At what point will the banks start jailing people?

paddyland

I cannot sell my apartment. If I price it well below my outstanding debt, i.e. negative equity, I might, but I'm an hour from Dublin, and nothing is selling out here at all. If I price it that low, I end up hanging myself with a massive debt I cannot repay. I am unemployed, and look likely to remain so for some time.

I have no income at the moment. It is three months since I applied for Benefit, and they still have not processed my application. I have not made a mortgage payment in five months. I am completely and absolutely destitute.

I understand there is a 12 month moratorium on repossessions. What then? Will there suddenly be quarter of a million jobs for people? At what point do the banks start jailing people for non payment of debts? There are thousands of people who are not going to suddenly sort out their financial situation by the end of the year. Do we all go to jail?

rs

paddyland wrote: »

I understand there is a 12 month moratorium on repossessions. What then? Will there suddenly be quarter of a million jobs for people? At what point do the banks start jailing people for non payment of debts? There are thousands of people who are not going to suddenly sort out their financial situation by the end of the year. Do we all go to jail?

People in jail cannot earn money to pay debts. It does not make sense for the banks to jail people.

1. The banks will repossess properties.
2. Sell them.
3. Subtract what they get from what you owe
4. Stick you for the rest

While you have this debt, it's unlikely you will every be able to borrow money again.

People going to jail seems very unlikely. People having no homes and big debts is much more likely.

quozl

You won't be jailed, you may have your house re-possessed and then end up owing the difference between what the bank sells it for and what you owe.

As far as I know, and I'm not a lawyer, if you've made any efforts to make payments then the courts will no re-posses.

However that may well change if there is a flood of defaulters, things are going to have to be streamlined, and from what I've read about in other crashes, as time goes by the judges get more jaded and rushed and the rate of repossessions granted increases.

Personally I'd be inclined to try and sell it for what you can. Discuss it with your mortgage provider and explain your situation - they may well allow you to sell it without clearing the mortgage and move the debt to an un-secured personal loan.

They may even write some of it off. Though I doubt it.

Anyway, try and deal with it now, and talk to a solicitor! Things will get further out of your control over time, and banks/judges may be less willing to discuss things when flooded with defaulters.

I really hope things work out for you. Best of luck with it.

D3PO

First thing you need to do if you havent done so alreay is pick up the phone and ring your mortgage provider and explain your situation.

i also suggest you ring / contcat MABS for some financial advice on how best to restructure and manage your debt with your lenders.

dont bury your head in the sand waiting for a court order get out and be proactive.

Emmo

Is there any hope of renting the place out and moving in with friends and family

You could ring the bank and perhaps ask them to move to an interest only payment scenario and then renting the apartment out and using that income to pay the bank?

Emmo

SoupyNorman

Take heart in the fact that Judges will almost always favor the owner of the house (technically it's the bank but dont be pedantic!).

The Irish Times usually have a 'repossession' column every other week outlining repossession hearings and in a year of reading the column I only ever seen a handful of orders granted and the orders were granted on arrears of €45k upwards and where the mortgage holder had made no attempts to repay and did not show up in court.

It may be difficult but once you show an effort towards paying something off your mortgage you may be brought to court but not a hope a repossession order will succeed. - Just dont bury your head in the sand!!!!!!

Also, the word on the street is that banks are cherry picking what properties they want to repossess i.e. which properties will be the easiest to sell. So apartments are well down on the list I'd imagine.


Have you inquired about reducing your repayments with your mortgage company?

Jo King

SoupyNorman wrote: »

Take heart in the fact that Judges will almost always favor the owner of the house (technically it's the bank but dont be pedantic!).

The Irish Times usually have a 'repossession' column every other week outlining repossession hearings and in a year of reading the column I only ever seen a handful of orders granted and the orders were granted on arrears of €45k upwards and where the mortgage holder had made no attempts to repay and did not show up in court.

It may be difficult but once you show an effort towards paying something off your mortgage you may be brought to court but not a hope a repossession order will succeed. - Just dont bury your head in the sand!!!!!!

Only a handful of orders are granted every week, the rest are adjourned and most will be granted eventually. The owners turn up and say they will pay x amount off the arrears. They will get an adjournment for a few months. A few months later they haven't paid much if anything back. After a few adjournments the repossession order is granted unless serious progress is being made to deal with the situation. The whole process is in public and the house owner has to go in and have their financial affairs discussed in open court. Legal costs will be incurred on each outing to the court. Most people hand back the keys/don't show in court.
After the repossession the bank can seek an installment order for payment of the outstanding debt. If that order is not complied with then committal to prison is sought.

pwd

I'm no expert on this, but I think you can declare bankruptcy, which I thik would mean all your assets are dissolved and all your debts are written off. I'm sure it fncks up your credit rating pretty severely if you do that, but no worry about prison.

Photojoe

You won't have your house repossesed unfortunately. You will get to live in it for free for a long time. The bank will end up taking a big loss covered by us the taxpayers.
Thank you for taking out a loan you couldn't afford.

jhegarty

Make the effort to pay something, whatever you can afford and jail won't be an issue.

Banks can only go down that line when someone has money, but still doesn't pay them. (eg. you earn €50k , but won't pay the money you owe).

spongeman

Pity the OP is not a developer. Then he could get his loan written off.

Mena

Nobody goes to jail for debt in Ireland. The problem arises when the issue goes to court and you don't show up, judge makes an order you probably cannot pay, since you didn't bother to outline your position to him, at which point you fail to pay, are in contempt of court, and land up in jail.

At that point it's your own fault. If you show up, outline your circumstances and based on those make a realistic offer, the judge will listen, even if it's 5 euro a week or less.

(you and your used in the general sense)

Victor

First, talk tot eh Community Welfare Officer - he can help tide things over until welfare is sorted out.

paddyland wrote: »

At what point will the banks start jailing people?

They will only jail people who are cheating or ignoring the court.

pwd wrote: »

I'm no expert on this, but I think you can declare bankruptcy

No, in Ireland, bankruptcy is something done to you, not something you do.

At what point will the banks start jailing people?

itarumaa

Just hope that banks don't solve this matter as they did in Finland 1990 forwards.

What happened basically was that owner of the house did not have money to pay the debt, then the bank took the house and put it in auction, without any reserve price. Then the house was sold and that money was taken out of the loan (after cost, of course) and the house owner was left with the debt and no house.

What made it really bad was there was no reserve price and the housing market was in really bad shape. So lets say you had 100k debt, the house was sold maybe 20k, and you had 80k left to pay.

And since there is no change for individual to be bankrupted, there are still in Finland some people that have debts from that era and even more people that have everything in wife or relative's name because they cannot own anything. If they own something, then the state starts to collect that one because debt has to be paid back.

In that time Finland also had a bank, lets call it a "bad debt bank", Arsenal I think it was called that took all the debts in control, sold those houses with any means necessary and rest was up to the house owner to pay back.

Photojoe

itarumaa wrote: »

Just hope that banks don't solve this matter as they did in Finland 1990 forwards.

What happened basically was that owner of the house did not have money to pay the debt, then the bank took the house and put it in auction, without any reserve price. Then the house was sold and that money was taken out of the loan (after cost, of course) and the house owner was left with the debt and no house.

What made it really bad was there was no reserve price and the housing market was in really bad shape. So lets say you had 100k debt, the house was sold maybe 20k, and you had 80k left to pay.

And since there is no change for individual to be bankrupted, there are still in Finland some people that have debts from that era and even more people that have everything in wife or relative's name because they cannot own anything. If they own something, then the state starts to collect that one because debt has to be paid back.

In that time Finland also had a bank, lets call it a "bad debt bank", Arsenal I think it was called that took all the debts in control, sold those houses with any means necessary and rest was up to the house owner to pay back.

That is exactly what should happen. Let the people who caused this mess pay for it for future years and not share the pain with the prudent.

dudara

Firstly, it is the judge who will send you to jail, not the banks. All the banks can do is take you to Court.

As a previous poster said, the Irish Times runs a report from the Chancery Court every Tuesday. I remember reading the column in today's paper.

Judge grants more time to buyers falling behind in repayments

PAMELA NEWENHAM

A MORTGAGE holder who owes €52,000 on a family home was being charged legal fees of €18,000, the High Court has heard.

Counsel for the mortgage holder told the weekly chancery summonses hearing that €70,000 was owed on the family home, made up of a debt for €40,000, interest of €12,000 and the remainder in legal fees.

Pleading for more time, she said the defendant had €10,000 with her in court, and there was “very significant equity in the family home” worth in the region of €200,000 to €300,000.

An application for a possession order by the plaintiff was rejected by Mr Justice John MacMenamin, who adjourned the case on the grounds that two bank drafts amounting to €5,000 each had been brought to court.

The judge also said he would be awarding costs at Circuit Court level, in cases that could have been brought to the lower court.

Two orders for possession were granted at yesterday’s hearing, both on consent of the defendant. In one case, the court heard how arrears of €40,000 had accrued as a result of 10 missed payments.

As the property was occupied by tenants, the judge directed a translated letter be sent to them informing them of the court proceedings.

All but two of the 50 applications listed before yesterday’s hearing were adjourned either on consent or to give defendants more time to sell their properties or to come to an agreement with the lending institution.

In one case, involving a Co Galway property on which €300,000 was owed, the judge adjourned the application by Start mortgages to give the defendants one last chance. After hearing repayments were 14 months in arrears, the judge directed a letter be sent to the defendants warning them “the matter will inevitably proceed next week”

In short, the judges are very reluctant to penalise people, as long as they are making an effort to repay their debt.

johnnyskeleton

D3PO wrote: »

First thing you need to do if you havent done so alreay is pick up the phone and ring your mortgage provider and explain your situation.

i also suggest you ring / contcat MABS for some financial advice on how best to restructure and manage your debt with your lenders.

dont bury your head in the sand waiting for a court order get out and be proactive.

There's a lot of good advice on this thread, but this one is perhaps the most important (and often overlooked, tragically).

OP, if you come to them now and speak to them, better yet meet them face to face, and explain your situation, they might be able to make an arrangement. You might be able to agree to a partial write off, or all sorts of things. The bank will deal with you a lot more favourably if you come clean with them from the start, and they know that they can't get blood from a stone. It's not going to be easy, but it is much easier if you deal with the bank rather than if, as D3PO points out, you bury your head in the sand.

paddyland

A lady on the MABS hotline basically told me there was nothing she could do. I cannot get an appointment with their office for three months. Even still, without an income, they can do nothing. Social Welfare have spent three months doing everything they can not to pay me anything. I feel like a criminal.

I am not a speculator. I am not an economist. I am simply an ordinary guy who wanted a home to live in. Since I never trusted the rental sector or 'landlordism,' I felt compelled to hang myself out the window to buy. This government was committed to a fast track economy, whether I agreed with it or not, and whether it was sustainable or not. The choice was simple, jump on the fast moving train, or fall under the tracks. I clung on for dear life. I naively trusted the government not to let something like this happen. My home wasn't an 'investment.' It was simply what it was - a home.

Now I am paying dearly for my naivety and my trust.

Nobody wants to know me. Not the government, who make no mention of ordinary people in their budgets and their pronouncements. Not the Social Welfare. Not the bank. Not other people. Not employers. Not even MABS. Everywhere I turn, everyone I talk to, drives my confidence and my self esteem lower. I feel absolutely crushed and rejected. I face going into the bank, with NOTHING to offer them, except my keys. And even that won't clear the debt.

I am made to feel like a criminal in my own country. That to me is wholly unacceptable. If a mob ever gather outside the gates of Leinster House, I'll be there with my pitchfork.

Because it's either that or go floating down the Grand Canal.

SoupyNorman

paddyland wrote: »

I face going into the bank, with NOTHING to offer them, except my keys. And even that won't clear the debt.

Hey man, thats a pretty stark reality you've described there but you need to go to the bank. It's better they know you have nothing (currently) rather then no payments being made but they are none the wiser.

You come across like a level headed person and your situation will improve when you start getting welfare (does it get backdated to when you applied?).

Also the fact that there is strength in numbers (many many many poeple in a similar situation) as do you think banks want all these unsellable apartments back...

Manners need to be put on banks currently and I'm not saying that I believe homeowners are to bailed out but banks are being so obtuse that it is slowing down any recovery that may be trying to happen.

partyguinness

Jailing the debtors?

Not much point...it increases legal costs of the bank and the debtor sitting in a jail cell isn't going to get them their money any quicker.

If they havent got it they havent got it.

You are not jailed for owing the debt as such, you are jailed for failing to obey a Court Order i.e. paying the monthly installments that the Court would have ordered.

Spending time in jail does not clear the debt as some people think. I have seen people sent to jail several times over the same outstanding debt and it was more because they pissed off the Judge by not making any effort or ignoring Court dates.

D3PO

Photojoe wrote: »

.
Thank you for taking out a loan you couldn't afford.

seriously if you have nothing constructive to say dont say anything at all.

What is everyone to do ? Plan that they will be made redundant. cop on to yourself seriously. Th OP had a job and could afford his payments.

if that was the case nobody would buy on anything more than 3x the annul social welfare payment so house prices would be priced somewhere between 16 - 20k

see how stupid that sounds. right now get a life.

dblennon

Why is it that the govermnent are so interested in keeping people in there homes when they are in this guys situation.

These debts are being w/o currently + NAMA IMO will probably take the property Good Bad Etc at about 40%.

This poor guys is bust, he should be able to hand the keys back end of story.

The builders won't have to pay the difference, the banks are being bailed out & the economy can't even think about green shoots untill the bottom of this is sorted.

It actually makes my blood boil how blatantly obvious it is the government is protecting there own interests and not the voters!!!!!!!!!!!!!!!

Freddie59

dblennon wrote: »

Why is it that the govermnent are so interested in keeping people in there homes when they are in this guys situation.

These debts are being w/o currently + NAMA IMO will probably take the property Good Bad Etc at about 40%.

This poor guys is bust, he should be able to hand the keys back end of story.

The builders won't have to pay the difference, the banks are being bailed out & the economy can't even think about green shoots untill the bottom of this is sorted.

It actually makes my blood boil how blatantly obvious it is the government is protecting there own interests and not the voters!!!!!!!!!!!!!!!

+1 to that. A bunch of tossers.:mad: And I was a long-time FF voter.