Sale of house in Neg Equity

J

johnpdolan

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I have finally got the bank to allow me sell house for €100,000 with a mortgage of €165,000 outstanding. My problem now is what to do about the balance. Am i compelled to pay it or can i challenge for a write off even though i know i will never get. My other option is bankruptcy but where would that leave me? I have nothing a present and by nothing i mean nothing. I have 72 euro to my name to last me till next thursday and i have to try and survive on that. The future is very bleak and i have alot of letters looking for money from my failed business that i had to close in february.

Any advise would be great thanks

J
 
Hi John

You won't get a deal before you sell your house.

But if you have only unsecured debt after the house is sold, you can apply for a Debt Settlement Arrangement. If the creditors are clever, and that is a big if, they will not veto it.

But sell the house as it will be much easier to get unsecured debt written off.

If you have a problem in selling the house, then apply for a Personal Insolvency Arrangement and the sale of the house can be part of that.

Brendan
 
Thanks Brendan

The house sale is in the solicitors at the moment and should be completed by end of next week. I have waited to get this done before i make another move because i want rid of house. Now i want to sort my debt

Where can i find out more about Debt Settlement Arrangement and Personal Insolvency Arrangement.

Do you know if bank will have any say in stopping me after house is sold

John
 
The New Personal Insolvency Legislation is not yet introduced. However it should be finalised shortly and a DIA will mean that provided you are insolvent (Owe more than you own), your liability will be limited to what you can afford to pay the Bank plus any other unsecured creditors (after reasonable living expenses) for a 5 year period. Alternatively if you have no other creditors you could do a straight deal with the Bank for a set amount of reduction overa 5 year term. This will cut out the costs of the PIP (circa 5,000).
 
Thanks 44brendan

Does that mean i have another long wait ahead of me or would i just be better heading to uk when i get sale of house through and go for bankruptcy there
 
There shouldn't be any need to file for bankruptcy, unless you have a pile of other debt. Wait until the sale is completed and the Bank paid the net proceeds. Then assess your "reasonable" monthly living requirements and the balance available to pay debt. You'll find further info on this site. Just do a search! Go to the Bank then with your offer and state that if they don't accept you'll take the Personal Insolvency route.
 
johnpdolan said:
Does that mean i have another long wait ahead of me or would i just be better heading to uk when i get sale of house through and go for bankruptcy there
Click to expand...

Well done on getting the bank to agree to the house sale, and well done on getting a sale. You are making progress.

Personally I think the UK is the better option, it's very clean and quick. But it's nearly impossible to compare it to the Irish option as that is not up and running yet. And we've no idea of a time frame on that, we keep hearing soon for the last few years.

I believe your bankk will just write off your debt, you need to stop worrying about the letters from the creditiors, you cannot pay them, so ignore them. You Didn't deliberately set out to end up like this. Dont' let them stress you, it can eat you up and make you incapable of functioning. Sorry to hear about your failed business, I'm sure the experience will stand to you in time. Most of the worlds most successful businessmen have failed at least once. Must have been awful to have had to close. There's loads of posts on here about UK bankruptcy if you want to look into that. Best of luck with whatever you decide.
 
Just a quick update. Some years ago I was on here looking for advise on how to deal with bank regarding mortgage after I lost my job. I got great advise and after 5 years hard work on my behalf not banks, this week I signed an agreement that, after I had found a buyer and sold house for negative equity, the bank having written off the outstanding balance of €79,000. It has been a long road but I kept going through hard times. I was even issued with a court date for repossession even though sale had gone through by then.

If I can do it so can other
 
Well done John.

Any chance you could tell us a bit more about this as it would be a great help to others in the situation?
What advice would you give people?

1) Which lender?
2) When did you actually sell the house?
3) How much was the shortfall?
4) Did you pay anything towards it?
5) What is the paperwork for the the writing off? Did they write you a formal letter saying you no longer owe the money?
6) Do you have other debts or are you now solvent?

Brendan
 
The bank was aib and I sold the house for them in feb of last year. It took me 14 months hard work to sell it cos of all the paper work and then had to get solicitor which bank allowed 3% if sale to pay for this. Then there were all the taxs that had to be cleared then at the end I had to prove it was not a second home. It was very stressful but I did it. Then the bank issued me a episodes soon order even though house was sold and they had €100,000. That was when I decided that I was going to keep at them till they made a decesion. I e mailed every week and met their legal team. Through hard work I gave them no other option but to be rid of me, sort like the character in shawshank reception movie. Finally I recieved the letter of agreement and had it witnessed when I signed. No more money owed to them. I have other small debt but not worried about it.
 
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