# Rental property in €150k negative equity - and I now live in the UK.



## munchy (7 Mar 2013)

Earlier last year I changed my mortgage repayments which were totally unsustainable back to something which I could afford, so I cancelled the dd  and set up a standing order for an amount which matched the rental income. Sadly I missed two payments at the end of the year but the payment is still going through every month now. I had written to tell them  I was changing the payment at that time and didnt get a response. 

But recently I have gotten a letter saying that I am not considered to be "not co-operating" and legal proceedings will begin, and that I will have to pay 4500 fees.

This has been a jolt as I felt that as long as they have 'something' coming in every month, they would leave me alone. 

So, I wonder if anyone can advise me on what to do next or what happens next.

My husband and I have moved to the UK and I havent yet given EBS my new change of address - how would they feel about me being out of Ireland? I suspect that will make it worse.

When I spoke to someone back in January about my missed payment, the guy on the phone was very aggressive and when I said that I had rented it out he accused me of trying to benefit myself at the expense of the bank, and I explained that ALL the rent actually goes to EBS and I dont benefit as the rent is so much lower. He then posted me an application for a Buy-to-let mortgage but I am told I need to settle all outstanding debts on it first. Surely Im not the first person forced to do this and definitely cannot settle the debt?

When I took out the mortgage I was single but have recently married, and this has been one of the reasons I have been able to survive this long without an income as Ive been very lucky that my husband has been paying the bills.  Shall I tell the bank this? Does it affect my husband? (We have a prenup contract)

Any help and advice will be appreciated


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## cremeegg (7 Mar 2013)

You have given very little info here. There is a questionnaire on this site that you can fill in to get feedback.

The main issues are.

How much is the mortgage outstanding, how much are you paying each month, what is the rent.

How do the payments you are making compare with the interest charge on the loan.

Also what is your own income and cost of living position.

What communications have you had with the bank.

I am certainly very interested in your case because you have done what I consider the right thing, cancelled the dd and paid what you can afford.

Obviously the bank is entitled to ask for details to check that you are really paying what you can afford after reasonable living expenses. Have you communicated this with them.


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## orka (7 Mar 2013)

munchy said:


> set up a standing order for an amount which matched the rental income. Sadly I missed two payments at the end of the year





munchy said:


> he accused me of trying to benefit myself at the expense of the bank, and I explained that ALL the rent actually goes to EBS and I dont benefit as the rent is so much lower.


On the two missed payments, were they missed because you didn’t get rent? Or did you get rent and not pay it to EBS? 



munchy said:


> I felt that as long as they have 'something' coming in every month, they would leave me alone.


How much is the ‘something’ compared to (a) interest only and (b) what EBS expect to get each month if you are paying capital and interest?

Also, your title thread is a double negative 'I am not considered to be not co-operating' - so they think you ARE co-operating?  Are should it be 'I am considered to be not co-operating'?


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## ontour (7 Mar 2013)

It would also be worth clarifying the communications you had with the bank prior to cancelling the DD.


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## munchy (7 Mar 2013)

Thanks for showing interest in this everyone.  I am not "not-cooperating" apparently

I have two mortgages (one is an equity release mortgage) which are 1694 p/m in total.
The mortgage is 299605 in total.

I get around 900 euros a month in rent and pay them 700 a month. The reason for the lower amount is that I have a very high vacancy rate as there is a problem with a persistent leak which causes damp etc. (Ugh) My bank statements show no other form of income. Over the past few months I have tried to set up an online art sales business (with me doing the art) which brings in about 300-800 pm which is currently my only form of income. 

Before I changed my standing order over I wrote them a LONG 3 page letter which outlined my reasons and details, and the bank didnt respond except to acknowledge receipt of the letter. Unfortunately when I set up the standing order I did it by mail from UK and the BOI "customer services" (I use that term very lightly) did not action it and messed up the transaction but by the following month it was in place. This meant one month with no dd or sd but I wrote to EBS  to update and again, no response.

Then when my tenants moved out in Oct and I missed Nov/Dec  payments, and then corrected it again in Jan, I spoke to this guy at EBS who explained that there was nothing they could to to help. I asked about surrendering it (I really do NOT need it) and also maybe coming to another agreement, but he was mostly focussed on the fact that I had rented it out without EBS knowledge and I must change the type of mortgage.

The property is probably only worth 150k and so almost half the mortgage value.

I thought I could avoid a judgement or court case. 

What happens now that they have handed me over to their legal team? I am about to write to them now to express my dismay and was wondering whether to reveal my new UK status, address and also marriage status? 

Its such a mess


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## ontour (7 Mar 2013)

Is UK bankruptcy an option for you as it is already your centre of main interest?  My assumption is that you have limited income and no other assets that could be sold to cover the mortgage debt.


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## munchy (7 Mar 2013)

Thanks Ontour.
What concerns me about that is my husbands liability in that case. I tried to find out but all I could gleam is that in Ireland pre-nups are not recognized by law and its all shared assets and shared liabilities too. 
And I hate the thought of starting over here and being entirely un-creditworthy in the long term. I do want to own my own (viable) home one day


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## munchy (7 Mar 2013)

If they are "handing me over to their legal team", does anyone know what happens next? A day in court? Would the judge always give a judgement in these cases?


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## oldnick (7 Mar 2013)

I am angry at people who can but won't pay their debts in the hope of some deal from the bank.

You don't seem to be one of those people. You are evidently trying your best to at least pay the interest payments. And ,unless you have some vast hidden wealth, there is little more you can do at present.

This is probably not "correct" advice but my reaction to the bank would be to tell them that it is impossible at present to pay more than you are. Tell them you are temporarily in UK and that you prefer to return to Ireland  and are only letting the house temporarily in order for rent to help pay the inetrest.  
But if the bank puish you then obviously you'd have to reconsider whetehr its worth returning to Ireland and you may have no option to declare bankruptcy in U.K.

Don't mention hubby yet. And obviously write in a nicer way than my brief suggestion.

Munchy - many many people in your situation wouldn't be so considerate as you. 
Now married ,living in U.K. and being threatened by the bank would make almost anyone tell the bank to get lost - and become bankrupt.


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## PaddyW (7 Mar 2013)

As Old Nick said, you are being very considerate to this bank (pity they couldn't return it) and if it had been one of many other people they'd have been bankrupt by now. You're not messing around the bank, from the details you've given at least. Bankruptcy, if I was in your shoes, would be pretty appealing.


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## Bronte (7 Mar 2013)

munchy said:


> If they are "handing me over to their legal team", does anyone know what happens next? A day in court? Would the judge always give a judgement in these cases?


 
In your situation you have them over a barrell. 

You cannot afford the mortgage, you have no other assets and little or no income (and even that is very low and not consistent.

So what can they do to you. They can take you to court for an instalment order, but based on your income I don't see how they will get anything. 

I think you need to write a very clear letter to them telling them you are paying them whatever rent you receive (less expenses) ask them can you sell the property and *suggest* that if they don't agree to these suggestions you will be declaring bankruptcy.  There is no need to write a long history, just stick to the financials.  

Let's be clear on marriage and the rights or obligations it confers - this does not make you husband liable for your debts.


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## munchy (7 Mar 2013)

I am starting to think you may be right about this bankruptcy option, which always seemed so distasteful before this. I had also been holding out to see what the new Irish law was going to do about Irish insolvency. Is that an option or has it not been finalised yet?

Now to work out how to go about bankrupcy in the UK? I wouldnt have a clue where to start


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## Bronte (7 Mar 2013)

You'd be amazed Munchy how many people reading this thread wish they were in your situation.

There is no comparison between the new insolvency in Ireland and the UK process. You'd be out of this in a year as you're already resident there. And then you can start again more or less.


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## munchy (7 Mar 2013)

Ok, maybe a light at the end of the tunnel here..
Question though - is having a bankruptcy on my record not as damaging as having a judgement? In terms of perhaps getting a loan or mortgage again in 10 years, for example.


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## oldnick (7 Mar 2013)

Munchy  - there is a lot of threads/posts on this subject on this website. Read them and ask anything not explained already.


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## munchy (8 Mar 2013)

Hi all, Thanks for all the help and insight. 
I have been reading all the threads on UK bankruptcy and it seems that one can only declare bankruptcy on unsecured debt and not on a mortgage on a property. I have to persuade the bank to sell it first and then agree a loan agreement for the shortfall, which in my case may be deemed too risky. Maybe not an option for me right now?


Also, I read on a UK website that one has to be a UK passport holder (I need to double check that source) and also that most of the debt has been accrued in the UK. If I declare, I have no creditors whatsoever in the UK.  One has to list out all of ones debts and creditors - so I presume when I declare in the UK i simply register the EBS loan as my main debt. 

But since I dont have unsecured debt,  I wonder if I can rather try and avoid a judgement? Are judgements automatic? If I appear in court and show a judge that Im trying to pay something every month and have been cooperating, perhaps he may rule differently and Ill be spared a judgement? Im just not sure what happens next. I have compiled a long letter and collated more documents which I will send them on Monday in the hope that we can carry on as before without the need for legal steps.


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## ontour (9 Mar 2013)

Munchy,

I am not sure where you are getting the information from that it is only unsecured debt.

Have a look at the case studies on Steve Thatcher's site, they might explain the options more clearly.

[broken link removed]


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## Brendan Burgess (9 Mar 2013)

This is very confusing. 


> What concerns me about that is my husbands liability in that case. I  tried to find out but all I could gleam is that in Ireland pre-nups are  not recognized by law and its all shared assets and shared liabilities  too.



Do you own any property jointly with your husband? 

If not, then you are completely separate from a liability point of view. 

You need to set out all the facts in writing to the EBS. 

If I was in your shoes, I would make them the following offer. 

"I will sell the property and give you the proceeds in full and final settlement of all outstanding liabilities. In the meantime, I will pay you over all the rent less any expenses. If you do not accept this, I will give you the keys immediately and  I will go bankrupt in the UK, where I have been resident since ..."

If they are smart, they should accept this as it maximises their return. Unfortunately, they are not smart and will probably reject the offer. Alternatively, they may suggest that you can sell the property and talk to you about the shortfall afterwards.


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## munchy (9 Mar 2013)

Thanks all for the help and information. Ive spent hours now reading up on the Uk bankruptcy option

Brendan to just to clarify, my husband and I dont jointly own property but I wondered about the 'in community of property" marital law, but seems irrelevant in this case.

Setting aside the UK option for now, I would like please to be clear about the advantages of this over defaulting in Ireland which will result in a judgement and pretty much ignoring it. At this rate I doubt that we will ever return to Ireland so our local Irish credit rating is not a concern. How can I be penalized outside of Ireland? Can they affect any assets I might have in the future, say we buy a nice car or a flat in 10 years time in the UK - or are overseas (even EU) assets beyond their reach? Or is it that my UK & International credit rating is then tarnished forever?

I see how the UK bankruptcy option is the best for anyone planning to live and work in Ireland again but not for us who dont want to return. 

I appreciate that everyone agrees on the UK option, but I would welcome any ideas about the alternative, just at least so that I can best understand what I am doing. 
Many thanks!


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## Brendan Burgess (9 Mar 2013)

In theory, the EBS could  pursue you and any assets you acquire in the UK. In practice, they probably won't, but why have it hanging over you? 

What is the problem with going bankrupt? 

But even better, make the offer I suggested to EBS.


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## munchy (9 Mar 2013)

Yes, I will probably do so and call Steve Thatcher on Monday, but want to make an informed decision first. I didnt realise that they could pursue me for assests that arent in Ireland. Interesting.I thought by avoiding bankruptcy I could still maintain a credit rating abroad so I can still buy in a few years time and fear that lenders will never look at me, even after the 5/6 year stage. 

With the EBS, I have drafted a long letter to them now and will special delivery it on Monday.

But, I have been reading a lot on the forum and here and there Ive found contradictory advice. One was to *not *inform the banks of a forwarding address because they cant do much if they cannot contact me in person, and in other cases I see its best to warn them of my impending move and finally send them my home address in the UK. Im a bit unsure which is the best move in terms of my new residency status. Currently Im still using my Irish postal address and I sure do hope no-one (ie sheriff) comes to the door to look for me as very good, dear friends are receiving my mail


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## ontour (9 Mar 2013)

When it comes to pursuing you, the bank will probably find you whether or not you provide them your UK address.  There are companies that specialise in locating run away borrowers for the financial institutions, I have been amazed how quickly they find people.

If your contact address in the bank is your address in Ireland, you can't blame the bank if you are not receiving communications to your UK address.


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## munchy (10 Mar 2013)

I have been reading the various threads on UK Bankruptcy here, but also on UK websites and on several websites run by legal eagles, I found the following

 "_One form of debt you cannot include in bankruptcy are secured debts such  as a mortgage or charge on a property, however if the property is  repossessed, and there is a shortfall, the shortfall now is unsecured,  and can be included in bankruptcy."

_Am I to understand that I would need to get my property sold first before proceeding?There is advice here on this forum which states otherwise but I have no credit card debts etc, and only some money owed to revenue, so bankruptcy would only be for the Irish mortgage debt. 

My apartment is likely to take a long time to sell and also it may take as long to persuade EBS to accept a sale and shortfall deal.


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## munchy (11 Mar 2013)

Ontour - in terms of "finding me" after a judgement, is their objective to be able to summons me in person? Or to get me to acknowledge the debt? Or simply to give my new address to the bank so that can carry on pursuing it. Finding me is one thing, but making me return to Ireland is another thing. Is there anything else I should watch out for in terms of moving away and ignoring the judgement?


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## Bronte (11 Mar 2013)

Munchy you're all over the place on this. You can go bankrupt in the UK. This is the easist option for you. You're already in the UK so why don't you find a local bankruptcy practioneer and discuss your options with him. I'd imagine the UK is litered with such offices. Maybe a trip to the local Irish community center for a recommedation is a good starting point.  The quote I've seen for Irish people is 5K to go the UK bankrutpy route, but I imagine it's a lot less if you're already there as there is less to prove.  

As part of the bankrupty you must inform your creditors, ie the bank of your current location. (Two very wealthy prominent people fell at this hurdle - Sean Quinn and more surprisingly after this precedent O' Donnell solicitor). Look at the bankrupty threads on here for further advice and no doubt googling in the UK will also be helpful. 

I think Brendans advice to write to the EBS is also a good idea. See what they say, they cannot do anything to you by knowing your UK address, in fact this address will help them to actually deal with you in a more beneficial way as they will know the game is up with you.


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## munchy (15 Mar 2013)

I have been doing a lot of reading and researching and I have decided the best way is to forge ahead in making a deal with the bank. I have written to them.

But after much thought I feel that in my case I wasnt given a chance to engage in the MARP procedure, and now they have handed me over to their legal team, I am not sure where I stand. Is my case still with the arrears team or now in an entirely different department? 

1- I had a number of telephone conversations end of Dec and early Jan about my missed payment and I was given a 1 week ultimatum to get in sorted and also pay an extra amount towards arrears and I did that. If they have recorded the calls they will hear their own guy saying that the new payment amounts "seem ok" and agreed to what I was doing. 

2- But he was pretty aggressive about the fact that I had moved out in order to get some rental income to pay the bank and said Id need to apply for a BTL mortgage. A week later he confirmed that my standing order & one off payment had been received and also attached a BTL and financial statement for me to fill in. It stated that in order to apply for the new mortgage I would need to pay all arrears and need at least a 25% deposit. Impossible in my case so I didnt apply of course. 

3- A few weeks later I get a letter saying Im being handed over to the legal team as Im not cooperating. 

I do feel that I was never engaged in any sort of process and I also think my repayments were acceptable as they were coming in regularly. Im overall 10 k in arrears because of the underpayment rather than missed payments (although there have been a couple)

I wonder if it is now worth disputing this and somehow demand that they engage with me properly instead of handing me over to the legal team? If they were doing it because of an inability to pay then that would make sense, or because Id stopped altogether but I havent. I have written to them a few days ago but I didnt raise this issue and instead just outlined my situation and asked for us to reach an agreement as Im ready to move away etc.


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## munchy (28 Mar 2013)

Brendan, I wrote to the EBS on the 11th March and also filled in a SFS form outlining my financial details, with the specific target of getting my repayments down to interest-only. Its been nearly 3 weeks now and I have not heard anything back from them. I really want to engage with them and get the MARP process underway and get those repayments down to interest-only - and nothing but silence. 

Its a worry. Does anyone have that experience with the banks and/or EBS? Will I perhaps notice reduced amounts (ie interest only) on my statements one day? Or does this lack of communication from the bank signify legal proceedings are underway? 

After much kerfuffle I decided that the best recourse was to push for an agreement with the bank rather than opt for insolvency or judgements etc immediately.


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## Kine (28 Mar 2013)

I have been engaged with my lender since 2011 and still have received nothing officially in writing from them! Will take them longer then three weeks for a few reasons:

1) They're still waiting to see how the PIA pans out;
2) They're still waiting for another bank to make the first move so they can just follow; and 
3) They simply don't know what to do.

K


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## Gerry Canning (28 Mar 2013)

Munchy, looks like you need good advice on Roi options. And since your main centre of interest is in UK , you need linked uk advice.
I have seen Frost DEbt Solutions 0749364000 give good cross-border advice.
Might be no harm to ring them . @ least the answer will be from a practising Debt Company.You can still then decide.


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## munchy (1 Apr 2013)

Salmon - great looking website they have, and looks as though they dont charge a fee either.
The trouble with them ignoring my messages and mails is that they continue to charge me the much higher capital repayment rather than the interest-only option that Im asking for. In effect the arrears look much worse than they are because it isnt interest-only and my situation obviously will get worse and worse as I get overcharged every month.


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