# Strategic Default



## AnyAdvice (16 Jan 2011)

I am reading alot lately about the increasing number of "strategic defaulters" in the US. This seems to be an option that a certain percentage of mortgage holders in the US are following and I'm guessing that with mass unemployment in Ireland and emigration expected at 100,000 for 2011 that many of these emigrating with large mortgages in negative equity will decide to strategically default even though they may have good jobs in Canada, Oz etc. What are the practical implications for such mortgage holders? 

How will Irish banks track these defaulters?
What kind of methods does the bank use to track mortgage defaulters?
Will the debt follow the mortgage holder to Oz etc even though they might have no desire to return to Ireland?

Defaulting on your debt used to be a taboo however in my opinion, I reckon it will become a popular trend in Ireland over the next 18-24 months and will force some sort of debt forgiveness by the banks/Govt/ECB as predicted by David McWilliams so it would be interesting to hear from anyone who is or plans to strategically default.

Thanks in advance for your responses


----------



## PaddyBloggit (16 Jan 2011)

Do a search of AAM ..... lots of threads lately about people who are considering defaulting.


----------



## AnyAdvice (17 Jan 2011)

PaddyBloggit, I agree with you that there are alot of threads with people considering defaulting however I've searched extensively and there is very little practical and concrete knowledge about the topic. 

The attitude appears to be...."I'm running away from this and hoping for the best" instead of making an informed decision i.e. my initial post touches on a couple of the questions that potential defaulters should understand before going through with it. 

Do you agree?


----------



## Bronte (17 Jan 2011)

I've asked many of the posters who have done a runner and who are considering doing so to post back their experiences.  So far no one has replied.  I'm guessing those out there is Oz etc reading this are living a new life, want to forget the old life and forget about the debts and are therefore not willing to reply.  A situation I empathise with.  I wish one of them would reply, they could always PM me and then we could give good advice to those who are contemplating going.


----------



## cormirl (24 Mar 2012)

AnyAdvice said:


> PaddyBloggit, I agree with you that there are alot of threads with people considering defaulting however I've searched extensively and there is very little practical and concrete knowledge about the topic.
> 
> The attitude appears to be...."I'm running away from this and hoping for the best" instead of making an informed decision i.e. my initial post touches on a couple of the questions that potential defaulters should understand before going through with it.
> 
> Do you agree?



Its a very taboo subject in Ireland. People begrudge anyone trying to escape from their debt while everyone else is left paying the bill. I doubt very much the banks will extend there limited resources overseas to chase loans in the imidediate future if at all. Your best bet is to get them to aggree a shortsale ,if they come after you for a short fall you can always threaten bankruptcy as a last resort.But for your own peace of mind try to negotiate something,that way you won´t be looking over your shoulder so much as you continue on with your life.


----------



## Wibblywobbly (24 Mar 2012)

What about strategically defaulting while remaining at home?

The banks and financial institutions have the power until you lose your credit rating and get a few judgements against you, then the power balance shifts and meaningful negotiations can take place fir settlement or realistic payment plan.

It's a shame that it must get to that stage before a deal can be reached


----------



## IOU (25 Mar 2012)

Bronte said:


> I've asked many of the posters who have done a runner and who are considering doing so to post back their experiences.  So far no one has replied.  I'm guessing those out there is Oz etc reading this are living a new life, want to forget the old life and forget about the debts and are therefore not willing to reply.  A situation I empathise with.  I wish one of them would reply, they could always PM me and then we could give good advice to those who are contemplating going.



Hi Bronte,
I have been reading the site for many years and I have  always noticed the great advice you give people so I figured that I'd  register to answer your question about what happens to someone who  emigrates and defaults on their debt in Ireland.

I emigrated to the US 2 years ago due to family circumstances. We left behind a loan of E30,000. I'm ashamed to admit that. 

We  were in the US for about 3 months when we got a letter from a debt  collector in the state we live in asking for this loan to be repaid.This  debt collection agency specializes in tracing International defaulters.  There was no way that we could afford payments so we stalled by asking  for the debt to be verified. A month or so later , we received all  documentation and our signatures from the Irish bank in question.

We  didn't respond and now 2 years later, we get letters every few months  from the debt collection agency threatening to sue us for the money. The  wording always states that if we don't pay, they MAY take us to court.

I would love to repay this money , but now I believe that the debt has been bought by the debt collection agency in question. 
I  know that the Debt collectors found our US address from our US credit  reports. because it showed up on our credit files when they pulled them.  Also, my name and husbands surname combined is quite unique. They also  knew that my husband is American.

So, to be honest, I don't  believe many Irish people would have to be worried about being found  over here. Morally though,defaulting makes you feel like s*it.


----------



## munchy (25 Mar 2012)

IUO - if it showed up in your credit files, did that affect your credit rating in the US?


----------



## IOU (25 Mar 2012)

Hi Munchy,

It showed up on our credit files as an inquiry, a note was entered on my husbands file under collections but there there are no details of the debt entered other than the name of the collection agency.
I don't believe it affected our credit rating.


----------



## Time (25 Mar 2012)

Until they have an Irish judgement there is very little a US debt collector can do. The bank is not going to shell out money to see if they can get a small amount of money out you eventually. It is a real long shot and not many banks are prepared to do this unless they know for sure there is a big pile of money available to pay them. They have hired Columbo to find this out for them.


----------



## mcloving (25 Mar 2012)

Time said:


> Until they have an Irish judgement there is very little a US debt collector can do. The bank is not going to shell out money to see if they can get a small amount of money out you eventually. It is a real long shot and not many banks are prepared to do this unless they know for sure there is a big pile of money available to pay them. They have hired Columbo to find this out for them.



Would this apply to debt of a higher amount such as 100k or 1 million for instance? Or would they take this more seriously.


----------



## Time (25 Mar 2012)

They would only act if their US investigator aka Columbo finds out the person has property or other means to get their money back.


----------



## IOU (25 Mar 2012)

We are hoping to close on a house soon, do you think that they might attempt to place a lien on the property?


----------



## Time (25 Mar 2012)

They won't be able to. No judgement, no liens.


----------



## IOU (26 Mar 2012)

That's good to know, thank you!


----------



## Steve Thatcher (27 Mar 2012)

Time said:


> They won't be able to. No judgement, no liens.


 
Hi Time, how do we know there has been no Judgment. IOU left behind a loan of €30,000 when she moved, it is unclear whether or not a judgment was obtained on the default of this.
If it has I think that it could be possible albeit expensive to get leave to enforce the judgment in the USA.
This would be more likely to happen for €1m than 30k but it worth pointing this out.

Steve


----------

