The rich don't get pursued for their debts like the poor do


Perhaps, unlike you, the bank didn't know back in 1993 that he was going to live until he was 85. For all it knew he could have dropped dead next morning. Shame that thay didn't think of contacting you - you could have advised them from the shallows of your wisdom. (And you'd probably also have advised them to confiscate his State car and kidnap the driver too!)
 
Shirazman said:
Perhaps, unlike you, the bank didn't know back in 1993 that he was going to live until he was 85.
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No, but they could have consulted the CSO life tables which showed life expectancy of 11 for a 67-year-old Irish male (I'm sure Garret did). So a reasonable ability to clear some or all of the residual debt in his lifetime.

Anyway this was a decision made by a private company a long time ago and I have no opinion on its wisdom or otherwise. The point has been made that this kind of offer wouldn't have been made to a non-ex-Taoiseach and I tend to agree.
 
NoRegretsCoyote said:
this kind of offer wouldn't have been made to a non-ex-Taoiseach and I tend to agree.
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I have never heard of any Taoiseach or non-Taoiseach who voluntarily sold their home being pursued for the shortfall.

This conversation arose from a comment that the rich don't pay their debts and the banks don't pursue them. It completely ignores the fact that we have the most debtor-friendly bankruptcy and insolvency regime in the World.

Insolvent people can get a PIA imposed on their bank with the court writing down the debt and reducing the interest rate.

It is just a populist myth that rich people get away without paying their debts while the majority are hounded for the rest of their life.

Brendan
 

I never said the rich don't get pursued for their debts, I said they don't pay their debts.
They go through years and years of court cases, just like this couple. Sometimes the court rules, but then they appeal, or make a repayment schedule, renege, back to court, round and round we go.
But they hardly ever pay up and they never suffer any obvious reduction to their lifestyle.
 
The rich pay their debts because, the lender will go after them and get an order.

There are some formerly rich people who hide some of their money and who game the system.

But the rich pay their debts.

Brendan
 
Probably because they have the ability to start again and get back earning.

Remember the media will never give you the real story and also some will hide the real difficulty.
You also will see one or two stories in the press who will exaggerate wildly and then people make assumptions.

One recent case was a former restauranteur. The media made it out that they still enjoyed a great lifestyle. - The truth was a universe away from the media reports.
 
Maybe, though the most obvious high profile figures, Seanie Fitzpatrick and convicted fraudster, David Drumm, are sitting pretty. Big mansions , multi million euro pensions, wedding at the K Club. The ordinary Joe is given a budget plan, live off 30k a year and the bank takes the rest.
 
NoRegretsCoyote said:
Anyway this was a decision made by a private company a long time ago and I have no opinion on its wisdom or otherwise. The point has been made that this kind of offer wouldn't have been made to a non-ex-Taoiseach and I tend to agree.
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Any idea how much debt MEP and tax-dodger Mick Wallace has been let away with to date? Feel free to round your answer to the nearest million.
 
The point originally made was that rich people are not pursued by their lenders.
The Mick Wallace case does not support this.

They did what they could - they bankrupted him so all his assets were transferred to the Assignee in Bankruptcy.

Now you might think that 1 year is too short a time frame. You might think that bankrupts should give their pension fund to their creditors. You might think that their salary for the next 6 years should be made available to creditors. And these are all valid arguments.

But you can't have one severe law for the formerly rich and one easy law for low earners.

Anyway, the main point is that the banks went after Mick Wallace to the full extent allowed by the law.

Brendan
 
David Drumm doesn't have a big mansion. No idea about his pension obviously.
 
We have a complex legal system in this country so it's very difficult for the banks to go after people, whether they are poor or not. Court possession of the family home results in a recovery of about 20% of the mortgage. The banks may go after poor people, but they can get free accommodation for 10 years or more. It's the same for wealthy people.

What is a bit different is what happens if I have €100m of assets and €200m of debt. I can drag this out through the courts for years and hope that the assets recover in price so that price increases make me solvent again. The banks can take legal action and will eventually probably end up realising about €80m. (They may sell it on for a lot less.)

NAMA or the IBRC or any other intelligent lender will engage with me. I will probably offer the lender a deal. I will agree to a voluntary sell off of my assets and maximise the value to them in exchange for the following:
1) Any shortfall on realisation is written off
2) My family home, which is in my wife's name - is off the table.
3) They leave me with a non-recourse loan of €10m on the Henry Street project which is worth €8m and I will use my skills to develop the site and repay the loan in full. This also leaves me with a job to do and an opportunity to make an income or trading profit in future years.

So I get left with the family home and a project which might well make me money.
The lender realises far more than they would have otherwise realised.
 
This discussion reminds me of all the populist stuff about NAMA being a bail out of the developers.

Some developers took legal action to try to stay out of NAMA or to get out if they were in.
I don't recall any taking legal action to make sure that NAMA took over their loans.

Brendan
 
Brendan Burgess said:
So I get left with the family home and a project which might well make me money.
The lender realises far more than they would have otherwise realised.
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People don't realise this.

Big loans need active management and personal relationships. They are worth more with debtor participation.

It's not the same with someone who just has negative equity.
 
Even with just the family home, the vulture funds understand the benefits of cooperation.

They will often agree a deal for a voluntary sale which includes a write off or write down of the shortfall.

The borrower gets a fresh start and the lender recovers more money.

Apart from AIB, the main banks would not agree this in advance for fear of setting a precedent.

Brendan
 
Yes - he still has his pension... but despite being rich he got the same treatment as a poorer person. He was made bankrupt and has spent time in jail. So he was pursued.
 
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