Debt, debt and more debt...enough!

Problem A:
My mortgage is based on an over-valued house purchased at the height of the property bubble, in a “less-than-desirable” location in West Dublin. The house is now worth approximately half of the remaining mortgage loan (approx. 29 years left).

Problem B:
A number of unsecured loans were taken out by myself during the same period of time for the purposes of home improvement. I have missed a couple of payments on one of my loans and believe that this is now outlined on my ICB credit rating.

Problem C:
The career opportunities for me in Ireland were extremely limited and I could not earn enough to pay my debts and care for my family. Therefore, I now commute to the UK for work, and I am paying interest only on the mortgage as well as an agreed reduced loan repayment on the unsecured debt (though these are only short-term agreements).

Question:
I do not want to take the route of bankruptcy in the UK, though I know that this may be an option at this point given my employment & debt situations. Is it possible to re-structure/extend my mortgage beyond 35years, and write-down the unsecured debt? Are there any reputable consultancy services that people could recommend?

I do not blame anyone else for my problems, but we would just like to draw a line under this situation and move on with our lives…

enough

a great number of people are in a similar position and the banks and government are hoping that people will knuckle down and continue pay for over priced property,however the bank did approve the loan and that the house was value for money,that turned out to be a mistake and they have now to accept some responsability. get away if you can,like many developers and builders and former tds government members ,you may not like it but your borrowings are just too high. eamo.

Given your situation, you do need to seriously consider the bankruptcy option. The UK already appears to be your COMI, so you should at least seek professional advice on your options. All indications are, that currently UK Bankruptcy appears to be the cleanest & best solution for those in unstainable debt positions. Good professional advice will help you to make an informed decision.

Is the interest only amount greater than if you rented a house elsewhere in Dublin ? If it's roughly the same you are not much worse off in that regard. Seems more sensible to use the UK bankrupcy option if you can nail down exactly how it will affect you. If it means you don't have enough for reasonable family expenses it may be better to try and weather the storm.

Thank you for your comments. I am very aware of the UK bankrupcy option, and that I have a good case and sufficient cause. However, that option worries me greatly too. For instance, what effects will it have on my good name and/or professional standing? I will be looking for professional advice in the UK shortly.

There are no details here that can make anyone give any type of response, except to ask questions .

e.g.
What is your income ? - a few details on major costs would help.
What will the bank now accept in the interest only plan ?
What will the other creditor now accept albeit temporarily ?

Without such details how can anyone suggest you go bankrupt in U.K. ?

And I can't understand what difference the halving of your house value make to your ability to pay ? Especially as your monthly payments must be much lower now, on interest only, than when you took the loan.

Do you need to go bankrupt in the UK or could you relocate there with your family, rent out the property here and make up the difference in repayments with the higher income from the UK (and savings from not commuting)?

Millieforbes.
Fundamentally, I just cannot bring myself to go down the bankruptcy road for a variety of reasons. I am sure it makes sense on a purely capitalist / fiscal level, but there is far more to the story than that.

I believe that that option would harm my career, in particular my future prospects. I am a professional and eventually, I would expect to get into a senior management position...It has taken a lot of time, resolve and effort to turn my career around since the construction bubble burst, and I now see it as a vehicle to take my family away from this difficult time. Bankruptcy is also something that bothers me on a personal level, and I would have great difficulty in seeing my good name (& that of my family) put on the same level as S.Quinn, S.Fitzpatrick, etc..

Anyway, I have decided that the best option is to negotiate rather than capitulate! The plan is to seek a writedown of the unsecured debt, and to re-structure the rest. In the future when things get better, I would like to sell up at a small loss rather than be stuck with the full brunt of the current negative equity.

I still cannot believe how foolish I was back then, and how irresponsible the banks and central government were too...Seems like only one of the three is suffering now!

Oldnick.
It makes it significantly more difficult to continue working in a foreign country. If I have to be separated from my family then it has to be for a worthwhile purpose. Sending all my money home to pay for a house that is practically worthless is not at all easy. I would much rather spend it on building a future for my partner and children.
This isn't the "can't pay Vs won't pay" arguement. This is: "how can I put my family through this separation if the house is now worthless, and will remain so for the foreseeable future?"
ps. Half my income goes on living expenses & travelling in the UK, the other half goes on debts in Ireland.

Enough, I wasn't very clear in my post, what I meant to ask was whether you would consider moving your family to the UK too and settling there together for a while? I understand your concerns about bankruptcy, especially if you will be working in the UK, I would have the same worries if in your shoes. Wouldn't your overall outgoings be lower (after the initial cost) if you moved the family, let the house for a couple of years and kept paying the mortgage but you would have higher earning power in the UK and slightly more money to pay bills?

If you are paying interest only -and are allowed to do so for a number of years - then , as Elcato points out in post 4, then you may be paying the same anount as the rent for such a property.

Therefore you are not at the moment "sending all your money home to pay for a house that is practically worthless". You are sending home money to pay for the interest only which may be about the same as the rent.
Obviously this doesn't take into account what happens after the interest-only period ends, but if that's a couple of years away it does you give breathing space and hopefully reduce your stress.

To be a bit sneaky (and why shouldn't you be when dealing with the banks) you could even let the house whilst paying interest only and bring the family to U.K. Again,this may give a couple of years during which time you/your family will know if settling in UK is the best thing.

On a slightly encouraging note ,rents are increasing across Dublin and perhaps (though this may change) property prices seem to have stabilised for family homes in Dublin.
It may be worth hanging on to it during the interest-only period.

Finally, the new laws on personal insolvency are coming soon and which will include several measures that mean you do not have to be declared bankrupt.

enough! said:

Bankruptcy is also something that bothers me on a personal level, and I would have great difficulty in seeing my good name (& that of my family) put on the same level as S.Quinn, S.Fitzpatrick, etc..

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That's very noble, but you'd have to be one hell of a bankrupt for anyone to judge you along the likes of those two individuals.

Sometimes people cannot afford to pay and they must go bankrupt. Some can through hard work get through a difficult financial period. You seem to be trying to do this. But ultimately you may fail. So you could end up in a bankruptcy situation anyway. The banks would be quite happy for you to be paying them forever. As you've posted no figures whatsoever it is impossible to help you on what is the best option for you.

Are you in a career which would be affected by bankruptcy?