Large debts/Person has left the country.

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dobsdave

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Looking for general information for a friend of mine whose son is currently out of the country.

Basically this person has the following:

A large(25K) personal loan ,a mobile phonebill (1500) and a credit card which he owes 10k.(overlimit by 500)
He has a house which is rented out and so the mortgage is taken care of, which is the only positive.
He hasn't paid any installments on loans etc and has basically ignored the debt since he went away.

He went travelling last August and plans to be away till summer 2009 at least.
I know from his parents that the companies in question have been sending letters (post has been forwarded to them) telling him to pay up/arrears etc.
I am just wondering what lies in the future for him and what action these companies are likely to take.
If a debt collector/other were to call to his house, they would only find his tennants, so what happens after that?

Will there be a 'special' escort waiting at the airport for him on his eventual return?
 
dobsdave said:
He has a house which is rented out and so the mortgage is taken care of, which is the only positive.
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Are all tax issues being taken care of on this? I ask because this...
If a debt collector/other were to call to his house, they would only find his tennants, so what happens after that?
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... makes me wonder if he is claiming this to be his PPR when it's not.

I guess that the creditors could eventually take him to court in which case he would need to be represented or else maybe be in contempt and this can have serious repercussion.

How is he planning to deal with these debts?
Will there be a 'special' escort waiting at the airport for him on his eventual return?
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Unlikely since this is basically a civil issue. But that does not minimise the seriousness of the issues.
 
The bank could make life very difficult for him on his return should they wish once they know that he has left the country and is renting out the house, the possible implications of that include, stamp duty, income tax etc etc.

It is more likely that once they catch up with him on his return and he does not pay, once proceedings are issued, any Judge will give him short shrift and IMO wouldn't think twice about locking him up for a couple of days to teach him a lesson. You’ll never see the most indebted person going to jail once they have made some effort but someone clearly having a laugh gets no sympathy.
 
davidoco said:
any Judge will give him short shrift and IMO wouldn't think twice about locking him up for a couple of days to teach him a lesson.
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This is surely incorrect. He can only be jailed for contempt of court (e.g. not turning up, ignoring a judgement/repayment order etc.) but not just for having debts or to "teach him a lesson"?!
You’ll never see the most indebted person going to jail once they have made some effort but someone clearly having a laugh gets no sympathy.
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Nobody goes to jail for being in debt. They could go to jail for contempt of court though. I presume it's a pretty rare occurrence though?
 
Davidcoco

ClubMan is correct. He will only go to jail if there is a judgement against him and an instalment order which he does not comply with.


But the bigger issue is the guy's credit rating. This will do long term damage to him. He should approach the banks now and try to sort it out.

Brendan
 
And if the property is being rented "under the table", he is claiming that it's his PPR and/or there are outstanding tax issues with this then he also needs to sort these out otherwise he's storing up yet more skeletons in his cupboard that might come back to haunt him.
 
ClubMan said:
This is surely incorrect. He can only be jailed for contempt of court (e.g. not turning up, ignoring a judgement/repayment order etc.) but not just for having debts or to "teach him a lesson"?!
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Obviously I was talking about down the line when I said "once proceedings are issued". Seeing as the guy is away till summer 2009. The bank hear nothing from debtor, issue proceedings to last know address, no show in Court, order made against him, order made for arrest and production in Court, then hello Portlaoise once they get him in front of a Judge.
 
ClubMan said:
Nobody goes to jail for being in debt. They could go to jail for contempt of court though. I presume it's a pretty rare occurrence though?
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In the middle of 2006 a dail question raised the issue and there were 6 people in prison at that time whose main offence was debt related.

They were in front of the Court because of the debt and went down for an issue in relation to the debt. However you look at it if there was no debt they wouldn't have been in prison.
 
But what were they jailed for? I would imagine that it was contempt of court by virtue of ignoring or not adhering to a court imposed repayment schedule or something like that. If they had no debts they would not be in court - correct. But if they were not (presumably) in contempt of court then they would not have been jailed.
 
I think that not complying with an installment order is contempt of court.

Judges do not like jailing people. If the borrower shows up and makes some effort they will not go to jail.

Brendan
 
dobsdave said:
He hasn't paid any installments on loans etc and has basically ignored the debt since he went away.
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The only effort OP's friend is making is ignoring the debt. He really is setting himself up for a fall if the BOI issue proceedings. It's a pity it's not GE or similar subprime who will charge him for every letter and other misc costs associated with chasing him up.
 
Does the guy intend to repay the debt at any stage ? It seems to me that if he has assets in the country he can kiss goodbye to them, is that not true ? The credit card bill can easily double itself in a short space of time given the high interest rates involved.
 
Some mortgages allow for a holiday period of say 3 months (he could say he wants to travel ) and divert the rent to pay his credit card .Then AFTER THAT PERIOD if he tries to switch the mortgage to an investment mortgage(as its let to Tennant's) on interest only and divide up the balance from the rent to pay something off each of his loans.(assuming there is enough excess) and of course hold enough to cover his tax liability on his investment property. it can be done . maybe ;) but from his attitude to his debts i dought it will be done.some people just have to learn the hard way !
 
stir crazy said:
Does the guy intend to repay the debt at any stage ? It seems to me that if he has assets in the country he can kiss goodbye to them, is that not true ? The credit card bill can easily double itself in a short space of time given the high interest rates involved.
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If they go to court, the interest is fixed at 8% by the court. The huge interest rates on CCs are suspended once it becomes a judgement debt.
 
Although the guy may have assets in the Country its not simply a case of saying the debts can be written off against them. Firstly each creditor is going to have to take him to court so it's very important his family make the creditors aware that he is not in the Country - the creditor may be able to get a judgement against him but if they are going for an instalment order then he obviously is not there to provide details of his income etc.. allowing the creditors to believe he is still in the country and simply ignoring court documents will almost certainly result in him being in contempt of court when he fails to pay. Return documentation to sender or write/ ring and advise them and the Court, should it go to court that he is not in the country. Do not sign registered letters for him as its acknowledging receipt. Tell his parents to simply advise all creditors who ring that he has gone abroad and let him deal with it on his return. His creditors may put off action for a while anyway.
 
As an addition to that the Creditors may ask the Courts to put a charge on his property as a way of securing the debt and the court may be willing to do that.
 
dobsdave said:
He has a house which is rented out and so the mortgage is taken care of, which is the only positive.
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Is someone actively overseeing the payments to his mortgage account? What if the tenants get a whiff of what's going on and decide to stop paying rent?
 
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