I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
I am getting a large number of calls from Eire citizens who are seeking help in deciding whether or not to go bankrupt. My articles on the possibility of going bankrupt can bee seen on article base and these are being found on internet searches by those in Ireland with huge property debt.
The economic situation in Ireland is pretty grim. I am currently advising individuals with debts in excess of £15 million, although many citizens have debt of much lesser sums.
The main feature that every one has is that they own their own main and family home, but also a small portfolio of buy to let property.
The issue with the by to let situation is that the rental yields that are being generated from the buy to let are not sufficient to cover the sums due on the mortgages each month. I have one client who is now being taken through bankruptcy who was struggling to make up shortfalls on his buy to let mortgages of €1000 per month. He had kept this going for a year before he had used up all his savings and still found that these losses were continuing and that the value of the property he was looking to keep had halved in value.
I am helping him through bankruptcy here in the UK. He has relocated here to England and is in then process of establishing his COMI, which is making England his centre of main interest. He has obtained an NI number, a bank account and is working here in England.
He has no wish to retain any property in Ireland and so he is giving notice to his tenants to quit the rental property. He has advised his bank in writing that he has relocated to England and he will hand the keys to all his property back to the bank. When he goes bankrupt here, any money that is owed to the banks will be written off, irrespective of whether the property has been sold by the bank at that time or not. As and when the banks crystallise their loss on sale they will merely advise the Official Receiver here in the UK of the amount of the shortfall on the mortgage.
It is possible to keep a family home.
It is the bankrupts share in any property which becomes vested in the Official Receiver. If a wife has a half share of the property, and wishes to keep the house, she can ask for her husbands share to be sold or transferred to her. If there is equity she can buy that equity out. If the house is jointly held that would equate to half the equity.
If the property is in negative equity she can arrange to take the house back for just legal fees. It must be born in mind that she will take on the whole mortgage subject to all the negative equity.
Where the house is simply held in the bankrupts name and the wife wants to stay in the property, it might be possible to do a deal with the mortgage provider for them to write off negative equity in return for the wife taking on a new mortgage.
I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
Hi Brendan,
I honestly don't think so, as I asked her a number of times so as to get a clear and concise response from her. Also, I had a friend with me, exactly for that reason, in case I misunderstood what facts I was told. We both understood it and heard it the same way. Anyhow, it was clear as day that she was very dismissive and against the idea for some reason. What she said actually, to clarify was; 'No that would not be possible for you' and I pressed further and said I had heard of many moving to England for this reason, she laughed and added, 'Well, it might be possible but only if you have debt in the UK as well as in Ireland.' I again asked was she 100% sure of this as I was hearing conflicting advice and she said she was sure.
Also, as a point of interest, 6 months previous I visited another FLAC advisor, and this time I was very enthusiastically advised to go bankrupt in Ireland (and again had a friend with me).
Therefore, it appears from my experience that the advice I am getting from them is very conflicted and varied. Tomorrow, I am paying to get the advice of a independent solicitor and it will be interesting to see if it has been so far a case of 'if you pay peanuts... you get monkeys?'
What is the point of killing myself working and commuting for a house I hate and cant sell when maybe in five years or so I will be forced to sell by one of my Judgement orders? It appears I could be thrown out when my mortgage decreases, so maybe in 20 years when mortgage is finally paid off and I am thrown out and have nowhere to live?
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