How do you declare bankrupcy?

zenith

Not me, but someone I know has so much debt that there's no prospect of them doing anything about it. Obviously MABS is an option, but he's formed the opinion that MABS are nothing but frontmen for the banks anyway, who will do anything to squeeze some lids out of him. He's on a disability allowance, and that's likely to be it for the rest of his life.

(At EUR10 per week, which is probably all he can afford, *excluding interest*, he would be 120 before all his debt was paid).

He has nothing, he does not care what happens, he wants a fresh start. Is this possible?

Nuttzz

MABS i have heard are actually very good, and i would get him to look at that first, to go brankrupt is unusal in Ireland, the banks will come up with some deal for him even if it takes years rather than lose everything via someone going bankurpt.

If he does go down that route his name will be mud througout the irish banking sector and wont get any sort of credit again ever.

How did he form that opinion of mabs? I saw a programe on rte recently about a couple who were in a mountain of debt but with the help of mabs there were able to establish a stable record with their bank and managed to get a re-mortgage to clear their debts.

Bluehair

zenith wrote:

He has nothing, he does not care what happens, he wants a fresh start. Is this possible?

Forgive me playing devils advocate but as someone whos 'been there done that' a serious attitude adjustment to money might be the first thing in order.

Mabs are far from being a front for the banks and are well regarded in the industry as 'being better than nothing' as far as debt collection is concerned. They are excellent at achieving realistic debt reduction with the various institutions once they have a geniune understanding of the persons means.

I'm not judging as I have no way of knowing how the debt was run up but can say from personal experience that a first priority is a heartfelt analysis of the persons relationship with money and ability to handle it. 'Not caring what happens' and 'wants a fresh start' would worry me as being statements of someone in complete denial about whats happening to them.

Seriously, talk to Mabs, even if he aggrees nothing it's a good start to acknowledging the problem to himself.

zenith

He's well aware that he needs to readjust his attitude to money, but that 10 Euros a week would make a real difference to his quality of life going forward.

He'll proably never need want or get credit again, and he does not care. Mabs can't get him anything he wants.

So, how do you go bankrupt?

Bluehair

zenith wrote:

So, how do you go bankrupt?

As far as I'm aware (and it's a while since I checked this out during my own situation) an individual can't declare themselves bankrupt here it can only be done by the courts following action by a creditor.

It's far from what you seem to think (wash your hands of the debt, move on, no credit-who cares) and can involve repossesion of property or tangable goods (cars, tvs etc.), action against any money or assets you may have in an effort to recover money owed. By the way that can include a court order for deductions against any income you may have towards repayment of debts.

Sorry this isn't what you want to hear and trust me when I say I do understand where your mate is coming from right now, I spent years of sleepness nights trying to pretend it wasnt happening but eventually (with help) faced it and got the situation under control.

Honestly a face to face chat with Mabs is probably the best option for your friend right now. Theres no commitment to anything but at the start one of the things they'll do is tell all his creditors that he's talking to them, that alone will actually get them off his back for a while and any future corespondence can go through them.

Our man in Havana

2 ways:

Self bankrupt: you need to lodge 2,000 euroin the high court or have assets amounting to 2000 euro. Get a court date and you are then bankrupt.

Creditors bankryptcy: This is where the banks summons you to the high court and you are ajudged bankrupt. You would have assets which can be sold before they would do this. If you have nothing they would get nothing.

The banks are very unlikely to bankrupt a person unless there are considerable assets eg a house. The banks prefer to use installment orders to squeeze money as if your bankrupt no more money.

I agree that MABS are the banks helpers. If you can get the 2 grand together do it yourself and it is a big FU to the banks.

PM me for more details.

zenith

Bluehair wrote:

As far as I'm aware ... an individual can't declare themselves bankrupt here it can only be done by the courts following action by a creditor.

It's far from what you seem to think (wash your hands of the debt, move on, no credit-who cares) and can involve repossesion of property or tangable goods (cars, tvs etc.), action against any money or assets you may have in an effort to recover money owed. By the way that can include a court order for deductions against any income you may have towards repayment of debts.

Fair enough, so: he offers EUR10 a week through MABs, and lots of letters get sent, or his creditors take him to court and try to uncover any hidden assets. He really has nothing but the clothes on his back, so he is in an unusual situation. I'll talk to him about MABS for the time it might buy him, but frankly the situation is pretty black and white, and if it's not in his control to go there, then it's not in his control: but a bankrupcy would be a fresh start in his case, whereas MABS would be a death of a thousand cuts - it's not like he's got any assets to shield at all.

zenith

Bond-007 wrote:

2 ways:

Self bankrupt: you need to lodge 2,000 euroin the high court or have assets amounting to 2000 euro. Get a court date and you are then bankrupt.

PM me for more details.

PM sent.

Our man in Havana

If thats the case its up to the banks to Bankrupt him. As I said earlier this is very rare in the case of an assetless man. They would much prefer their 10 a week thru mabs than nothing at all. The banks will take out their installment orders etc and will if nessasary continue these for as long as nessasary.

If you find someone to front the 2k he can get rid of his problems for good. If you don't mind me asking how much is owed approx i might be able to advise better.

sixtysix

don't forget that even on disability allowance he is permitted to earn extra income subject to the consent of the department of social welfare-up to a max of €120 per week. he should check it out.

Victor

I think do go to MABS, I think it's unfair to call them frontmen. If nothing else, they'll be an awful lot nicer than the "nice" letters you get form the bank's solicitors.

sixtysix wrote:

don't forget that even on disability allowance he is permitted to earn extra income subject to the consent of the department of social welfare-up to a max of €120 per week.

This may be €20 hours and a much higher(!) sum of money.

RainyDay

MABS get a fair bit of unfair bad press. Some MABS clients seem to have this expectation that the MABS fairy will wave his magic wand and dissappear all those nasty debts, but life doesn't work like that. If it did, the banking system would implode within a matter of weeks. MABS will help in managing the banks and other creditors and will help with household budgeting, but there will of course be pain involved.

I can't understand how anyone with no assets can feel that they will never seek credit again in their lifetime. So no mortgage, no car, no credit card - for ever? Bankruptcy is not a magic bullet solution, and is rarely if ever used for personal debt in Ireland.

zenith

Bad press for MABS?

All I've heard here, bar one, is that they're the only way to go. I've never heard MABS bad-mouthed in the media.

> Some MABS clients seem to have this expectation that the MABS fairy will
> wave his magic wand and dissappear all those nasty debts, but life doesn't
> work like that.


I don't have any expectation that they can make this guy's problems go away. I thought that was the point of this thread. So we're in agreement, then.


> If it did, the banking system would implode within a matter of weeks.
....
> I can't understand how anyone with no assets can feel that they will
> never seek credit again in their lifetime.

I can't understand how you expect someone with huge debts, no assets and a disability allowance for income to be able to resolve the matter through a planned repayment scheme, no matter how well-intentioned. The banking system can look out for itself, thanks.

Current situation: loads of debt, no credit.
Mabs: loads of debt, slow repayment over decades, no credit.
Post bankrupcy: no debt, no credit. Or maybe, just maybe, small amounts of credit. I've seen backrupts recover.

So, other than the 'stigma' bullcrap, what's not to like about this plan?

sixtysix

your friend will recover either way-life goes on- who knows what is around the corner-the object of the excercise is to arrive around the corner in the best possible condition. there probably is little difference between the type of repayment that mabs will arrange and the type of repayment expected/demanded following bankruptcy. the difference is stigma. also your friend will have to make some arrangement with his creditors either way and mabs are experts at this.

lomb

i personally feel your friend should pay off his creditors. or even to the best of his ability.at the end of the day the banks may have made a mistake lending him anything and he may have made one borrowing anything but he should pay them off as best he can. to do anything else is theft.

the reality is he will have to come up with a bit of money to declare bankruptcy and no one in their right mind will give it to him. this is one of the reasons the law is set up like that. paying £10 a week back even if he lives a little poorer is more being a man than declaring bankruptcy than u realise.

RainyDay

zenith wrote:

Post bankrupcy: no debt, no credit. Or maybe, just maybe, small amounts of credit. I've seen backrupts recover.

Just to be 100% clear, you're saying that you've seen individuals who have declared bankruptcy in Ireland go on to get further credit without having cleared their original debts - right?

zenith

RainyDay wrote:

Just to be 100% clear, you're saying that you've seen individuals who have declared bankruptcy in Ireland go on to get further credit without having cleared their original debts - right?

To be 100% clear, ESB Bills, phone bills, gas bills, sky bills: all forms of credit. So, yes. Right.
Not getting that form of credit is the only kind that can hurt him.

>> No-one in his right mind ....

His family can be approached: they're not going to/be able to/want to pay off his debts, but they might be able to give him a fresh start.

>> To do anything else is theft.

Veering off-topic: what about that mighty old-fashioned sin of usury? Frankly, the banks are in the business of risk management, so if they made a balls of it, then that's some CIMA suit's problem.

Does anybody here have any information on bankrupcy, which was the original question? The prospect of my friend's defaulting on his loans bringing down the banking system notwithstanding.

lomb

why doesnt he become a man and pay £10 a week and feel some pain then he can learn the error of his ways. he seems to have a very casual attitude to paying his debts off. he invariably will get in trouble in the future unless his character changes fresh start or not. he wants to find a way to freeload onto others and accept donations from family? why doesnt he try paying £10 for a few years and accept a slight cut in his living standard. and then mayb consider it in the light of everything.

mabs are there to help, i would take full advantage of a service provided for free , if you were to avail of professional services expect to pay 50+euro an hour for them. If i was a family member i wouldnt give him a penny until he took some responsibility for his actions for at least a time till he understood then i would consider paying his debt off in full if it was a resonable amount. what are family for?but i would wait at least a few years and see him make an effort to repay some money even if its not alot, it would be alot for him. then once i could see he had changed i would consider paying off his debts.

furthermore and not withstanding he thinks the banks are thieves. what about the social welfare he is withdrawing from society. i am happy to pay taxes to keep the fabric of society together for those less fortunate than myself and those who have hit on hard times. but that doesnt excuse people drawing my taxes to be total freeloaders on society with zero responsibility.

zenith

lomb wrote:

why doesnt he become a man and pay £10 a week and feel some pain then he can learn the error of his ways.

Other than the fact that it's illness that has caused this situation, you'd be dead right. The him being on disability for the rest of his life is the clue.

By the way, he knows nothing of this thread, or the options that he might have: I'm actually trying to find options out for him without the sanctimonious bull**** about bankrupcy=bad.

What type of cripples is it okay to kick in your world, fella?

lomb

if hes drawing 100euro from the state a week then he hasnt got 10 euro to pay?

where is the money gone that he borrowed can i ask? what did he spend it on? how much is it? and did he become ill after he borrowed the money or was he ill at the time? doesnt he have insurance? there are numerous questions none of which have been answered.

of course i have no intention of kicking someone when they are down but cant understand what some people spend money on. by defination if they were wise purchases then the money or most of it will be there. was he borrowing to fund day to day expenses like food and cloathing and electricity?

zenith

lomb wrote:

where is the money gone that he borrowed can i ask? what did he spend it on? how much is it? and did he become ill after he borrowed the money or was he ill at the time? doesnt he have insurance? there are numerous questions none of which have been answered.

They have not been answered because they're completely irrelevant to the question "How do you declare bankrupcy?", which is not an illegal act, no matter how you try to pretend that it is.

So, back on topic.

RainyDay

zenith wrote:

To be 100% clear, ESB Bills, phone bills, gas bills, sky bills: all forms of credit. So, yes. Right.
Not getting that form of credit is the only kind that can hurt him.

>> No-one in his right mind ....

His family can be approached: they're not going to/be able to/want to pay off his debts, but they might be able to give him a fresh start.

>> To do anything else is theft.

Veering off-topic: what about that mighty old-fashioned sin of usury? Frankly, the banks are in the business of risk management, so if they made a balls of it, then that's some CIMA suit's problem.

Does anybody here have any information on bankrupcy, which was the original question? The prospect of my friend's defaulting on his loans bringing down the banking system notwithstanding.

So is Sky now considered to be an essential service which he can't live without? Whatever about ESB, phone, gas, I really find it very hard to believe that a declared bankrupt would be given credit by the Sky empire. If you are suggesting that he can't pay €10 a week to repay his debt, but he can pay €10 a month or more for Sky, you've just lost any tiny remaining granule of sympathy I had for your friend.

Defaulting on a loan is not just about the 'CIMA suit's problem'. It is the remaining customer of the bank (i.e. you & me) and the shareholders of the bank (i.e. you & me, assuming that you have a pension entitlement either privately or through the state) who coughs up to cover your friend's debts.

Your 'kicking the cripple' analogy doesn't hold water either. Strangely enough, arranging to wipe away the outstanding debts may not be the act of a best friend. It's like giving smack to a junkie - it solves his problem for today, but it doesn't solve his underlying problem. Blaming the illness for his debt seems to be classic diversionary tactic designed to avoid blame or responsibility. A real 'best friend' would go for the 'tough love' solution of ensuring that he adjusts his spending to match his income.

zenith

RainyDay wrote:

So is Sky now considered to be an essential service which he can't live without?

He does not have Sky, nor a gas bill. Barking up the wrong tree. Reread where that is mentioned and realise your mistake.

RainyDay wrote:

Defaulting on a loan is not just about the 'CIMA suit's problem'. Defaulting on a loan is not just about the 'CIMA suit's problem'. It is the remaining customer of the bank (i.e. you & me) and the shareholders of the bank (i.e. you & me, assuming that you have a pension entitlement either privately or through the state) who coughs up to cover your friend's debts.

As long as it's all about ensuring your comfortable retirement: but one of the things that you pay the ACCA plonk's wages for is risk management.

RainyDay wrote:

Your 'kicking the cripple' analogy doesn't hold water either. Strangely enough, arranging to wipe away the outstanding debts may not be the act of a best friend. It's like giving smack to a junkie - it solves his problem for today, but it doesn't solve his underlying problem.

Oh, yes it does. Solves it very nicely. Since he's really not going to be in any position to learn any tough love lessons for the time being.

Anyway, do you know anything about declaring bankrupcy? Just, you know, to move the topic along.

spongebob

Could you clarify for us whether the debts were

a) incurred (or largely so) before the disability occured , excluding interest.
b) incurred (or largely so) after the disability occured

)(*

zenith

alkjdflkajf wrote:

Could you clarify for us whether the debts were

a) incurred (or largely so) before the disability occured , excluding interest.
b) incurred (or largely so) after the disability occured

)(*

The disability is a chronic condition which has been managed with medication for many years: he is in receipt of disability allowance for the last number of months since he lost his job after the onset of an episodic attack, with - it appears - little prospect that he will be realistically able to return to work, at least within the medium time frame. Since he has also become separated in that timeframe, he is carrying a significant load of personal debt incurred from his marriage, for which there is no prospect of recovery from his spouse and minor children.

Thus, the answer is both (a) and (b). These are a normal person's debts - at least, would be quite normal to a person on a regular income with reasonable employment promotion prospects - made unmanagable by an illness and separation.

What are you thinking?

antoinolachtnai

Personally, it looks to me like the right thing for this guy to get all this debt off his back for the moment and try to get the rest of his life together. If he gets a bit of peace for a few years, he might be able to get back earning again. If he doesn't, well then his situation is going to get worse.

I have no idea what his budgetary situation is, but I'm sure it's possible that he just can't afford even a small weekly payment.

I don't know much about bankruptcy law, but I do know that people very rarely go personally bankrupt in Ireland. It is covered by the Bankruptcy Act (http://www.irishstatutebook.ie/1988_27.html) but the act looks like it is designed to deal with the case of people who have quite a lot of assets that need to be liquidated, rather than for people like your friend who essentially have nothing.

One option which I think he should consider is to go to MABS or the banks, and tell them (orally) that he is just too sick and too broke to pay them back their money, and that he won't be paying them back any.

I think they will take this like men. The guy you talk to won't take it personally. He just works there, it's not his money. I would be surprised if they haven't dealt with it before.

Then, just don't pay them.

If they decide to bring him to court and make him bankrupt, well, then they do that and the whole thing is over with, but it's quite likely they won't, once they look at his circumstances and realise there's no point sending the sheriff down to see him.

If he does this, they will put a big red mark on his credit bureau record, he won't be able to get any credit, and for all practical intents and purposes he'll be bankrupt.

He will obviously have to make some arrangement for services like the ESB and the rent, otherwise they'll just kick him off.

If at some point in the future he feels able to get back to work again and pay back some of the money, he can do that then, without all the messiness of discharging a legal bankruptcy.

I can't see how all the debt should necessarily fall to him when he is separated. But that is a very difficult legal point and depends on how the separation was done. If the banks think there is no prospect of getting the cash off him, maybe they will have a look at his former wife's circumstances. It's their problem, not his.

Best of luck to your friend. He's at the bottom now. He just has to concentrate on getting well. He mustn't give up hope. Good luck helping him find a way to get as much of this junk behind him as possible.

This sounds like a case of necessity to me. If carrying this guy for a while is going to make the AIB shares go down by a tenth of a penny, and the interest rate go up by a millionth of a point, I for one think that that is a price worth paying.

Has he tried to get free legal aid, or does he have a solicitor from the separation? It sounds like a visit to the solicitor would be a good idea, if he could bear it.

zenith

antoinolachtnai wrote:

Personally, it looks to me like the right thing for this guy to get all this debt off his back for the moment and try to get the rest of his life together. If he gets a bit of peace for a few years, he might be able to get back earning again. If he doesn't, well then his situation is going to get worse.

That's my conclusion.

antoinolachtnai wrote:

I have no idea what his budgetary situation is, but I'm sure it's possible that he just can't afford even a small weekly payment.

Literally, it's clothes on his back, rent allowance and disability.

antoinolachtnai wrote:

I don't know much about bankruptcy law, but I do know that people very rarely go personally bankrupt in Ireland. It is covered by the Bankruptcy Act (http://www.irishstatutebook.ie/1988_27.html) but the act looks like it is designed to deal with the case of people who have quite a lot of assets that need to be liquidated, rather than for people like your friend who essentially have nothing.

This is the thing I want to explore: why is that? Bearing in mind that functionally, the MABS route and the bankrupcy route are identical, why do people not go bankrupt more?

antoinolachtnai wrote:

One option which I think he should consider is to go to MABS or the banks, and tell them (orally) that he is just too sick and too broke to pay them back their money, and that he won't be paying them back any.

This may be the route he goes, but I want to destruct-test my other theory first.

antoinolachtnai wrote:

If at some point in the future he feels able to get back to work again and pay back some of the money, he can do that then, without all the messiness of discharging a legal bankruptcy.

What's involved here: once his assets are distributed, is that not it - from a quick scanning of the act. I mean, the purpose of the Bankrupcy Act is to provide a mechanism for recovery, so presumably even the most pauperised must work their way through eventually.

antoinolachtnai wrote:

I can't see how all the debt should necessarily fall to him when he is separated.

His former wife is perfectly vindictive enough to take any attempt to recover anything - whether there is anything left to recover is moot - out on the children. He's not willing to go there, or endanger his access.

lomb

what has he got to lose going the MABS route? 10 euro a week? and he can always go bankrupt later anyway! it makes no sense why he is not availing of professional advice.

furthermore, he will not be free of his debts for 10 years.until then he would be an undischarged bankrupt, only after 10 years can he ask a judge to discharge his bankruptcy hence most people prefer the 10euro a week option........

zenith

lomb wrote:

what has he got to lose going the MABS route? 10 euro a week? and he can always go bankrupt later anyway! it makes no sense why he is not availing of professional advice.

He's not doing anything here. I'm asking a few questions, is all, and only hearing MABS, MABS, MABS as an option.

lomb wrote:

furthermore, he will not be free of his debts for 10 years.until then he would be an undischarged bankrupt, only after 10 years can he ask a judge to discharge his bankruptcy hence most people prefer the 10euro a week option........

Can you provide me with a source for this? In particular, the 10-year term.

Our man in Havana

I have found that taking the matter to a solictor won't help as most won't take on civil debt cases. I was told by a solicitor that having represenation in a district court for a debt case sends all the wrong signals to the judge, i.e. he has a lawyer how did he pay for it.

Under the bankrupcy act social welfare money cannot be taken to pay any debts. This is important to note.

He should not be afraid of the courts as they will only look badly on those that WON'T pay and not those that CAN'T pay. The banks should realise this and they will quickly see that they would be wasting their money and the courts time if the debtor has nothing.

I am currently helping a personal friend thru a similar ordeal and I have found the district court judges to be more than sympathic to his plight. One creditor was particularly strong in chasing for their money that the judge dismissed the case and told the solictor to go and chase bigger fish. The judge even suggested to go to the High court to seek protection orders from his creditors. He is in the final stages of getting bankrupcy sorted so he should be free and lear shortly.

lomb

cant unfortunately did it in business studies class and remember it well. if bankruptcy was that easy wed all do it, because it appears to be the path of least resistance. however the law has desiged it that a creditor would have every entitlement to assets any and all be it a lottery win or inheritance or anything for 10years. best if u want more info ask MABS (yes MABS ) they would have a leaflet or alternatively if u dont trust them buy a leaving certificate businnes studies book and the irish law will be and commentry will be in there in all its glorious detail.
it is 10years trust me. oh and if he does find the money at any point he can pay his creditors and a judge will then discharge it. a full discharge will not happen for 10years. this is to stop people hiding assets declaring bankruptcy and then living happily ever after. the creditor has 10 years to get paid in the interim which the law deems long enough.