Over €400K in negative equity/debt. Worried sick!

T

Trooper

Registered User
Messages
11
Personal and income details
Income self:Sole trader currently 0 income as just started up .
Income history: e.g. "Was MD of company that went into liquidation in Dec 2012, currently setting up new business as job hunting was not very fruitful
Income partner/spouse:pAYE recently got raise from €60k to €65k
Income history:Stable
number of children: None, but just found out wife is pregnant
Amount of Mortgage Interest Supplement received: 0
Home loan
Lender: PTSB
Amount outstanding: €625,000 including arrears of €45,000
Value of home: €255,000
Interest rate: specify whether tracker or SVR or fixed rate: SVR 4.34%
Monthly repayment: €2,844
Amount in arrears: €45,000

Summary of discussions and agreements with the bank:
On interest only since 2010 (I think) was keeping on top of it even with interest rate at 5.2% (fixed) Early last year work went bad and knew we would never be able to keep on top of payments so decided to sell it and see if we could do a deal with the bank for the balance, then go and rent. We got an offer agreed at €255,000 in July 2012 and I met with the bank, they recommended I dont sell it as I will always have to repay the money and I will now need to go renting, they suggested they pay what I can and hopefully things will come around, I asked what he meant by that and his reply was..... "the value of the house may rise again or you might win a few quid" To me, that said it all, so I notified my solicitor that I wanted to sell the house and needed authority from the bank, after 8 months of me chasing my solicitor for an answer they finally came back last month stating PTSB will not agree to sell the house (the interested buyer had long gone now anyway but I didn't inform the bank of this, as if they were to agree I would have put it up for sale again) My solicitors response was that they dont really care, they want the money back. I informed them I havent paid anything in about 8 months and I got the same response from my solicitor "they dont seem to care"


Other loans and creditors - delete those which don't apply to you
Overdraft: BOI €13,500 currently being pursued by banks solicitors
Personal loan: BOI €10,000 currently being pursued by banks solicitors
Credit Card: MBNA €15,500 legal letters sent etc
Family loan: i.e. I borrowed money from my Mother and am repaying her mortgage for this is €32,000 outstanding €500 p/m with 6 years left
Management fees: €4,000

No savings or investments


How important is retaining the family home to you? Not important

Which of the following best describes your situation?
I don't care about keeping the family home.


Any other relevant information

What is your preferred realistic outcome?
As many people on here have said before, I just want to get my life back to some level of normality. My wife has just become pregnant and its scaring the life out of me as to what to do. I have been self employed most of my working life and the main reason of my large debt was remortgaging/borrowing to invest into businesses that have now failed. I am not entitled to any social welfare due to my wife's salary and I am trying start up a business with no money, I am optimistic about the business however there are costs associated with setting up before I get to see any type of wages for myself, I am funding the business with my wifes wages as my credit history will be terrible by now. My ideal solution would be to come to a reasonable long term solution via the personal insolvency agreement as if I decided to go to the UK bankruptcy route that would mean my wife leaving her job which is our only source of income, whatever we do my wife will have to stay in her highly stressful job until baby is born and hopefully my business will have started to earn money by then. All in all not a great situation but Im not here to moan, I took the loans out, if iot had of worked out I would be laughing, it didn't now I have to face the consequences, Im just looking for some advice on options, I have tried calling some of the experts out there however most charge an upfront fee just to talk to them, I can understand why they do that but I just cant afford it, we have cut back on everything to try make ends meet and am driving around in a 18 year old borrowed car that I reckon will explode any day now. Anyway, thanks for any advice
 
No advice from me ( that others would regard as "correct") except to ask - what ,really, are you worrying about ?

Your only worry should be your wife and child's health. Nothing else.

So you owe banks money. And you have none. What do you think they'll do ? Shoot you, throw you in jail ?
They'll do nothing except huff and puff and eventually get a court order to repossess the house. In which case you find a nice little place to rent.
I don't know where you live but almost anywhere would be cheaper than what you are paying in interest.

Other posters will give detailed advice on each step you should take. There's so many other posts on this that they'll be basically repeating them.

Why don't you now write to every lender and tell them that you are flat broke, earning nothing, borrowing from your Mum, depending on your (now pregnant) wife who soon may be earning nothing - and that there is no chance of you paying them ?

Be as hard as possible. Stop worrying - and see what, really, they will do. I'm betting that end of the day it's very little that will make your life worse than at present.
 
Your only worry should be your wife and child's health. Nothing else
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Good advice!

While its easy for us to say this to you that is living with the worry etc, if you have not got any money, the banks cant make you pay what you dont have.

There are others in much better positions than you are - who are avoiding paying what they borrowed back, so this is where the banks will be focusing their attention first.

Best of luck to you!
 
Thanks for the replies guys, it actually helps getting even the slightest bit of perspective. Im just wondering though, would I be better availing of the personal insolvency or bankruptcy. As I said, I am optimistic I can start earning a half decent wage by the end of the year but my fear is that I will be forced to live on a certain amount set out by my creditors. If a set fee is agreed with creditors, how often is this assessed,if your income increases, any amount above that set fee is paid to the creditors. If that is the case, realistically where is the motivation for a self employed person to earn any more than the set fee for the time period in personal insolvency?
Thanks again
 
I would assume any sort of personal bankruptcy/insolvency would not be the best idea if you are starting a business....
 
Like the other posters mentioned you're in so much debt there is really nothing they can do to you.

Question for you on the sole income of 65K. I presume this is gross, how much is it net?

Are you paying 2844 + 500 out of this monthly. Meaning 40K annually? If you are paying this what are you living on and in addition how does this allow you to start a business?

You've asked what is the best option for you under the new insolvency regime, might be an idea to look at the key posts on this. But in relation to them allowing you a certain amount to live on, well that will be what it means. Even today they are discussing what this exactly means, but it will be rent/mortgage, food, utilities, 1 car, no sky, no holidays etc.

How that is an incentive for someone self employed to make more money, well if you can come to a complete written agreement with everybody you owe then it will be you to decide whether you want to make a lot of money or not. To decide if the deal is worth it to you and your family.

BTW - the banker saying the won't agree to the sale sure you might 'win a few quid'. Are you in line for an inheritence?
 
Thanks Bronte, yes the 65k is gross, up to now the nett has been €3,200 p.m (based on €60k) however this month should show the €5k rise plus I transferred my tax credits to my wife so that should increase nett. Out mortgage payment has just come off fixed since February and up until then our repayment (capital and interest) was €3,157, I had been paying interest only (aprox €2,500) since around 2010 but in May last year after entering the MARP process I started paying the 3/4 of interest only, then whatever I could for a couple of months (€700/€800 p/m) until eventually I couldn't pay anything so I havent paid anything in about 6/7 months. I have been paying my Mothers mortgage of €500 p/m and using whatever is left from my wifes wages to start the business, pay household bills, pay back some personal loans etc. I read the article in the Indo today about cost of living and I read on other posts here that acceptable income would be €2,050 for a couple,tbh that seems possible too high. We currently dont have health insurance, or life insurance, house insurance or mortgage protection. I have a borrowed car, and no Sky and no holidays, thats fine but what I want is the opportunity to contribute more to society, build a business and start hiring people again and I think that the 6year personal insolvency (from what I read) will not encourage people to do this EG My wife has a very stressful job however she could go work part time and nett 2,500 per month, I could sit on my This post will be deleted if not edited to remove bad language and I could also do nothing for the next 6 years, its not in our nature and we wont be doing this but do you think it will be possible that an agreement might be reached with my creditors that e.g. pay anything you earn over €2,500 p/m over 6 years and if you pay back e.g. €100,000 before the 6 years you are clear?
Thanks again
 
username123 said:
I would assume any sort of personal bankruptcy/insolvency would not be the best idea if you are starting a business....
Click to expand...

How come? From what Ive read they can only take what you earn after the agreed living expenses, I assume that once Im out of bankruptcy/insolvency I can then continue to earn full wage? Is there another alternative/ Thanks
 
Trooper said:
I have a borrowed car, and no Sky and no holidays, thats fine but what I want is the opportunity to contribute more to society, build a business and start hiring people again and I think that the 6year personal insolvency (from what I read) will not encourage people to do this


but do you think it will be possible that an agreement might be reached with my creditors that e.g. pay anything you earn over €2,500 p/m over 6 years and if you pay back e.g. €100,000 before the 6 years you are clear?
Thanks again
Click to expand...

Interesting to hear from someone who is facing it and living it that what is being proposed you can live with.

In relation to your question. Think about it from the bankers point of view. They need to get back as much as possible from you. For you to do this you want to make more money but keep some 'extra' from that as an incentive. What you are saying is that without an incentive you would feel like not bothering or giving up. So you need to negotiate. And negotiate hard with the bank. You say to them here is what I have but I can earn X and I'm willing to pay you back half of X if you allow me to do Y (pay off the mothers's loan/keep VHI/buy a car). And I'd certainly try and negotiate some kind of end date if possible.

I understand where you are coming from. What I do not know is whether banks will go for certain things. But some people do know. Probably the experts you mentioned earlier that you cannot afford.

Did you think of contacting that businessman George M mentioned on here. He's set up some kind of counselling group I think that aims to help people like you dealing with the stress of business and other debts and trying to start again in business and also negotiation with banks. Sounds like the kind of advice you need. I assume he's free but I do not know.
 
Thanks Bronte, It should be an interesting few months :) Ill keep my progress posted here. I cant seem to find that guy George M you mentioned, could you point me in the right direction. Thanks for the advice
 
I know of a guy called George who can't work out how to have Sky without the bank's knowledge. Google is your friend.
 
demoivre said:
I know of a guy called George who can't work out how to have Sky without the bank's knowledge. Google is your friend.
Click to expand...


I see now you mentioned on the other thread Sky too in relation to this guy, I think that was what you were referring to but I didn't understand. I think now you mean that anyone can have Sky as in you can have it free to air, as I do on the Continent. I'm sure Mr. Mordaunt knows that too but I've a feeling Sky is the least of his problems.

______________________

Trooper we discussed George Mordaunt on this thread. I do not know him but sometimes anything is worth a try..

http://www.askaboutmoney.com/showthread.php?t=177674
 
Trooper, just write to the banks about the credit cards/personal loans (ca. 44.000)and tell them what i suggested. You cannot pay and there is nothing you can do.

Once they realise there's no chance of getting paid they may(will?) lay off. Will take a few months and you'll be approached and checked out.
But the sooner you get the ball rolling by firmly stating that you just can't pay, the better for you.

I've suggested that you do the same re your mortgage but I admit this is a bigger deal and you may wish to study this further.
 
Bronte said:
I see now you mentioned on the other thread Sky too in relation to this guy, I think that was what you were referring to but I didn't understand. I think now you mean that anyone can have Sky as in you can have it free to air, as I do on the Continent. I'm sure Mr. Mordaunt knows that too but I've a feeling Sky is the least of his problems.
Click to expand...

No what I am getting at is that even someone who isn't genetically gifted with great matter should be easily able to get one up on a box ticker in a bailed out bank, particularly if that person is self employed.
 
Hi Trooper,

I think you are dealing with your distressed situation with a very positive attitude and I believe this will ultimately get you through it!

Consider asking for a split mortgage debt for equity stake. In other words you pay your mortgage based on about €300k. I haven't worked out the repayments on what that would be but if you can afford it then that is one option PTSB might give serious consideration. Just ensure they don't charge interest on the parked sum but my understanding is that PTSB won't.

If this fails and you feel you're going to lose your house at some stage down the road then don't pay them any more money. They would have clearly demonstrated at that stage that they aren't willing to offer a sustainable solution so offer the same back! At least that way you get to build a small fund before you lost your house. Ultimately the debt will eventually be written of in the form of a debt writedown (although this may be many years away) or if you decide to do some sort of a PIA with the bank or indeed bankruptcy.

Consider setting up a company for your business and putting the shares in trust or in your son or daughters name so that your creditors don't force you to wind up your new business. This is perfectly legal if done right and then you will have very little to worry about. You are leaving yourself a little bit vulnerable setting up a business as a sole trader.

Good luck in your new adventure, I can only wish you the very best. I've no doubt you will see the world in a totally different light when your new baby arrives and banks will be at the bottom of your priority list.....and so it should be!
 
Hi Trooper, What I see on this is EVERYONE is TELLING you to maximize your energy/ work on your wife and upcoming child. I agree 100% with them.
Your Debt case looks today to be unresolvable , so accept that.
I suggest do income/expenditure and send it to the lenders and ask for THEIR suggestions. Take it from there , think about it ,they are in a BIG hole !!!
 
oldnick said:
No advice from me ( that others would regard as "correct") except to ask - what ,really, are you worrying about ?

Your only worry should be your wife and child's health. Nothing else.

So you owe banks money. And you have none. What do you think they'll do ? Shoot you, throw you in jail ?
They'll do nothing except huff and puff and eventually get a court order to repossess the house. In which case you find a nice little place to rent.
I don't know where you live but almost anywhere would be cheaper than what you are paying in interest.

Other posters will give detailed advice on each step you should take. There's so many other posts on this that they'll be basically repeating them.

Why don't you now write to every lender and tell them that you are flat broke, earning nothing, borrowing from your Mum, depending on your (now pregnant) wife who soon may be earning nothing - and that there is no chance of you paying them ?

Be as hard as possible. Stop worrying - and see what, really, they will do. I'm betting that end of the day it's very little that will make your life worse than at present.
Click to expand...
Dear Old Nick... Don,t be so sure others don,t agree with you. We probably do but phrase our language more {softly} !!
 
Hello folks

I have been a regular reader of AAM for some time now and have just registered as I am in severe financial difficulty and will post a money makeover as soon as I get the hang of the techno part. I have been in serious trouble with for some time now so hope you can help out with advice etc.,
 
[Personal and income details
Income self:45,000
Income history: PAYE
Income partner/spouse:pAYE €38,000
Income history:Stable
number of children: 1 dependent
Amount of Mortgage Interest Supplement received: 0
Home loan
Lender:
Amount outstanding: €220,000 including arrears of €31,000
Value of home: €255,000
Interest rate: specify whether tracker or SVR or fixed rate: tracker 1.9%
Monthly repayment: €1,000
Amount in arrears: €31,000

Investment 1


Other loans and creditors -
Overdraft: BOI €4,000
Personal loan: BOI €5,000
Credit Card: 0
Management fees: €4,500



Savings €7,000 in CU as collatteral


How important is retaining the family home to you?
Very important

Any other relevant information

What is your preferred realistic outcome?

Just want a good nights sleep, have been worrying myself sick for over a year now, am in MARP but still unable to meet all commitments. I don't want to go bankrupt but don;t know if I have any option. I don't care about the investments but would love to keep my home. Bank has been very good to date but its got to a stage that I cannot afford to put food on the table. Any advice would be appreciated. Sorry if I posted this in error, only finding my way around being a user.
 
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