New 2012 bankruptcy legislation

andrewdeerpark

In the papers today:
http://www.independent.ie/business/irish/ministers-sign-off-on-debt-bankruptcy-package-2997228.html

Wondering what the new bankruptcy bill will bring next week. All the signs are of government fudge. I believe we need two bankruptcy categories for people in debt trouble:
1. For individuals who have unsecured and secured personal debt of say less than 1 million that only own their own home and do not have a bunch of hidden investment / commercial property. The ordinary people trapped in negative equity through the property exuberance of the bubble let then hand back the keys and be clear in one year of all debts. That will bring the banks to the negotiation table and give them a writeoff; which the banks have been paid for by taxpayers money anyway.

2. All the investors / businessmen that got it wrong nail ‘em to the cross, and take their assets (those stupid and greedy enough to sign a personal guarantee: their fault) reducing their bankruptcy to 6 years, leave them live in the smallest property in their portfolio . They gambled and lost it’s the market economy for the big boys, and I have no sympathy.

Couples / individuals in negative equity need help, nothing for the speculator.

Outlaw personal guarantees going forward and all future loans / mortgages have to be non recourse.

Not looking to good though…

Chucky the tree

andrewdeerpark wrote: »

In the papers today:
http://www.independent.ie/business/irish/ministers-sign-off-on-debt-bankruptcy-package-2997228.html

Wondering what the new bankruptcy bill will bring next week. All the signs are of government fudge. I believe we need two bankruptcy categories for people in debt trouble:
1. For individuals who have unsecured and secured personal debt of say less than 1 million that only own their own home and do not have a bunch of hidden investment / commercial property. The ordinary people trapped in negative equity through the property exuberance of the bubble let then hand back the keys and be clear in one year of all debts. That will bring the banks to the negotiation table and give them a writeoff; which the banks have been paid for by taxpayers money anyway.

2. All the investors / businessmen that got it wrong nail ‘em to the cross, and take their assets (those stupid and greedy enough to sign a personal guarantee: their fault) reducing their bankruptcy to 6 years, leave them live in the smallest property in their portfolio . They gambled and lost it’s the market economy for the big boys, and I have no sympathy.

Couples / individuals in negative equity need help, nothing for the speculator.

Outlaw personal guarantees going forward and all future loans / mortgages have to be non recourse.

Not looking to good though…

I dont want people be given a write off. I'm sure lots of other taxpayers don't want to pay for other peoples mortgages and failed attempts at "getting on the property ladder".

andrewdeerpark

Chucky the tree
I was fully in your camp for a while however I do believe in helping exceptional cases where people were caught in the frenzy and bought at the pear their family home and its their single investment.

Absolutely no bailout or write-off for any other category, individual or company.

Same way people who invested well and have money deserve the fruits of their smart investing. The Market economy.

The new bill will tell at lot where the government is going ... I expect a fudge that will help no one but the elite. Hope I'm wrong.

Scofflaw

andrewdeerpark wrote: »

Chucky the tree
I was fully in your camp for a while however I do believe in helping exceptional cases where people were caught in the frenzy and bought at the pear their family home and its their single investment.

Absolutely no bailout or write-off for any other category, individual or company.

Same way people who invested well and have money deserve the fruits of their smart investing. The Market economy.

The new bill will tell at lot where the government is going ... I expect a fudge that will help no one but the elite. Hope I'm wrong.

If you bought a family home, surely it's a family home? Isn't the idea that you stay there? Because if not, then it's part of "trading up" and "the property ladder" investment cycle, surely, which kind of blows the moral angle of "family home" away.

cordially,
Scofflaw

andrewdeerpark

Scofflaw
Your point accepted.

However in these days the idea of spending the rest of your life in the one residence is unlikely, plainly because a job for life is not the norm and a vibrant economy needs a flexible labour market that can relocate when moving jobs.

There are a sizable number of people who bought 1 property at the peak of the market and are now trapped in it through negative equity, this is also freezing the whole property market as the location swap selling or trading up (selling your own house and buying another) is non existent.

Plus you have individuals and couples in massive default that have lost their jobs that cannot pay their mortgage that own just the one “family home”.

I believe these are exceptional cases that need state backed assistance through reform of the bankruptcy laws, that will force the banks into a negotiating position involving some debt write down taken on a case by case basis. The banks have been paid for this already.

Only these very specific cases should be given help.

However a general bankruptcy law that helps the greedy individuals who live in palatial mansions and have a few investment properties still hidden away from the banks that signed personal guarantees, while still owing millions deserve nothing. They gambled and lost.

View

andrewdeerpark wrote: »

Chucky the tree
I was fully in your camp for a while however I do believe in helping exceptional cases where people were caught in the frenzy and bought at the pear their family home and its their single investment.

Absolutely no bailout or write-off for any other category, individual or company.

So, if you bought a family home on Shrewsbury or Ailesbury Road at the height of the boom, we should help you? But not if you tried to start a small export-orientated company in Leitrim at around the same time?

A case of rewarding someone for their property mania and penalising someone else for their entrepreneurial spirit, perhaps?

murphaph

andrewdeerpark wrote: »

However in these days the idea of spending the rest of your life in the one residence is unlikely, plainly because a job for life is not the norm and a vibrant economy needs a flexible labour market that can relocate when moving jobs.

What we really need is decent public transport networks to be built in our cities so people can move jobs without having to move house. This coupled with generally much more investment in cities (really just Dublin, Cork, Limerick, Galway and Waterford) will result in a more sustainable, flexible labour market.

My company in Berlin is relocating across town next month (nice new offices with all mod cons, lovely) and I won't have to move flat, just take the train the other way in the mornings. Same commute time.

You should be able to stay in one house if the city in question has the required critical mass to provide alternative employment and has adequate public transport to get you anywhere you need to go in a reasonable amount of time.

oscarBravo

andrewdeerpark wrote: »

All the investors / businessmen that got it wrong nail ‘em to the cross, and take their assets (those stupid and greedy enough to sign a personal guarantee: their fault)...

Clearly you haven't tried to borrow money for a small business in the last few years. Even when leasing a van, I was never asked for any financial statements or other information about my limited company; simply asked for a personal guarantee. If I signed the guarantee, I got the van. If I didn't sign, no van.

I guess needing a van makes me stupid and greedy.

Scofflaw

oscarBravo wrote: »

Clearly you haven't tried to borrow money for a small business in the last few years. Even when leasing a van, I was never asked for any financial statements or other information about my limited company; simply asked for a personal guarantee. If I signed the guarantee, I got the van. If I didn't sign, no van.

I guess needing a van makes me stupid and greedy.

Not even the last few years - back as far as 1996.

cordially,
Scofflaw

Cuddlesworth

I don't see the difference between 1 and 2. Beside the obvious personnel interest by the OP.

Scofflaw

Main provisions of the Personal Insolvency Bill


The Scheme of the Bill provides for:

Insolvency Service
The Bill (in Part 2) provides for the establishment of an Insolvency Service.

Debt Relief Certificates
The Bill (in Part 3) provides, subject to certain conditions, for a Debt Relief Certificate of forgiveness for persons with no assets and no income that are unable to meet qualifying debts totalling not more than €20,000. The purpose is to create an efficient non-judicial means of allowing persons to resolve unmanageable unsecured debt problems. (Similar systems operate in the UK, Northern Ireland and Australia).

With the assistance of an approved intermediary the debtor may apply to the Insolvency Service to certify that the qualifying debts be frozen for one year following which if, the person still cannot pay, the Service will certify that the debt is written off.

General conditions for a DRC

debtors would have qualifying debts of €20,000 or less;
debtors will have a net monthly disposable income of €60 or less after provision for “reasonable” living expenses;
debtors would hold assets (separately or jointly) to the value of €400 or less (one vehicle up to value of €1,200 would be exempt from the asset test);
debts qualifying for inclusion in a DRC are unsecured debts: e.g. credit card, personal loan, catalogue payments, etc;
debts that will not qualify for inclusion in a DRC include: secured debt, court fines, and family maintenance payments.

Where a DRC has been granted by the Insolvency Service

it will be formally registered;
a further DRC cannot be applied for before 6 years has elapsed;
a DRC may not be availed of more than twice;
there is a restriction on the debtor from applying from further credit.

Debt Settlement Arrangements
The Bill (in Part 4) provides for a system of Debt Settlement Arrangements (DSA) between a debtor and two or more creditors to repay an amount of unsecured (consumer type) debt over a set period. The DSA would assist persons who have an income and assets and debts that exceed the threshold (€20,000) for a Debt Relief Certificate. With the required assistance of a personal insolvency trustee, the debtor may apply to the Insolvency Service for a Protective Certificate in respect of preparation of a DSA. If granted, the Certificate would provide for a standstill period during which creditors may not take action against the debtor. The trustee would then put forward a DSA to creditors for agreement. If approved, the Insolvency Service would provide formal registration of the DSA. At the satisfactory conclusion of the DSA all debts covered by it would be discharged. The Insolvency Service has no role in the negotiation and agreement of a DSA. (Similar systems operate in the UK, Northern Ireland and Australia).

General conditions for application for a DSA

the debtor must normally be resident in the State or have a close connection.
only one application for a DSA is permitted in a ten year period.
a Protective Certificate, if granted, will provide a standstill period of 30 working days to allow for a creditors meeting to consider the DSA.
a DSA will normally runs for 5 years.
the DSA requires the approval of 65% in value of qualifying creditors.
a DSA if approved, it is binding on all creditors.

When a DSA has been agreed with creditors

the DSA will come into effect on registration by the Insolvency Service.
the DSA may be varied or terminated.
there may be an application for adjudication in bankruptcy on ending, termination or failure of the DSA.
there are grounds for challenge by creditors to a DSA and a role for the courts on application to have a DSA annulled.

Personal Insolvency Arrangements
The Bill (in Part 5) provides for a system of Personal Insolvency Arrangements (PIA) between a debtor and one or more creditors to repay an amount of both secured and unsecured debt over a set period.

General conditions for application for a PIA

A debtor will only be able enter into a PIA once in his lifetime
A debtor may only propose a PIA if he or she is cash flow insolvent (i.e. unable to pay their debts in full as they fall due) and it is unforeseeable that over the course of a period of time the debtor will become solvent
A debtor may only propose a PIA if a DSA would not be a viable alternative to restore the debtor to solvency over a five year period
It will deal with debts between €20,001 and up to a ceiling of €3m
A Personal Insolvency Trustee, operating in a manner that is fair to all parties and having considered the full financial circumstances and advised the debtor, will make the PIA proposal to creditors and if accepted by creditors will then administer the PIA for its duration
A PIA will normally run for 6 years


A PIA must be supported by at least [65%] of creditors and at least [75%] of secured creditors and [55%] of unsecured creditors in terms of value

When a PIA has been agreed with creditors

· To the extent that they are not provided for in the PIA, all other debt obligations will remain
· Creditor objections to a PIA may be taken to the Circuit Court on stated grounds
· A PIA may be varied or terminated

Bankruptcy
The Bill (in Part 6) provides for a number of amendments to the Bankruptcy Act 1988 to provide for a more enlightened, less punitive and costly approach to bankruptcy. These amendments will continue the reform of bankruptcy law begun in the Civil Law (Miscellaneous Provisions) Act 2011.

The main elements of the bankruptcy reforms include the following:

The introduction of a minimum debt amount of €20,001 in respect of a creditor petition for bankruptcy;
The automatic discharge period from bankruptcy (subject to certain conditions) is reduced from the current 12 years to 3 years after the date of adjudication*;
The discharge from bankruptcy could be delayed by the court, up to a maximum of 8 years, for non-compliance, fraudulent or dishonest behaviour by the bankrupt during the process;
Full disclosure and realisation of all the bankrupt’s assets and interests would be required for the benefit of creditors, etc;
Provision for a court to make a payment order requiring the discharged bankrupt to make certain payments in favour of creditors, allowing for reasonable living expenses, for a period of up to five years
Extended timeframes in regard to possible fraudulent transfers or settlements of assets by the applicant for bankruptcy.


*With regard to the reduced period for automatic discharge from bankruptcy, in addition to any existing technical and other conditions contained in the 1988 Bankruptcy Act, the following new provisions contained in the Scheme of the Bill would also apply:

- in new section 85(4) (Automatic discharge from bankruptcy) that the bankrupt shall after discharge from bankruptcy have a duty to cooperate with the Official Assignee in the realisation and distribution of such of his or her property as is vested in the Official Assignee.

- in new section 85A (Objection to automatic discharge from bankruptcy) that the Official Assignee or a personal insolvency trustee shall have an explicit power to object to the discharge of a person from bankruptcy. The primary grounds for such objection are evidence as to the bankrupt’s lack of cooperation, dishonesty or other wrongful conduct. The court, if satisfied, as to the evidence may suspend the discharge pending further investigation or extend the period before discharge of the bankrupt up to a maximum of 8 years.

(It should be noted that there are no prohibitions contained in the Bankruptcy Act 1988 with regard to restrictions on the nature of employment or profession of a person adjudicated bankrupt. Such prohibitions, where they exist, are contained in sectoral legislation, e.g. in the Electoral Acts in regard to membership of Dáil Eireann or in contracts of employment, e.g. in the legal profession).

cordially,
Scofflaw

andrewdeerpark

oscarBravo wrote: »

Clearly you haven't tried to borrow money for a small business in the last few years. Even when leasing a van, I was never asked for any financial statements or other information about my limited company; simply asked for a personal guarantee. If I signed the guarantee, I got the van. If I didn't sign, no van.

I guess needing a van makes me stupid and greedy.

Seems a bit drastic requiring a personal guarantee that places your "family home" (assuming you have one of course) on the line should you default on a VAN loan. Would have to see the text of that to believe it.

Anyway, as I outlined earlier personal guarantees should be outlawed; all loans being non-recourse. Problem solved. No mention of that in the bankrupcy legislation so little signs of us learning from the past!

andrewdeerpark

View wrote: »

So, if you bought a family home on Shrewsbury or Ailesbury Road at the height of the boom, we should help you? But not if you tried to start a small export-orientated company in Leitrim at around the same time?

A case of rewarding someone for their property mania and penalising someone else for their entrepreneurial spirit, perhaps?

I would like an example of someone who owns a property in such estates that have no other property investments. Most of this crew were the definition of celtic tiger excessive property investment.

andrewdeerpark

murphaph wrote: »

What we really need is decent public transport networks to be built in our cities so people can move jobs without having to move house. This coupled with generally much more investment in cities (really just Dublin, Cork, Limerick, Galway and Waterford) will result in a more sustainable, flexible labour market.

My company in Berlin is relocating across town next month (nice new offices with all mod cons, lovely) and I won't have to move flat, just take the train the other way in the mornings. Same commute time.

You should be able to stay in one house if the city in question has the required critical mass to provide alternative employment and has adequate public transport to get you anywhere you need to go in a reasonable amount of time.

To be fair the lasting good legacy of the celtic tiger is the improved infrastructure: witness the excellent motorway network, the luas and western rail link between Limerick - Galway as a few examples.

Because are a sparsely populated island the option must be available to relocate with relative ease if we have any chance of progressing economically; this is currently not the case with the frozen property market.

oscarBravo

andrewdeerpark wrote: »

Seems a bit drastic requiring a personal guarantee that places your "family home" (assuming you have one of course) on the line should you default on a VAN loan. Would have to see the text of that to believe it.

As I said: you clearly haven't been running a small business in Ireland. Lease a van? No problem; personal guarantee please. Need an overdraft? Sure, all we need is a personal guarantee. Increase the credit limit on your company credit card from €1200 a month? You guessed it...

andrewdeerpark

More on the Independent and thanks to Scofflaw for his excellent paste:

http://www.independent.ie/business/personal-finance/latest-news/homeowners-can-write-down-mortgage-debt-in-new-bill-but-strict-conditions-3000281.html

On first reading we can skip the Debt Relief Certificates section as basically this is allowing credit card, small loans to credit unions debt write off. My only comment on this aspect is this will further undermine the credit unions as this is their type of loan.

The meat is the Debt Settlement Arrangements (DSA) and Personal Insolvency Arrangements (PIA) provisions.

DSA sounds like a UK copy and paste job, again for unsecured debt greater than 20K. A deal is done, debt written off and agreed repayments of the balance within the period set (usually 5), if the repayments not met then bankrupcy.

Is The Insolvency Service a new quango? Though Enda was abolishing those, oh well another election broken promise.

The PIA seems to me similar to the DSA except its on-secured debt between 20,001 and 3million. Slighlty varied terms however again its about getting a debt writedown, an amount agreed to be paid over 6 years and failure resulting in bankruptcy.

Is a Personal Insolvency Trustee someone like a panel of accountants from the creditors like Ernst and Young / KPMG auditors (those upstanding fellows who monitor the lotto, looked after the books in Anglo Irish Bank, etc)?

Fnally the bankruptcy which all the high rollers will be queuing up to join after they have disposed and hidden a fair chunk of assets in the childern, wife's name and moved their liquid cash off shore. Can see this being a hit...

More detail is needed on this provision, plus what elements are deleted from the old bankruptcy legislation etc.

andrewdeerpark

oscarBravo wrote: »

As I said: you clearly haven't been running a small business in Ireland. Lease a van? No problem; personal guarantee please. Need an overdraft? Sure, all we need is a personal guarantee. Increase the credit limit on your company credit card from €1200 a month? You guessed it...

Anglo Irish pioneered the personal guarantee idea. I know of plenty business people who never signed a personal guarantee on small loans. Maybe that's changed now.

As I said earlier all loans going forward should be non-recourse. No mention of that in the bankrupcy legislation.

Personal guarantees are a lazy way out for the bank.

murphaph

andrewdeerpark wrote: »

To be fair the lasting good legacy of the celtic tiger is the improved infrastructure: witness the excellent motorway network, the luas and western rail link between Limerick - Galway as a few examples.

Because are a sparsely populated island the option must be available to relocate with relative ease if we have any chance of progressing economically; this is currently not the case with the frozen property market.

Motorways are fine and well but no use for commuting (they have to end somewhere and where they do you'll find tailbacks if they are commuter motorways) .Public transport was paid no more than lip service during the boom. The Luas, whilst effective in part, serves just a small part of Dublin city (and doesn't serve the other cities at all). Have you ever used a proper public transport network? The disjointed mess that is Irish public transport is a joke.

The reopening of the Ennis-Athenry section of the Western Railway Corridor was 100% purely political and has delivered very few additional passengers, meanwhile Galway City still doesn't even have commuter rail services!

the world doesn't revolve around property. If we sorted out public transport, we'd be sorting out a heck of a lot of other issues at the same time. Do people in ireland not value their time at all? I commute for 50 mins total (door to desk) a day and my job is across town (Berlin is a big city). I value the hundreds of hours a year I save not stuck behind the wheel in a traffic jam on the M50.

Tombo2000

andrewdeerpark wrote: »

To be fair the lasting good legacy of the celtic tiger is the improved infrastructure: witness the excellent motorway network, the luas and western rail link between Limerick - Galway as a few examples.

Because are a sparsely populated island the option must be available to relocate with relative ease if we have any chance of progressing economically; this is currently not the case with the frozen property market.

Cant believe you mentioned the Western Railway as an example here.....

We have the mother of all economic crashes that is costing the tax payer about what, eur150bn.....but on the bright side we have a railway that carries 12 pensioners on a day out from Galway to Limerick 6 times a day....

Please try harder.

skafish

Surely there must be options other than "debt forgivness" for people in negative equity?
I bought my house in 2007, now worth aprox 50% of what I paid, however I dont expect anybody ekse to pay my morgage.
Yes, I could have saved myself a fortune by waiting, but at the time I acted for the best.
What about extended morgages? In places like Japan, 50 year morgages are the norm, and 99 years ore common.
Why should I as a tax payer, pay my neighbours morgage whil I am just about able to keep up with my own??

Tombo2000

skafish wrote: »

Surely there must be options other than "debt forgivness" for people in negative equity?
I bought my house in 2007, now worth aprox 50% of what I paid, however I dont expect anybody ekse to pay my morgage.
Yes, I could have saved myself a fortune by waiting, but at the time I acted for the best.
What about extended morgages? In places like Japan, 50 year morgages are the norm, and 99 years ore common.
Why should I as a tax payer, pay my neighbours morgage whil I am just about able to keep up with my own??

its an absolute outrage.

I bought my place in 2005. I was on very good money at the time, a six figure salary.

I paid at the upper limit of what I was comfortable paying, that is to say my mortgage payments initially were about one fifth of my monthly wage.

I remember being absolutely baffled going to house viewings, where maybe 60 or 70 people would show up. I knew I was on a very good salary, I couldnt figure out how these people could afford it.

Now I find out that they couldnt afford it, and are to be bailed out.

The same people who recklessly pushed up prices by buying houses they couldnt afford.

My own house has dropped easily 50% (€150k) in value, if I'm lucky.

My income has dropped 40% in the same time, so that my mortgage payment is closer to 1/3 of my salary......I can still afford it, but only just.

I lost my job last year; and am now finding out that I would have been better off not finding another job and ceasing my mortgage payments, rather than finding a job and continuing them.

It is so frustrating........its the biggest kick in the teeth since the whole thing began.

Fine Gael trying to out do Fianna Fail in giving two fingers to honest people who pay their own way.

Tombo2000

by the way, is this the only thread on the Personal Insolvency Arranegment on boards.......do people have their heads that much in the sand>?

andrewdeerpark

Tombo2000
No going to fight you on that one (Western Railway) agree it’s currently a bit of a white elephant as a result of the new excellent road between Limerick and Galway. Rail and small regional airports are all suffering because of the excellent new motorway infrastructure now in place. This is a bit off topic.

---

Back to bankruptcy and debt forgiveness I am in 100% agreement with several posters here that the whole idea is alien to the market economy, you make your choices and live by those decision for better or worse; anyone who invested in property and got out with a pile of cash good luck to them while those who invested poorly deserve no sympathy BUT?

As one commentator has said Capitalism without bankruptcy is like religion without sin

What we are discussing here is managing this bankruptcy.

Make it to easy: mass default the system collapses; communism prevails.

Make it to difficult or near impossible: no risk taking, frozen markets, reduced consumption and recession leading to upheaval.

The government must proceed with caution and I understand that, however there are 2 simple things they need to do right now outside of bankruptcy to ensure we are not back in this situation again when the upturn and boom bust cycle returns many years from now: ban personal guarantees and make ALL LOANS AND MORTGAGES non-recourse.

The current proposed legislation seems overly complex, a feast of fees for the legal and accounting profession and will result in most high rollers (who got us in this mess) taking the new bankruptcy lite option after cutely disposing of this assets to their immediately family members.

Plus a new bloody quango that will take over a year to establish: The Insolvency Service.

The banks have already been paid the cash in expectance of mass default and bankruptcy its just now we need to manage it and target those in most need, individuals who bought and own ONE property at the peak of the boom and are in deep trouble. This legislation does nothing specific to help then just makes it easier for everybody else.

I can understand the anger at the whole idea of debt write-off, as I myself did not engage in the excess of mass spending on properties using banks money during the boom. During those days I actually felt like a fool; out grafting 9-5 every day while friends of mine were flipping houses making monopoly money moving from one deal to the next and rubbing my nose in it with flash cars, palatial mansions and 4 foreign holidays a year. However almost all got caught on the last investment wave and the lazy personal guarantees they signed, thinking the banks grim reaper would never come looking for the money, and as we know, come looking they did; so absolutely no bailout / writeoff for these individuals. Unfortunately this legislation is giving them a bailout with our taxes.

CamperMan

andrewdeerpark wrote: »

Chucky the tree
I was fully in your camp for a while however I do believe in helping exceptional cases where people were caught in the frenzy and bought at the pear their family home and its their single investment.

that's is their problem, they signed on the dotted line to get the finance, they should pay every single cent back..

the problem was, these guys genuinely thought they were buying a property that would keep going up and up and up in value so one day they would be very rich and be able to sell this property for more than they paid.. it didn't work and now they have lost a fortune..

It's like buying stocks and shares, it's a gamble....

there should be no forgiveness, the debt should be paid by the family through generations as it's done in countries like Italy, where the big mortgage is handed down to the next generation!

I would resent having to pay higher taxes to bail these people out that were greedy and screwed up!

andrewdeerpark

CamperMan
These people (bailout merchants) are bending politicians ears in their clinics, writing books, getting radio time on Joe Duffy, TV3 etc saying look at poor me and my debt misery and its winning, as the legislation is their being debated with general political consensus, even Sinn Fein (the only current rebels to the political norm) welcomed the bill.

So people with you point of view need to now stand up on stage and shout stop, however they have the high moral ground currently.

As I have stated I would allow “bankruptcy lite” in only very exception cases, you have a simple belief of no bailout or write off and I respect that, time to speak up against these changes so.

This is where our increased taxes coupled with reduced services and cut backs are going, as well as paying the IMF, bondholders and ECB of course.

johncam13

Does this really make a difference, Does it apply to non gauranteed banks aka ulster and NIB

Tombo2000

johncam13 wrote: »

Does this really make a difference, Does it apply to non gauranteed banks aka ulster and NIB

Brendan Burgess of askaboutmoney is saying this new legislation doesnt make much difference; basically because as things stand, a customer can already go to a bank and arrange a write-down whilst continuing to own the property. He says the difference is that there is now an intermediary (the Personal Insolvency Trustee) in place; and he also says that the bank is not obligated to approve it.

But here is the naunce for me.

The government owns the banks, so they direct what banks do. In a normal economy, banks would be forfeiting on tens of thousands of properties every year in Ireland......thats what banks do when the loan repayments stop......all around the world, thats what they do. They retrieve whatever value they can get.

But here, the banks didnt do that because it wasnt govt policy for social reasons.

And in this instance, it will be bank policy to agree to the PIA writedowns, because that is what the govt will tell the banks to do.

To answer your question, the PIA will apply to all banks. All banks will have option of refusing the application. but the only ones that will refuse the application are the ones where the Irish govt doesnt have a stake, i.e. Ulster, KBC etc.

For the same reason ALL of the foreclosures that have happened in the property sector have come from Bank of Scotland, Ulster and Danske (NIB). None of them have been from AIB, BKIR, EBS, Nationwide.

To summarize, once again the people that overborrowed are rewarded. The people who were prudent get shafted.

andrewdeerpark

Tombo2000 wrote: »

To summarize, once again the people that overborrowed are rewarded. The people who were prudent get shafted.

Pretty much sums if up.

The final bankrupcy option is legally binding (as it was in the old bill) on all banks so it will apply across the board. Even foreign banks and banks with no Irish base where the applicant is Irish resident, although this can be a bit of a legal mine field as we see with Sean Quinn.

thebman

This throws moral hazard out the window.

How are they hoping to prevent a property bubble in the future when they are actually still encouraging property bubbles by saying the sane will bail you out when it all goes horribly wrong if you buy at the wrong time?

TeresaDarling

I am 46 years old and recently lost my job, I had my children late in life so have 2 young children, I regret that I have lived a life of abstinence and saving to pay for e.g furniture and holidays, my ex gambled it all away (including MY house that the judge awarded him half off) he cant pay maintenance but still has his business, just not in his name, so now he is bankrupt

If I had known 15 years ago I would have run up stupid debts instead of living within my means, why work your yanyans off to stay out of debt?

I totally disagree with bankruptcy, you start your own business (which I am in the process of) you take the consequences, I do think though that dole/social services should be there if it all goes belly up

Maybe its my age or my 2nd recession but I will not get any more than €3000 in debt for the business, maybe I should? run up so many debts they get written off? or do it the old fashioned way, work, work, more work, then work harder

jased10s

i dont agree forgivness , a general write down across the board to the value of what houses are worth would be better. maybe a 100k reduction to all ( i know the idea is not popular )

still paying the morgage comfortably but angred the ptsb can milk more then is worthy and it's a state owned bank. Maybe they should make a standard percent for all banks.

We can and will pay but be fair about the rates.

thebman

jased10s wrote: »

i dont agree forgivness , a general write down across the board to the value of what houses are worth would be better. maybe a 100k reduction to all ( i know the idea is not popular )

still paying the morgage comfortably but angred the ptsb can milk more then is worthy and it's a state owned bank. Maybe they should make a standard percent for all banks.

We can and will pay but be fair about the rates.

Only if all renters in the state get a free 100K each too...

[Jackass]

Tombo2000 wrote: »

its an absolute outrage.

I bought my place in 2005. I was on very good money at the time, a six figure salary.

I paid at the upper limit of what I was comfortable paying, that is to say my mortgage payments initially were about one fifth of my monthly wage.

I remember being absolutely baffled going to house viewings, where maybe 60 or 70 people would show up. I knew I was on a very good salary, I couldnt figure out how these people could afford it.

Now I find out that they couldnt afford it, and are to be bailed out.

The same people who recklessly pushed up prices by buying houses they couldnt afford.

My own house has dropped easily 50% (€150k) in value, if I'm lucky.

My income has dropped 40% in the same time, so that my mortgage payment is closer to 1/3 of my salary......I can still afford it, but only just.

I lost my job last year; and am now finding out that I would have been better off not finding another job and ceasing my mortgage payments, rather than finding a job and continuing them.

It is so frustrating........its the biggest kick in the teeth since the whole thing began.

Fine Gael trying to out do Fianna Fail in giving two fingers to honest people who pay their own way.

:rolleyes:

Actually, it's a fantastic piece of legislation that, had it been in place prior to the crash, could have changed things somewhat for people who are now bankrupt, in entirety.

So what's your main gripe here, that you weren't financially ruined enough to benefit from this?

Poor pet has lost a 6 figure salary? Well, then you simply didn't plan for that massive cut in pay, did you? Just like the people you're complaining about didn't.

It makes me laugh at our Irish attitude of "what about me??" - Never like to see anybody catching a break without considering what's in it for them....

Have you been living in a house where you can't pay your electricity or heating bills for the last number of years? You can't afford to pay for your house because you were self employed, being innovative and providing employment in the Economy, maybe the wife lost a job too in a company gone bust. Maybe your business debts in being a productive member of the economy have followed you years after the company has gone bust. Have you had to sell your car(s) and come home to a wife and kids feeling like a failure? Not being able to find work after losing a very solid job that the entire world told you was part of a gravy train that was never going to end?

You said you got caught, so I presume you didn't see this coming either, but you're not financially ruined enough to benefit from new legislation? Sickening, isn't it?

Have you had debt collectors banging on your door, calling your house, or having humiliating meetings with banks and credit institutions?

I've never bought a house, I don't have a wife or kids, I was slightly young enough towards the peek of the boom that I wasn't looking for major life changes like buying a house or starting my own business, but even I can identify the absolute human tragedy in all of this. Peoples lives have been ruined.

And they're not evil geniuses who have their hand in your pocket, picking out your tax, they are people just like you, who got caught, but their world collapsed a lot worse than yours did. So how about thinking about how lucky you are, rather than looking to those worse off than you in snide at any help they are getting to retain a basic human right of a roof over their head and not being harrassed every day and night as they have been for the last number of years. I've seen it happen to people, I've heard of it a million times, and I can assure you these people aren't laughing in their mansions at the help they're getting.

But it's your pop at the Government that is my favorite part. How dare they, right? How dare they reduce bankruptcy legislation so that the innovative people operating in an over heated economy not have 12 years of their life written off by bankruptcy. How dare the Government help them out, or try and let people get back on their feet.

What do you think is happening when you're paying their mortgage? You know that many will lose ownership to their homes because of this, but at least not be put out on the street? Your tax will be going to the bank, which is owned by the Government, so it's back where it started, as tax that you owe to this state.

So well done for paying your way, and I'm sad to hear that you feel that you've now found out that you would have been better off not getting another job and paying your mortgage.

But you know what? If you could go back in time, I say you'd still have taken the job, paid your mortgage so your credit isn't ruined for circa 5 years, and you would chose to not deal with being unemployed and unable to feed a family or do anything you like to do, just so you can be as ruined as the people who get help.

They're not leaches, and because your circumstances haven't collapsed as bad, doesn't make you any better than them.

If you want to get annoyed at someone, don't direct it at the people who's lives have been ruined, or the lost generation, or the Government that is cleaning up the mess (and seems people aren't interested in seeing it cleaned up if their own selfish mindset and regret isn't pandered too, rather than looking at what actually needs to be done to resolve the problem now, prevent it happening again, and without the possability of changing how we got here, just dealing with it), blame it on the greed of the last Government (and it's sickening that you would compare the current lot to the previous lot, I can't imagine anything that would be more insulting than being compared to the last lot, and at least this Government is honest and trying to fix things, if you have any better ideas I suggest you run in your local elections and tell us all how easy it is to fix), and blame the banking industry and the financial regulator, amongst hundreds of other people who conspired, mostly through dishonesty and greed, to bankrupt a nation. Just don't blame your neighbor.

mari2222

Will it help the 180 people to whom the banks lent an average 340million EACH based on their business plan to sell houses to the rest of us?

Head The Wall

It will be interesting what they decide as "reasonable" living expenses, especially considering a judge counted 27k a year on private tuition as a necessary cost to one of our failed developers.

mari2222

Head The Wall wrote: »

It will be interesting what they decide as "reasonable" living expenses, especially considering a judge counted 27k a year on private tuition as a necessary cost to one of our failed developers.

completely agree with you. well said.

MadsL

I'll say this - whilst I stayed well out of the property market and rented through the madness; I had people I knew that absolutely hammered me for quoting the Economist's pessimistic view of Ireland and predictions of a 40% crash. People actually laughed in my face when I talked about what had happened elsewhere and how equities generally globally perform better than real estate. I was told Ireland was different.

Now after two layoffs in one year, I'm gone from Ireland after 15 years there, however, were I still there I would be damned if I would let my income taxes pay for the 'it's the media talking it down' brigade's mortgage forgiveness. I'd advise anyone that doesn't own a property to get out and let the chips fall where they may if mortgage bailouts start happening.

That's not to say I have no sympathy at all, but the Govt should have acted faster in setting up short sales and letting those not servicing their mortgage get out of the property and restructure the debt. This would have allowed new buyers to feel they were safe to buy at the bottom and the property market might stabilise as it is now doing in the US. Dillydalling serves no-one.

rodento

So someone please explain to me why the banks will rent the peoperties back to ex mortgage holders/defaulters instead of renting the properties on the open market or selling them

Sounds like a bailout by the back door:mad:

FreudianSlippers

I'll probably get hammered for saying this, but it's slightly worrying to have this all occur outside of the scope of the courts. The banks do not have people's best interests at heart and bankruptcy is not the answer in all cases.

rodento wrote: »

So someone please explain to me why the banks will rent the peoperties back to ex mortgage holders/defaulters instead of renting the properties on the open market or selling them

Sounds like a bailout by the back door:mad:

They're making money off them now until they raise in value. It's sound logic really.

Spiritofthekop

jased10s wrote: »

i dont agree forgivness , a general write down across the board to the value of what houses are worth would be better. maybe a 100k reduction to all ( i know the idea is not popular )

still paying the morgage comfortably but angred the ptsb can milk more then is worthy and it's a state owned bank. Maybe they should make a standard percent for all banks.

We can and will pay but be fair about the rates.

Sounds good. I'll take my 100,000 in new crisp 100 notes please.

Thats the only fair way right??

Spiritofthekop

rodento wrote: »

So someone please explain to me why the banks will rent the peoperties back to ex mortgage holders/defaulters instead of renting the properties on the open market or selling them

Sounds like a bailout by the back door:mad:

Banks would rather hold onto the keys of the house and wait 20 years until property prices "might" go crazy again before thinking of selling them off now.

Why would they sell a house now and move neg equity loan into a personal one which the client might not pay of and leave the country.

The Banks are again screwing the country and the property market by not letting it hit rock bottom.

Sham of a country... & disgusting place to live.

rodento

Spiritofthekop wrote: »

rodento wrote: »

So someone please explain to me why the banks will rent the peoperties back to ex mortgage holders/defaulters instead of renting the properties on the open market or selling them

Sounds like a bailout by the back door:mad:

Banks would rather hold onto the keys of the house and wait 20 years until property prices "might" go crazy again before thinking of selling them off now.

Why would they sell a house now and move neg equity loan into a personal one which the client might not pay of and leave the country.

The Banks are again screwing the country and the property market by not letting it hit rock bottom.

Sham of a country... & disgusting place to live.

Thing is are they and should they be allowed to become landlords as they are banks

djpbarry

Spiritofthekop wrote: »

The Banks are again screwing the country and the property market by not letting it hit rock bottom.

Yes, everything is the fault of the banks and not the people to whom they lent.

Spiritofthekop wrote: »

Sham of a country... & disgusting place to live.

Relative to where?

MadsL

rodento wrote: »

Thing is are they and should they be allowed to become landlords as they are banks

How does dealing with financial services equate to being property management agents? Not the same skill set really..

Banks own loans on property not the property itself...

Tombo2000

[Jackass] wrote: »

:rolleyes:

Actually, it's a fantastic piece of legislation that, had it been in place prior to the crash, could have changed things somewhat for people who are now bankrupt, in entirety.

So what's your main gripe here, that you weren't financially ruined enough to benefit from this?

Poor pet has lost a 6 figure salary? Well, then you simply didn't plan for that massive cut in pay, did you? Just like the people you're complaining about didn't.

It makes me laugh at our Irish attitude of "what about me??" - Never like to see anybody catching a break without considering what's in it for them....

Have you been living in a house where you can't pay your electricity or heating bills for the last number of years? You can't afford to pay for your house because you were self employed, being innovative and providing employment in the Economy, maybe the wife lost a job too in a company gone bust. Maybe your business debts in being a productive member of the economy have followed you years after the company has gone bust. Have you had to sell your car(s) and come home to a wife and kids feeling like a failure? Not being able to find work after losing a very solid job that the entire world told you was part of a gravy train that was never going to end?

You said you got caught, so I presume you didn't see this coming either, but you're not financially ruined enough to benefit from new legislation? Sickening, isn't it?

Have you had debt collectors banging on your door, calling your house, or having humiliating meetings with banks and credit institutions?

I've never bought a house, I don't have a wife or kids, I was slightly young enough towards the peek of the boom that I wasn't looking for major life changes like buying a house or starting my own business, but even I can identify the absolute human tragedy in all of this. Peoples lives have been ruined.

And they're not evil geniuses who have their hand in your pocket, picking out your tax, they are people just like you, who got caught, but their world collapsed a lot worse than yours did. So how about thinking about how lucky you are, rather than looking to those worse off than you in snide at any help they are getting to retain a basic human right of a roof over their head and not being harrassed every day and night as they have been for the last number of years. I've seen it happen to people, I've heard of it a million times, and I can assure you these people aren't laughing in their mansions at the help they're getting.

But it's your pop at the Government that is my favorite part. How dare they, right? How dare they reduce bankruptcy legislation so that the innovative people operating in an over heated economy not have 12 years of their life written off by bankruptcy. How dare the Government help them out, or try and let people get back on their feet.

What do you think is happening when you're paying their mortgage? You know that many will lose ownership to their homes because of this, but at least not be put out on the street? Your tax will be going to the bank, which is owned by the Government, so it's back where it started, as tax that you owe to this state.

So well done for paying your way, and I'm sad to hear that you feel that you've now found out that you would have been better off not getting another job and paying your mortgage.

But you know what? If you could go back in time, I say you'd still have taken the job, paid your mortgage so your credit isn't ruined for circa 5 years, and you would chose to not deal with being unemployed and unable to feed a family or do anything you like to do, just so you can be as ruined as the people who get help.

They're not leaches, and because your circumstances haven't collapsed as bad, doesn't make you any better than them.

If you want to get annoyed at someone, don't direct it at the people who's lives have been ruined, or the lost generation, or the Government that is cleaning up the mess (and seems people aren't interested in seeing it cleaned up if their own selfish mindset and regret isn't pandered too, rather than looking at what actually needs to be done to resolve the problem now, prevent it happening again, and without the possability of changing how we got here, just dealing with it), blame it on the greed of the last Government (and it's sickening that you would compare the current lot to the previous lot, I can't imagine anything that would be more insulting than being compared to the last lot, and at least this Government is honest and trying to fix things, if you have any better ideas I suggest you run in your local elections and tell us all how easy it is to fix), and blame the banking industry and the financial regulator, amongst hundreds of other people who conspired, mostly through dishonesty and greed, to bankrupt a nation. Just don't blame your neighbor.

thats quite long, a bit too long to take it all in.

My point is simply this.

I can pay my way.

I have always paid my way.

When I bought my house, I factored in reduced wages (which has happened to me). In other words, I bought at such a level that my salary would cover the mortgage even if my salary was cut, which it has been by 40%.

When I bought my house, I made sure I left over enough savings so that I could pay my mortgage even if I lost my job (which I did do, and was out of work for quite some time). So to contradict your first point; I did plan for a reduction in wages.

My point is simply, that I would have been better off financially maxing out and completely throwing caution to the wind and getting the largest mortgage I could have found.

Because then I'd be in a position to say "guess what, I cant afford this mortgage.....reduce it for me".

I have no problem with people's mortgages being written off; but I don't see why they should get to keep the house.

My point is that the people who benefit under the PIA are the people who left no room for mistake; they left no room for reduced income or for redudancy. Thats nobody's fault but their own.

By the way.....the various personal remarks I dont appreciate.....I am not, as you described me, 'financially ruined'....I have never had, as you described, a six figure salary......your 'pet' comment is nasty and cheap.....

bbsrs

Tombo2000 wrote: »

I was on very good money at the time, a six figure salary.

I thought you said this about yourself.

jased10s

see this is the trouble with ireland, everyone argues between themselves rarther than take it to the streets and the gouverment, no back bone to stand up to the powers.

Last time on boards as it's just a depressing reminder of the lack of action in this country. And boards will make u depressed.

bring on the arguments, as im sure they will follow.....

djpbarry

jased10s wrote: »

see this is the trouble with ireland, everyone argues between themselves rarther than take it to the streets and the gouverment, no back bone to stand up to the powers.

You want to protest against the proposed bankruptcy legislation?

oscarBravo

jased10s wrote: »

...everyone argues between themselves rarther than take it to the streets...

Arguing among ourselves (or "debating") is the entire point of a discussion forum like this one. Inherent in the concept is the acceptance that it's possible that one point of view isn't the sole and only perspective with any validity. By publicly debating your point of view you test its ability to stand up to opposing arguments, and you get the opportunity to modify it to make it stronger.

Taking your point of view to the streets implies a complete certainty that it is absolutely correct, and demanding through force of numbers (rather than weight of logic) that it be put into practice.

I'm always a little bit worried about people who are so certain they are right that they don't want to entertain a discussion.

PrincessLola

skafish wrote: »

Surely there must be options other than "debt forgivness" for people in negative equity?
I bought my house in 2007, now worth aprox 50% of what I paid, however I dont expect anybody ekse to pay my morgage.
Yes, I could have saved myself a fortune by waiting, but at the time I acted for the best.
What about extended morgages? In places like Japan, 50 year morgages are the norm, and 99 years ore common.
Why should I as a tax payer, pay my neighbours morgage whil I am just about able to keep up with my own??

How do 99 year mortgages work? Surely you'd be dead before you paid it off? I'm confused

skafish

PrincessLola wrote: »

How do 99 year mortgages work? Surely you'd be dead before you paid it off? I'm confused

You may well be(dead that is, not confused); however, who ever inherits the property on which the morgage was taken out also inherits the remaining debt. the inheritor then has a choice: to sell the property, pay off the outstanding monies owed, and pocket the difference (hopefully a profit); or remain in the property and continue to pay the morgage.
Common in many parts of the world.
It is, appearently, also common in Japan for long term loans (not sure if they extend to 99 years) to be used for such things as joining fees for golf clubs. Membership is, in time, passed on to son no.1 who finishes paying the loan.

There may be other options out there?

However, I for one resent the prospect of paying for the failed gambles of people who bought properties they should never have bought in the first place.