Is it better to walk away from your house

Kemo_Sabe said:
This fantasy security blanket that some people have (like OP) of ' shure, if the worst comes to the worst, I'll just give the keys back to the bank and they can't touch me' is not correct. Sorry to be the bearer of bad news.
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Well people in the 80's were able to do just that in the UK. A bank is not going to chase someone who has left the jurisdiction, has no assets and no job. Yes it will affect the credit rating but as I understand it even that has a time limit.
Dodo can you clarify why you think your investment property is not linked to your family home in a default situation - other than my solicitor told me so.
 

Not sure about that. Have heard plenty of posts where people are talking about UK banks coming after them/their friends here a decade later for the principal and the interest from the meantime.

I know my neighbour was chased through the Irish courts by a UK bank for a debt from years earlier. He similarly tried to deny responsibility and painted a rant on his gable end about the 'Jewish conspiracy' hounding his family. But they got him in the end and they'll get the OP as well if he tries it.
 
follow on:
now i'm not trying to make anyone feel sorry for him. but i feel there are a lot of people in similar situations.
this colleague from work worried himself sick about the situation he was in. he went out to find help with mabs, citizen advice they couldn't help his debt was to high. because mortgage rates went up from a base 2per cent to 4per cent and the cost of fuel went up this took all his disposable income away from him. i remember this person used to sleep in the car out in the car park some days because he wouldn't have the money for fuel to drive home.
this person is very nice person, very easily taken advantage off, has tendency to be to trusting and believing in what people used to say to him, estate agents and mortgage brokers sold him a package that wasn't suitable for him. and when interest rates went up the stress limits rose on his finance.
 
LDFerguson said:
Rather than handing back the keys, why don't you rent it for less than the market rate in the area? Then move back to England and supplement the mortgage until you get out of negative equity.
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Surely it makes more sense to sell now at a loss and to continue to repay the balance outstanding on the mortgage when he returns to the UK. At least this way there is a cap on the amount he has to repay and he doesn't have to try and manage a rental property while living in another jurisdiction?
 
NL, Unfortunatly the banks have given away too much money in the past ten years, as is quiet evident. That said, everybody is responsible for their own decisions and blaming the banks wont get you anywhere. Although I think that the banks deserve you walking away and throwing the keys back at them, I couldnt condone that type of action and I think that the solution may not be so painful as you think.

You may be surprised at what the banks will accept if they know that there is a high risk of you either walking away, or disappearing. Some money is better than none to them. I would organise with them to sell the house, tell them that you are leaving, and negotiate a deal on the remainder of the bad debt, aiming to halve the bad debt payment. Stretch this payment over a manageable time that you can pay without affecting you too much. Everybody gains more than the alternative. Push this hard with them, as they are more likely to say no at the beginning, but if they understand that there are no a lot of alternatives, you may get something out of it.

My information above is based on a recent situation where I saw a large loan in the process of being disolved from 4 Million to 3 Million by one of the lending instituations. Not a done deal yet, but what happens to high risk cases.

All the best though.
 
Well , you seem to have done a lot of thinking on this and ultimately if you feel your options are better in the UK then moving there seems preferable to struggling with your finances here. Ideally I'm sure you would prefer to meet your obligations to the best extent possible and would give you a clear conscience as you move on in life.
Like it has been said above, Solicitor, MABS and Bank is the best way to try and draw a line under it. The Bank would probably be more flexible if you approach them before you default rather than after. Make sure you put everything in writing and keep copies.
The limits on the mortgage term applies really only to new applicants or much older clients, but coz you are already in the game the bank could stretch this, or at least on the neg equity remaining. The one size fits all mortgage arrangement needs to be rethought in the current climate. Your "new loan agreement" could have a term of 40 years but stipulation of the agreement could be that its reviewable on a yearly basis and renegotiated (hopefully in the banks favour) to suit your station at that stage.
Longer term years reduces the repayments in the medium term - once you get on your feet in the UK you can start to overpay and reduce the debt quicker. Give them a plan because the banks sure as hell don't have one.

Your approach should be one of trying to sort this out but demanding that they deal with this as a priority. Make a complaint to the banks complaints dept if you feel they are not giving you the service you expect and leaving you in limbo. Follow up the complaint with the regulator/ombudsman, put in a call to Joe Duffy, keep the hassle and pressure on and maybe they will consider your proposals and agree to come to some arrangement.

If they won't let you stretch the term, tell them you want one of those "roll up the interest mortgages" that they give to those developer friends of theirs ,just until the recession is over and prices start recovering. (only kidding on this one)

If they don't want to know and don't want to assist you then head off to the UK and and start over. You wont have been the first person in the world that has been in this position.
Good luck and let us know if your bank does assist you in this.
 
The bank will find the O.P. in the U.K. If he as much as registers to vote, he will be found. Does any one genuinely think that the bank will not go looking for over €300,000?
There's a good chance they have his parents address already from his mortgage application. He might have given it as a previous address.
Running away is not the option. Talking to the bank is the correct thing to do.
 
I agree with VOR. Walking away is not the way. You wont even be able to buy a sofa on credit if you do that. Broker a deal with them, as they wont want the hassle of re-posessing, forclosure or to costs of sorting this out... If they know that you are willing, but stuck, they will realise that their own options are restricted.
 
IMO , you have defininte a lot on your plate at the minute and the long commute is more time for thinking every day. But you need another slant on this situation.

Take it step by step.

This is only an opinon, but because of your situation, you should perhaps talk to MABS first and ge the low down from them. It might seem that MABS are for people who have small debts, but I am sure they have trained advisors who will go through the situation with you and help you see a way out. You need another thinking on this before you make any rash decisions which may have long term implications way into the future. You say now that you might never come back to this country, but who knows? nothing is certain.

Definitely, following outside advice be it legal or above, you should talk to your Bank. Keeping them in the loop might seem the worse thing at the moment, but I am sure there are others in similar situations and they would be no strangers to this plight at the minute. Ignoring any debt, does not make it go away..............
 
I agree with Mopsy. Maybe some of our comments are adding to what is on your plate. Good solid advise from the right people will help you through here, and a step by step approach is important. There are many people in this situation at the moment and good advise should be readily available from teh bank.
 
WoW! This is so familiar. My brother in Canada went through University and came out the other side overeducated and jobless (this was 15 years ago). Three months after graduating the student loan was called in. He hadn't a job, was looking and living with my Mum (not on welfare). He was harassed and agonised over the situation and came to the decision to declare himself bankrupt. Thousands of others did the same as jobs were scarce at that time...they didnt care because they were mostly on welfare and couldnt get credit anyway. The banks realised what was happening and it is now illegal to declare bankruptcy (in Canada) on a student loan. He never had any regrets and after 10 years his (bankruptcy) record was clean and he was doing very well.

I am not suggesting that you should do what you are thinking on....but I would say that I doubt that it will be an option for long: this is a global situation and these issues are no doubt being looked at.

If you walk from your job here your mortgage interest protection will be void. I suggest you talk to your bank.

You should also think about the fact that the Euro and Stirling are very close now and the UK minimum wage is much lower then ours. If you go to the UK and dont succeed in getting a good job then you might well be in a situation that is much uglier then this.
 
@ NL1001 : Why don't you go back to your bank manager/mortgage broker and negotiate a few things?
Firstly, €1500 per month interest on a €355k mortgage equates to 5% interest. There's no way you should have to pay that much interest in your position. The average variable rate at the minute is 3.5%. Even AIB have a 2 year fixed rate of 3%. By switching to a variable, you'd save yourself the guts of €500 per month on interest. That's not to mention the your TRS rate.
Secondly, you can get a 10 year Interest Only mortgage on investment properties. Switch to this, and you'll be saving the €500 per month on your capital payment every month (no point in paying off the capital when the value's falling!).

By doing these two things, you'd be saving €1000 per month on the €2000 per month you're currently paying.

Then, if you take in €600 per month in rent after management fees, all of a sudden the house is standing you €400 per month, again exluding whatever TRS you're entitled to.

So surely you'd be able to move back to the UK, live rent free, pay the €400 per month to keep your Irish house ticking over, and save for your deposit over there?

You're in a great position to bargain with the bank. They don't want to take your house, as they don't want the hassle of trying to sell it and chasing you for the difference.
This way, they still make their interest, you keep the house, you move to the UK for a better standard of living, and you can save for a place of your own.

Everyone's a winner!
 
Can you declare bankrupcy here and it not affect your uk credit rating?
 
You can easily declare bankruptcy here if you have 2K in cash or assets lying around. The banks don't like it as they can't use the usual methods of harassment to get money out of the stone er debtor.
 
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