Case study About to go into arrears for second time

J

javanaise

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Income details
Net monthly (i.e. after tax) Income I currently have no income. I am on a career break from a job in the public sector that lasts until June 2014.
Income history: I was working as an English Language Teacher until mid-november. The stress of the mortgage has contributed to poor mental health and I am currently an inpatient in a mental health unit. I have applied for Illness Benefit (188 per week). I receive 800 euro rent towards my negative equity property. The mortgage is 950 per month
Net monthly income partner/spouse: Single
Income history:
Amount of child benefit received (Should be €130 per child) None
Amount of Mortgage Interest Supplement received (MIS is the social welfare payment to unemployed people, don't confuse with TRS) None

Personal circumstances so we can calculate your reasonable living expenses
The Insolvency Service has published Guidelines for reasonable living expenses based on the family size, whether or not you need a car for work, childcare costs and other exceptional circumstances. By filling in this information, we (or you ) can calculate what your reasonable monthly living expenses should be.
One adult family or two adult family Single, no family.
Do you need a car for work or do you use public transport?
Number of children 0- 2 years old:
Number of 3 years old children:
Number of 4 - 11 years old:
Number of 12 - 18 years old:
Monthly childcare costs:
Montly spend on special circumstances: e.g. exceptional healthcare costs



Home loan 260k
Lender: BOI
Amount outstanding: 260k
Value of home: 95k
Interest rate: specify whether tracker or SVR or fixed rate Variable. Exact rate unknown
Monthly repayment 950
Amount in arrears 0 (about to go into arrears)

Summary of discussions and agreements with the bank: Sent them solicitors letter regarding outstanding arrears (said arrears were capitalised three months ago). Wished to sell the apartment and for the banks to take this as final settlement. Bank refused, responded that I would remain liable for any shortfall.


Credit Union 5k
Amount of shares 1700
Amount of loan outstanding 5k loan
Monthly repayment 150
Term left approx 3 years (sorry, typing this all from hospital, files not currently available)


Other loans and creditors - delete those which don't apply to you
Overdraft - 400
Credit Card - 500
Credit Card - 25


Other savings and investments

Do you expect any lump sums in the medium term future?
No


How important is retaining the family home to you?
Not important at all

I don't care about keeping the family home.

Any other relevant information
The apartment is currently my only property. The tenants who rent with me are leaving. The external wall of the apartment is leaking and the builders won't fix it (they have gone bust). i can't manage this debt any more, I see no reason, and I'm wondering what my best bet is. Should I go to the UK? I am single, this is my only asset. What are the consequences of handing back the keys...will the bank write off the shortfall? I have absolutely no desire to retain this property, it has been nothing but trouble since I bought it in 2007, has cost a fortune, and I cannot find either lodgers or tenants because of the leaking walls. I want to get on with my life, the stress of this has landed me in hospital.

What is your preferred realistic outcome?
I want to get rid of this burden as I never see it being anything other than a problem for me. What are my options if I stay in Ireland? Would I be better going to the UK? Thanks everyone
 
Sorry to here abount your difficulties and health problems. Yes I agree that the mortgage is a burden and will need to be dealt with. Your primary approach here is to hand the property over to the Bank. Forget about the residual debt currently as that can be dealt with under the new insolvency legislation. Have you advised the Bank of your current circumstances? Ideally you will need help in progressing actions as I'm sure further stress is not going to assist in your recovery. Have you any friend's/family who can act as an intermediary with the Bank. Otherwise get a solicitor/accountant or other to act for you. No need to go to the UK, this can all be resolved with appropriate help. Best of luck!!!
 
Javanaise;

as 44 Brendan says; NO need to go to uk.Indeed that is only MORE stress.
I send people for phone advice to Ryan Stewart @ 0858888531 insolvency practitioner.He is good and hard to get @ times. Tell him I sent you and I suggest do take is advice.
Banks are not good @ resolving issues and again as 44 Bren says , you need 3rd party help to sort this.
Good Luck.
ps; think about this. From what you write the Bank are in a worse situation here than you are as they MUST face a loss.So TACKLE the stress and get good advice.
 
Hi Brendan,

Thanks for your response. I haven't approached the banks about this. Could you elaborate on what sort of positive outcome might arise out of staying in Ireland to deal with this? I haven't informed the banks yet, because I'm wary of alerting them to the problem in case I do have to go to the UK. I already mentioned the mental health issues arising out of this in the solicitors letter to the banks and that I was thinking of emigrating. Their response was quite hardnosed.

I should clarify, I would prefer to suffer 12 hard months and be completely debt free as a result of going to the UK than handing the property back to the banks and then having the shortfall follow me around for six years.
Thanks again for your reply. I have friends who could act as intermediaries, yes.
 
Don't get concerned about a "hard-nosed" response. Most of these letters are issued on the basis of purely protecting the Bank's position and should not be be regarded as impediments to doing a deal. Look at response from Gerry C above. I have no knowledge of the advisor he recommends, but a call to him or another advisor can only help you in clarifying options available. UK option should'nt be necessary in your case as all could be resolved far easier than you think!!
 
Javanaise;
Couple more things.

1. If you stay in Ire , any residual debt (haunts) you for Max 6 years , ie should be less.
 
Thanks for all your replies! However, there doesn't seem to be a guarantee that I will be left alone. Six years is a long time. I really would like to move on with my life.
 
Hi guys. A technical question about my mortgage. In times past, if there wasn't enough money in my account for it to be paid, my bank (not the same institution as the lending body) would make the decision to pay the mortgage based on previous history. I can't let this happen this time as I simply do not, and will not, have the money any time soon. I called my bank, and they said that, while they could refuse the DD request from my lender, the lender could request payment of the DD again at any time in the future and that my best bet would be to cancel the direct debit until such time as I could pay the mortgage again. Does anyone have any advice on this? If I'm posting in the wrong forum, apologies. Thanks for your help.
 
javanaise;

Cancel the DD , because if you do not you will be charged referral fees each time.

Also the 6 years IS A MAXIMUM and Uk bankruptcy is still hassle.
Try Ire options first
Wish you well.
 
Javanaise sorry to hear of the stress this has brought you. Good luck in getting better soon. I know you said you wrote the bank a solicitor's letter saying you wished to sell the property, but I wonder will you face difficulties selling the property if it has a leaking outside wall. A prospective buyer would probably get an engineer's report done on the house and would find out about the leaking outside wall. Of course maybe a buyer would be willing to pay for the refurbishment in exchange for a knock-down on the price. Did you get a price for what it would cost to repair the wall?

I suppose you need to decide if you want to put the house on the market and try to sell it yourself or would you prefer to do a voluntary surrender to the bank and let them try to sell it? In any case I agree cancel the direct debit and if you want to do a voluntary surrender ask them to send you out the forms.
 
By the way the 6 year residual is based primarily on ability to pay. i.e. You will be allowed to exclude reasonable living expenses from any repayments, including rental for an alternative property. Realistically this would be an acceptable option for you and means that following a 5/6 year period you will be fully debt free!!
 
Lucuma - Thanks for your works. The leaking walls can be easily repaired - the problem is I don't own the external wall and the builders won't fix it! I think voluntary surrender would be the best option.

Brendan - That's still 6 years which is a long, long time. If, at any stage during those three years I end up with any reasonable sort of income it will be stripped bare. If I go to the UK, that process ends with discharge from bankruptcy 1 year on. I don't have a family and I've no desire to retain the property as my family home...6 years doesn't seem that appealing. Thanks for your input.
 
Hi all,

I've decided to go the UK route. I'm in the process of cancelling my direct debits.

One question, I haven't yet cancelled my mortgage protection/life insurance policy. I wonder if doing so makes it illegal for me to have a mortgage? Basically, what are the ramifications of doing so?

Thanks again to everyone for all their help
 
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