KBC & Shortfall

Hi,

KBC have given consent to sale on my wife's PPR. It solely in her own name and its the only asset that she has. She has a low income and a diagnosed medical condition that's halting her career and income prospects. She lives with me since we married a few years back. She has been giving them whatever rent she receives regularly for the past 3 years.

I put together a proposal months ago where I would assist her with the shortfall. We have filled in Financial statements many times and her prospects have not changed and will not change. Eventually KBC have given consent to sell the property at 160K. We have a buyer at the price.

However if we sell the property I am worried that she will be strapped with the 100K debt and we have no agreement got on the proposal.

Should we go ahead and sell? Is our position weakened by doing this?

Yes - your position will be weakened if you sell without a written, legally binding agreement. Our bank looked for the shortfall after we sold our home - which triggered us petitioning for bankruptcy in the UK. The IMHO (David Hall's firm) may be able to help as it acts as a mediator between KBC, AIB and distressed mortgage holders. He may be able to have it written off or may get KBC to agree to a lump sum payment of a fraction of the shortfall - after all, it's likely that KBC will get nothing if your wife petitions for bankruptcy.

I agree that you need professional advice on this. And I think KBC is covered by the David Hall organisation, for free, look up their website.

If your wife's income is very low, then it's highly unlikely the bank will be able to get anything from her. Yes she will still owe the debt, but they will need to get her to agree to repay it, or else they will have to go get an instalment order.

I pressume she doesn't own the house you life in?

PPR

It is not her PPR anymore. Obviously there is no tax gain, so she will not be liable for CGT, but I think she may be obliged to fill out a return nevertheless, and it's in her interest in any case, because she will have a loss, she can carry it forward against any future gains.

I put together a proposal months ago where I would assist her with the shortfall.

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You have no legal liability for this. KBC won't expect it. If there is a shortfall of €100,000 and she has no income or assets, then the most you should offer for a full and final settlement is €5,000.

If they don't accept it, go for a short-term PIA where the shortfall is wiped out after 3 months.

As the others have suggested, go to the IMHO on this.

Brendan

Thank you all for your responses.

If we went the short-term PIA route, is this bankruptcy?

I'll contact IMHO today for more info.

No, a PIA is not bankruptcy.

Check out the Key Posts for more information.

If KBC agreed to the PIA, and a term of 3 months, then your wife would be debt-free in three months.