Debt Forgiveness

[censuspro]

I'm looking for some general information on debt forgiveness. I understand that some of the non Irish banks are engaging in debt forgiveness on a case by case basis.

Is there any protocol for approaching financial institutions about debt forgiveness i.e. does a person have to be in arrears before they can apply or just struggling to meet their repayments?. Does it effect your credit rating?

 

[Brendan Burgess]

None of the Irish banks is offering debt forgiveness in the sense of writing down a person's mortgage while leaving them in their home.

Where a home is repossessed or voluntarily surrendered, they are on rare occasions agreeing to write off the shortfall. More commonly, they will give a personal unsecured loan for the shortfall.

PTSB are giving a 10% credit for capital repayments on cheap tracker mortgages.

 

[hastalavista]

Debt Forgivness

This gets a run in todays IT

[broken link removed]
extract
["Prof Kelly said any debt forgiveness scheme would have to take account of adverse selection and moral hazard.

Debt forgiveness has been rejected as a solution to the problem by some experts. Financial Regulator Matthew Elderfield said last year there was “no silver bullet solution” for mortgage arrears due to “moral hazard” and we “must be careful that any approach doesn’t provide financial incentives for the arrears problem to get worse”.]

These comments point to the solution perhaps lying in the NE side rather than the arrears side as at least in theory the price paid for the property should be available and the current value will probably be easier to come by.
Looking at arrears as a measure for debt forgiveness is less transparent and is harder to weed out the freeloaders from the genuine cases.

Any process in this area will be abused and open to political interference and stroke management.

After all, if our newly educated students think it okay to alter a passport to get a drink, the prospect of debt forgiveness will spawn a whole new industry in the fraud department.

 

[barsie]

I've heard that some mortgage providers/banks are accepting reduced capital repayments in full satisfaction of tracker mortgage loans (because they are losing so much on tracker mortgages). Is Ulster Bank open to offers? If so, does anyone know what percentage reductions have been negotiated?