A larger house means bigger bills for everything. What amount of you income are they allowed to live on, isn’t there limits. Heading into old age just getting that lawn cut is going to be costly. And it looks like they’ll have no private pensions either, I do not believe a word of it that they will be working full tilt well into their seventies.
The McNamara/Lowe case shows that the courts are imposing too lenient PIAs on lenders
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This one on 4.5 acres is 800k, 5 bed, 190m2
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Seems to be less than half the size.
Brendan Burgess
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The valuation was agreed by Tanager and the PIP.
Someone from the area told me that it was reasonable.
But it seems very good value for such a large house.
Brendan
Brendan Burgess
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The sub-heading says it all.
Those who struggled to pay modest debts look on in awe as huge loans written down
Brendan
Brendan Burgess
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I had missed an important point in my earlier analysis.
In any other country in world, they would just go bankrupt and start again from fresh.
But after this deal, his mortgage is effectively being written down to €450k on a house worth €550k.
They are using his inheritance of €100k - not to pay off unsecured creditors, but to reduce the mortgage on his home from €550k to €450k.
And of course, the mortgage will be for 19 years at ECB +1%.
So they are being catapulted from complete insolvency into positive equity.
Where in the World would this happen except Ireland?
Brendan
In any other country in world, they would just go bankrupt and start again from fresh.
But after this deal, his mortgage is effectively being written down to €450k on a house worth €550k.
They are using his inheritance of €100k - not to pay off unsecured creditors, but to reduce the mortgage on his home from €550k to €450k.
And of course, the mortgage will be for 19 years at ECB +1%.
So they are being catapulted from complete insolvency into positive equity.
Where in the World would this happen except Ireland?
Brendan
Sometimes I find this country very hard to understand. I often think that there is just something lacking in modern Irish people/and or Western Europeans in general. Cases like this (+ the forever war in Clontarf) or the Margaret Cash fiasco, although from different ends of the social spectrum seem to be linked by a general sociatal willingness to always be mugs.
Are they allowed to sell the house, then if they gets lucky with the sale and achieves a "good price" can they pay back the mortgage and pocket the difference or do what he wants with it? Or, what's the scenario if anything happened to the couple, can the house be inherited?
Brendan Burgess
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section 103 of the Act says that iff the house is sold within 20 years of the PIA coming into effect , the increase in value from the €550k will be paid to Tanager.
If it's sold after 20 years, it's theirs. I presume if they die, that would be the equivalent of a sale.
Brendan
If it's sold after 20 years, it's theirs. I presume if they die, that would be the equivalent of a sale.
Brendan
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Thanks for that, so they got a good deal it could be said plus they have a house, providing they do certain things in certain ways. I still wouldn't like their future to be honest, they're welcome to it and I actually feel sorry for them in a lot of ways.
Brendan Burgess
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I feel sorry for them too.
But I feel more sorry for the 350,000 people paying the highest mortgage rates in the eurozone as a result of this deal; who would love to pay a mortgage rate of 1% and who never took most of the year off to stand for election; who could never afford to send their kids to private school; who never got a present of €100k instant positive equity.
Brendan
gnf_ireland
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I think this quote sums out my feels also.
They have been pretty lucky in life, all things considered. They had very good careers at a very early age, and not sure where it all went wrong. That said, their future is not exceptionally bright and I would not like to be in their position.
But they, and others, have got very good deals here and like everything - someone has to pay. And that is the likes us us, who pay the balance for them to stay in their 5000 sq foot home !
And don't get me started on Clontarf !!
NoRegretsCoyote
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@gnf_ireland
In both this and the Clontarf case the borrowers cling to the house even though it is much more than they actually need.
I get the impression that once you lose the house, there is no option of another house. This is how insolvency law is set up. So they make whatever case they can to keep the house.
People with debts still have to live somewhere. It would be better (in both the McNamaras and the Clontarf case) if the judge ordered the house to be sold and basically gave them a voucher for another €250k house. This will keep a roof over their heads at the standard that the average enjoys.
In both this and the Clontarf case the borrowers cling to the house even though it is much more than they actually need.
I get the impression that once you lose the house, there is no option of another house. This is how insolvency law is set up. So they make whatever case they can to keep the house.
People with debts still have to live somewhere. It would be better (in both the McNamaras and the Clontarf case) if the judge ordered the house to be sold and basically gave them a voucher for another €250k house. This will keep a roof over their heads at the standard that the average enjoys.
Yes, I fully agree. It was in that context my comment was meant.
Why did revenue get paid the full amount owing. Is that due to the insolvency legislation.
There was a lot of legal argumentation about the status of the creditors. Particularly revenue (owed VAT of a low amount of under 10K). The judge went to great lengths to suggest that Revenue would be counted as a class of creditor who were happy with the arrangement - and the bank argued they shouldn't be counted. Well of course Revenue would approve it, they were getting full payment. This is despite the fact that 97% of creditors voted against the arrangement.
There was a lot of legal argumentation about the status of the creditors. Particularly revenue (owed VAT of a low amount of under 10K). The judge went to great lengths to suggest that Revenue would be counted as a class of creditor who were happy with the arrangement - and the bank argued they shouldn't be counted. Well of course Revenue would approve it, they were getting full payment. This is despite the fact that 97% of creditors voted against the arrangement.
There living expenses are based on the ISE rate for 2 adults and 2 dependant children, plus a second car, college expenses and extra clothing allowance.
How many barristers in Ireland are practising over the age of 70?
How did they calculate the earning of two people who are self employed.
How many barristers in Ireland are practising over the age of 70?
How did they calculate the earning of two people who are self employed.
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Brendan Burgess
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Well whatever sort of practice she has now, she ca, with her husband, afford just €2,000 a month in repayments, so she is clearly not in high demand as a barrister. That is unlikely to improve into her 60s and 70s.
Brendan
gnf_ireland
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Absolutely - this is exactly the issue. If the house is lost, there is no option for another house so they cling onto it as long as they can. I agree an mortgage 'voucher' for the average cost of a 3-bed house in the region (on the assumption they can afford it) and the existing house sold would be more realistic
gnf_ireland
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This is a very valid point. They use the example of a minority who are still at the bar beyond the age of 70. They should have looked at the statistics of the overall profession, and the income of those who remained on, not only after they hit 70, but also before that point.
Self employed people by their nature have very volatile incomes - barristers are no exception, and its known as not being the most reliable of incomes.
Same applies for musicians. Robert Mugabe stayed in power until he was 93, does not mean all political leaders will be able to do so.
You're forgetting that they also have the ISI living expenses amount plus the second car, college and extra clothing allowance. It looked to me like McNamara had been the main earner, maybe Lowe didn't take on many cases and concentrated on the children. Now she presumably could decide to work more, but there really wouldn't be any incentive to do so I think a wouldn't extra income go to the PIP for the creditors. I guess that has a time period and maybe then she would work extra to provide for them later.
gnf_ireland
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as a self employed person she has to get the work. That may be easier said than done
I would question why they were granted the luxury of ISI living expenses + additional? What makes their situation different to others? If the expenses are 'necessary' why are they not included in the ISI living expenses, even with a caveat on when they can be applied