs or other government  agencies i.e. tax, child support etc.
> 
> It really is a matter of conscience.


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## Sunny

You don't need recipricol agreements over personal debt. Court Judgements just need to be enforceable in the jurisdiction involved and they can be.


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## Time

Indeed, but how do you get a judgement here if you cannot properly serve the people involved? 

People often fail to grasp the fact that the costs of enforcing in a foreign jurisdiction are often prohibitively large for a bank not to bother. Why waste all that money if you still won't get paid at the end of the day?


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## the pops

Some very interesting responses on this issue and I just wanted to post an update.  The couple received an offer but as it turned out the buyers were not mortgage approved so back to the waiting game.  In terms of what they are planning to do or not to do as the case may be, the plan is still Australia and they are starting to set things up on that end.  She is already likely to be employed in her old company when she goes back as it is still run by the same people and she is still on very good terms with them.  Plus no sign of a recession there so they are hiring (god do you think we will ever be able to utter those words again in Eire!!!).

She said she has every intention to stay for the duration to sell the house for the most reasonable price possible so as nobody bank included gets left with a bad shortfall, but in terms of paying back any shortfalls post sale they are not interested though they will obviously not utter a word of that to the bank.


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## Bronte

Sunny said:


> I am saying banks will *always* chase debts to Australia but I am aware of cases where they have. They can get judgemnents here and have then enforced in Australia and I have also heard cases of where an Irish debt was passed on to an Australian debt collection agency.


 
Can you give more info on this Sunny?


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## Time

> Australian debt collection agency


Like all debt collectors they are powerless.


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## flattea2

Probably slightly off-topic but there was an interesting article in the Economist this month, basically stating that Austrailia was in a ‘natural resources’ bubble due to demand from China and Asia. I think anyone considering going should bear that in mind. It may last years, or it may last 6 months. Certainly there is plenty of opportunity but global commodity prices are coming down. There is an economic slowdown due in China according to many sources.

Just something to consider for those looking to up sticks and sail away.


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## csirl

Time said:


> Indeed, but how do you get a judgement here if you cannot properly serve the people involved?


 
Quite easily - service by registered post to the house concerned. If no response, will end up as a default judgement - probably in the Masters Court - at very little cost to the bank - probably in the €1,500 to €2k range for the bank.

Once a bank has a judgement, it can sit on it and wait until the person comes into money at a future date. If and when the person is back on their feet in Australia and has sufficient means to repay, then it may be worthwhile for the bank to get the judgement enforced locally, probably with a load of interest piled onto the original amount.


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## Time

Who would sign for this registered letter? Personal service would be needed in high court. There be the problem.

In any case if a person disappears off the face of the earth the banks will have a hell of a job finding them. Not cheap to find someone who is determined not to be found. I personally know many who have done a runner and are living very nicely far far away from the jurisdiction of the Irish courts.


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## csirl

Time said:


> Who would sign for this registered letter? Personal service would be needed in high court. There be the problem.


 
Personal service is not required for the High Court in such cases - service can be effected by simply nailing the summons to the front door - see extract from High Court rules below:


_11. Service of a summons in an action to recover land may, in the case of vacant possession, when it cannot otherwise be effected, be made by posting a copy of the summons upon the door of the dwellinghouse or other conspicuous part of the property; provided, however, that in such case before any judgement by default shall be given, the Court shall be satisfied that there was no person in actual possession or in receipt of the rents and profits on whom other service might have been effected._


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## Time

That is for repossession cases. For vacant houses nailing to the door is allowed. 

The bank would have to crystallise the shortfall as a judgement debt. They would have trouble doing so as the house they had as the last address has been now reprocessed and sold.


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## csirl

Time said:


> That is for repossession cases. For vacant houses nailing to the door is allowed.
> 
> The bank would have to crystallise the shortfall as a judgement debt. They would have trouble doing so as the house they had as the last address has been now reprocessed and sold.


 
Order would simply say that house is to be repossessed and sold with judgement against the owner for the shortfall - probably give a stay on recording of the judgement until after the sale of the repossessed house so that the exact figure owed can be quantified. But the important thing is that the original summons to repossess would have been served legally by nailing to the door, so any consequential orders, including judgement for the shortfall owed and any legal fees, interest etc. would be enforeable.


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## Time

> any consequential orders, including judgement for the shortfall owed and any legal fees, interest etc. would be enforeable.


No, they would not be. The order given is for possession only. They cannot piggyback onto the back of that originating order. Can you quote me some high court cases where this has been allowed? Or are you just guessing? 

The courts and banks cannot make up the rules as they see fit.


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## minion

I have a friend from Brazil who has been living in Ireland for the last 20 years.
He bought a house in Ireland in 2006 which is now suffering, along with the rest of his estate from pyrite.  Homebond will not pay.  House insurance will not pay.  He was in negative equity anyway, and now with the pyrite its worthless as it cant even be sold at a loss.

He has invested in property among other things in Brazil over the years, so he has nothing apart from the house in Ireland now.

So his plan now is that he will just leave the house some day in the next few months and go home to Brazil and make a life for himself there.  He reckons he can life like a king on what he has squirreled away there over the years.

He wont even tell the bank when he goes.  One day they will just realize that the house is now theirs. 

So they might chase him, but i doubt they'll get very far.


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## AnyAdvice

Wouldn't it be great if this happened to one of our fine banks?

[broken link removed]


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## the pops

Update on this.  The couple have had no more offers on the house due to lack of martgages being granted and the last offer they received would have left them 75k shortfall.  The wife has taken the son and gone back to Oz to start work in her old firm and get a place together for renting.  He is going to stay behind and try rent the house and then head out asap.  From talking to him, they are very demoralised with the situation they have found themselves in Ireland and will certainly never come back to live here.

I told them some of the advice I found on this thread and told them at least they will have better weather for the rest of their lives


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## peelaaa

Time said:


> 6 years is not that long to wait in the great scheme of things.


 

I thought it was 12 years for debt to be written off in ireland


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## Time

6 if it has not been to court. 

12 years from the court date if it has been to court.


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