Defaulting on mortgage options

Status
Not open for further replies.
ecstatic said:
If i leave ireland then they cannot get the money sure?

How long before i would be allowed to come back with debt having been forgotten?
Click to expand...

First part - I wouldn't know, it's possible the bank might chase you.

Second part - never? The debt will never be forgotten.
 
The thing is the collateral for the loan is on the property and therefore if the property is not worth it well expanding money supply and inflating property stock which banks do should not be allowed / curtailed.
 
While not defending the OP, it is interesting to note the contrast in reactions to the OP's proposal and the everyday occurance at creditors meetings where directors are getting away with paying a fraction of the value of their business debts.
 
Ecstatic it is my taxpayer euro too, I'd rather you didn't presume to spend it frivolously.

I just don't see the sense of what you are saying at all. Are you in genuine straits that you need to offload the property and can't see any way to pay for the mortgage? Otherwise it just seems silly. The property is only in negative equity if you sell. So why put yourself in that position?

The debt remains and will only grow by your "strategy", the only other possibility is if the debt was forgiven by the bank but honestly - I think that would be wishful thinking ... definitely something I wouldn't be "banking" on. Bankruptcy in Ireland is a permanent state, there is no leaving it. You would be hard-pressed to ever enter another credit agreement in this state.

Your approach appears to be based on financial law in the US rather than in Ireland, the concept of handing back a property, defaulting on the debt is legal in several states. Also the option of declaring bankruptcy is not an irreversible step which permanantly inhibits you and blights your financial flexibility and well-being.

Farmers in 1930's mid-America had rather more cogent and basic reasons for having to take such a drastic move. It wasn't because they had speculated wildly on the price of property two years previously that they were in dire straits. Comparing your situation (or rather I should say our situation as it affects a fair proportion of people in their late twenties and thirties) to theirs is to presume that the reasons for default hold equal weight - they simply don't. If everyone was to do the same then we would deserve to have the IMF come in and babysit us.

(Argentina has quite an "illustrious" history of debt default, perhaps it is more appropriate to your situation, as you say they have in the past defaulted far easier than other countries)
 
ecstatic said:
If i leave ireland then they cannot get the money sure?

How long before i would be allowed to come back with debt having been forgotten?
Click to expand...

They can sell the debt to a debt collection agency abroad who will take e.g. a 10% cut of your debt owed to chase you down and get the money. These debt collection agencies are pretty determined and know every legal trick in the book (and some illegal ones, such as harassment) so they're not easy to escape. If you did want to escape them, the USA or China would be your best bet because as far as I know there isn't much legal reach into those countries from abroad. You'd struggle to get a visa for any country that requires one though as most require you to be in good financial standing in your home country so if you have an outstanding court order against you for non-payment of debts, you could forget getting a visa for e.g. the US.

If you go to the EU, on the other hand, it's easier for a debt collection agency to find you because the laws across the EU are more harmonised. If you did want to default, you'd be wise to get the visa for somewhere relatively impenetrable e.g. Russia or China first and then default from abroad.

I'm not advocating that though: you made your bed, so you should lie in it. If you want to play the bankruptcy game like the big players do then you need to have all your assets offshore to begin with and any properties in your wife's or family's name so they can't trace you etc. There are lots of tricks that professional conmen use but if you want to go on to live the life of a normal, respectable person then they're not really open to you.

Re your other question on bankruptcy: Bankruptcy in Ireland is only discharged after 12 years (AFAIK) and for that entire time, the courts can sequester your earnings and, if applicable, put you in prison for non-payment of debt at any time. If you're a solicitor, civil servant or company director that's the end of your career too. You're probably confusing this with countries like the US, UK, TV-land etc where bankruptcy is relatively painless. In the UK, for example, bankruptcy lasts 1 year although creditors can chase you for bills for longer depending on what was agreed. There are stories of people who went into negative equity in the UK in the early 90s still being chased for the debt into the early 2000s.

The banks should have been more regulated in their lending but what's done is done. You took out a debt and now you have to take responsibility for your situation. Without a nation-wide debt moratorium or overhaul of the bankruptcy laws, it's hard to see what's going to improve in the near future. Tried to find a link for you with a guide to bankruptcy in Ireland but there were no real sites I could find easily - maybe call MABS and see what information they have?
 
The banks are spending millions taking mortgage defaulters to court these days. The primary motive for this is not to recover their money, per court case it likely costs them more to recover than write off. The primary motivation is to keep mortgage holders in line. If they let one defaulter off easy, then it will start a deluge.

The same logic you are applying to your own case could be applied to other mortgages totaling billions of euro. The banks want you to know that they can make you pay. If it takes them 40 years to recover the money then so be it. These banks have been around for hundreds of years and thanks to Mssrs Cowen and Lenihan will likely be around for hundreds more.
 
Complainer said:
While not defending the OP, it is interesting to note the contrast in reactions to the OP's proposal and the everyday occurance at creditors meetings where directors are getting away with paying a fraction of the value of their business debts.
Click to expand...

Presumably their companies are in severe financial difficulty and they're unable to meet their obligations. The OP can well afford to repay their mortgage so your comparison is invalid.
 
Its clear to me that the mortgage is based on the asset and that default should be an option.

How would i go about transferring the mortgage and property into a company so as i could default in a more legally non challenging way.

I see no problem in doing this Argentina didnt have --15% GDP after there crisis in one year.

The reality is that the banks and politicians have taken this show too far and now its time to let it go. Ireland perhaps would be much quicker into recovery with a default scenario.

Whats the difference between joe bloggs defaulting and some large companies defaulting?

Im trying to keep my options open and if the banks as they are doing continue to restrict lending well they have the asset they can keep it.

Restriction of lending is whats forcing prices down moreso than anything else.

These banks have to go if we all default they will go .
 
have you money problems or something after living your high roller life

why would you default on a property unless you were broke.
 
You are totally deluded.

The bank did not make this investment. You did. The bank's business is to lend money and make a profit on that. It is not to take risk alongside you. If you make a profit on a property investment you do not pay a portion of that profit to the bank. Equally, if you make a loss, the bank does not share that loss.

You are contractually obliged to repay the money borrowed to the bank, together with interest. If you fail/refuse to do so the bank will seize the property, sell it for whatever it can get, and sue you for the difference. No court will have sympathy for someone like you, who can pay but couldn't be arsed taking responsibility. The court will find against you and it is very likely that you will also be found liable for the bank's costs. i.e. your total debt is now the difference between the market price and mortgage plus interest arrears plus both sides court costs.

The bank will then use every available debt collection method against you, including but not limited to a judgement mortgage against any other property held by you, attachment order, installment order, and ultimately (assuming new legislation is through) a warrant will be issued for your arrest and you will be jailed.

If you emigrate to any EU country your debt will follow you. I am not sure about methods of enforcement in other countries, but running away from your responsibilities has a tendency to come back to haunt people. It is also morally repugnant, whether you want to hear that or not.
 
ecstatic said:
Its clear to me that the mortgage is based on the asset and that default should be an option..
Click to expand...

Did you buy the property as an investment or a home?

You still haven't answered on whether you have looked at other options that allows you to keep the property e.g. rent rooms, rent out fully, etc

I think you don't have any clue why you bought the property in the first place, it sounds you wanted to make a quick buck.

Also, the mortgage is secured against an asset but you need to be very clear that it is a personal debt and you will not be able to just "default" without consequences.
 
Robin Banks said:
Presumably their companies are in severe financial difficulty and they're unable to meet their obligations. The OP can well afford to repay their mortgage so your comparison is invalid.
Click to expand...
Given that many of the directors of the companies in question seem to have addresses on Ailsbury Rd & Shrewsbury Rd, it doesn't appear that their directors are in severe financial difficulty.
 
The banks don't/didn't inflate the price of your property.

You borrowed using it as a guarantee, it's the amount you borrowed that's the mortgage, not the properety and that won't change regardless, even if the property was completely worthless, you still borrowed the initial sum.

Imagine buying a car using a bank loan and then deciding not to pay because it depreciated, you're floating around in cuckoo land.
 
Way i look at it is why not let them take the hit.

The way the government is why not let em have the loss might get em out of power quicker.

I know of a lot of people who are thinking same way as me.

Its not sore grapes or whatever yes i can afford it but should i bother paying it back if it will take 20 years to recover in price ?

Can someone tells me what will happen / if anyone has defaulted / talked to the bank about defaulting.
 

What will happen if you default? It's simple, the bank will seize the asset(the house), will sell it eventually for whatever they can get for it, and asusming they don't recover the full debit, you will be liable for the remainder.

What happened in other countries in the past, what ever the "moral highground" you seem to think applies in Ireland right now, whatever the view on whether or not the banks are responsible is completely and utterly irrelevant, you will be liable for the remainder. Those are the facts, it may not be the story you want to hear but that is the real world.

It will not cost the bank €100k to take this to court, the Govt has ordered that such cases now get dealt with in the Circuit Court, not the High Court and legisaltion around this will be passed in a few weeks

The consequences for you are simple
  • You'll be liable for the debt
  • Your credit history will be rubbish
  • you'll have difficulty getting another loan/credit card etc in the future
 
many large companies check your credit rating before employing you...
 
ecstatic said:
Way i look at it is why not let them take the hit.
Click to expand...

The bank won't take the hit - you will.

If you default, the bank will, eventually, reposess your house & sell it for whatever they can get. The rest of what you owe them (plus legal bills) & interest will continue to grow until you pay it back. They will hound you for this money for the rest of your life.

The mortgage will remain on the ICB for five years after you have repaid it in full. So, if you don't intend to ever pay back what you owe, you will never be able to get a loan, mortgage, credit card & most likely a bank account in ireland ever again.

ICB isn't used by foreign banks, so that wouldn't be a problem. However, you will have a judgement registered against you & that could prove tricky.

If you plan on heading off to Thailand or somewhere like that, you could probably get away with it - but do you want to live in Thailand for the rest of your life???
 
Hehe let them "take the hit". This is the funniest thread I have read in ages.

Do you have any idea what sort of state our country would be in right now had the government not done what they did to shore up the banking sector? None of us want the bloody IMF in, as that'll be the end of us all!

Anyway, assuming everything still doesn't go belly up, the governemnt stands to make money out of the guarantee schemes (to the tune of several million euros). The only thing which is still a little blurry is NAMA, but that'll be going off-topic too much.

Simply put, if everyone did what you are trying to do (i.e. walk away from their obligation) the country would collapse as all the banks would collapse. There are tens of thousands of people in negative equity (myself included) but so long as I don't need to sell (as I can afford the repayments) negative equity does not exist! The markets will recover, not immediately, but these things come in peaks and troughs, we're just in a pretty big trough at the moment.
 
the government have pumped minimum of 7 billion + into the banks so far thats circa 8% of gdp and backstopping anglo will probably cost the same again!!!

if we all default we would send a serious signal.
 
Status
Not open for further replies.
Menu
Log in
Register