Hi OP, Sorry to hear about your "mortgage mess".
Your negative equity in total is c.430K and to be fair you have to be congratulated for managing it so well, so far. Your overall debt burden of 670K is high in relation to your income and somewhat unsustainable. Frankly speaking you will need to have some of that debt written off, one way or another.
When filling out the standard format, as requested by Brendan above, be sure to let us know if both loans are with the same bank or different banks. Also please let us know if your preferred plan is to stay in your existing home or is the new build still something you would want to pursue.
The solution to your problem must start by opening a serious dialogue with your bank(s) You need to find out what solution the bank is proposing and take that as your starting point. Are you already in the MARP process ? If so, has there been some outcome from this. If you want to stay in your existing home and the bank is proposing a solution that will allow you to do this and also let you have a reasonable living standard, then in my view that is the optimum outcome for you.
If the bank is not proposing something acceptable to you, then you have two other main options
1) A solution under the new Insolvency Act
2) Bankruptcy, either in Ireland or abroad.
1) Under the new Personal Insolvency Act, you would be making a proposal to your banks (through an Insolvency Practitioner) to come to an arrangement regarding your debt. The new legislation favors solutions where debtors are able to stay in their homes. The downside is that (in your case) your bank will need to agree to what is being proposed and will have power to veto any proposal that it doesn't like.
In my oppinion the success of this process will depend on the skill and judgment of the Practitioner representing you. If you propose writing off all the negative equity, then the bank is unlikely to consent. If you propose partial write offs,then we can only hope that the banks will be willing to compromise. The new act is not active yet and the approach of the banks remains to be seen.
2) Bankruptcy
If steps one and two fail to yield a solution, then its probably time to consider your bankruptcy options. In bankruptcy your debts are written off and you get a chance to start over. This would be the worst solution for you in that you would lose your home and all your possessions however it would also be the worst solution for the bank as they stand to lose several hundred thousand euros.
So in your shoes that is how I would play it :-
1) Seek a solution through direct negotiation with your bank(s)
2) If you cant get any solution from No.1, apply for a PIA under the new Insolvency act
3) If the bank vetos your proposal in step 2, go for Bankruptcy
We could spend a lot of time analysing your numbers in greater detail but I dont see the point. Your outcome depends largely on what your lenders will agree to. You need to engage with your bank and only then will you find where they really stand.So far the banks have been extremely slow in agreeing to write off any debt. Some commentators are saying that this must change soon and even Enda Kenny has hinted at that today in the Dail. On the other hand Board members of the main banks are on record recently as saying that there will be no write offs. All the interested parties are still jockeying for position. Unfortunately we still have no real idea how it will play out.