Choose paying back Mortgage or Choose Life?

Oink · 24-10-2012 04:26PM

You borrowed a lot of money on a investment that appeared 98% sure to pay off. You were unlucky and lost, but you accepted the risk in the first place. Maybe I would have done the same if I'd had the money.

Being broke happens to a lot of people, but it sounds like you can stand on your own two feet without any hands-out.

Maybe you would be less unhappy if you were to roll with the punches and try and make the best of things as they are now. It will be easier on you than to bang your head against the wall.

My 2c. Best of luck OP.

Menas · 24-10-2012 04:27PM

It is a bit of a mess OP and I know you did not come here to get abuse.

Of course there are plenty of 'what if' questions and I am sure you have asked yourself them a thousand times.

But you are where you are. My own advice is that you should get legal advice.

There are some legal firms out there who will negotiate on your behalf with the banks for a debt write down or outstanding debt. I heard one on newstalk some time ago but cannot remember the name.
The banks dont want to have that conversation and few have suceeded, but if you really are in trouble then best to get the ball rolling.

PS. You are not a Garda Sergant by any chance?

tipptopper · 24-10-2012 04:28PM

johnwest288 wrote: »

Im in the same boat as you and I would ,Choose Life. Choose a job. Choose a career. Choose a family. Choose a ****ing big television, choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of ****ing fabrics. Choose DIY and wondering who the **** you are on Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing ****ing junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, ****ed up brats you spawned to replace yourselves. Choose your future. Choose life... But why would I want to do a thing like that? I chose not to choose life. I chose somethin' else. And the reasons? There are no reasons. Who needs reasons when you've got heroin?

In the name a jaysus, what's this?

ash23 · 24-10-2012 04:33PM

In a similar position OP, stuck with a load of negative equity in a house with an ex. We rented it out and both got cheaper rental places.

On the plus side, rental prices are picking up again and so are house prices (veeeerrrrrrry slowly) so it's not all doom and gloom.
Talk to the banks, try to go interest only on one property maybe?

Have you spoken to the bank at all?

the groutch · 24-10-2012 04:33PM

OP, the property market didnt literally crash overnight.
it's been falling little more than 1% per month, and if the intended profits were as big as suggested you had plenty of time to sell the newly built one
I expect your greedy nature made you wait and wait to see would things recover.
Either that or you tried to sell and just chased the market down

funkhouser · 24-10-2012 04:37PM

In any sane and functioning society debt like this, which has no chance of being repaid and should never have been lent in the first place, would be written down and the house sold or used by the bank for maximum return.

People who say "tough but you should remain in debt slavery and have no life ever again, you borrowed it so pay it back" (yawn) are extremely ignorant.

Incurring debt is a two way arrangement and a bank's profit is partially a return on the risk they have taken in lending the money. If I lend a car salesman on 45k a year 500,000 euro to build a house and sell it for profit, going against all previous banking norms, I've taken on a lot more risk than I should have. After it goes belly up; property market or car market crashes or he becomes terrible at selling cars and ends up in a job on 30k a year I wouldn't expect anybody to tell me: "tell him it's all HIS fault, he should live in one room, rent out all the other rooms and should give all his money to the bank for the rest of his working life". The law shouldn't. Society shouldn't. Creeps on internet message boards shouldn't. But they mostly do.

Both parties should take a hit. The more risk a bank takes the bigger hit it should take. Yes, we now own the banks and there are loads of extremely greedy people who won't now pay mortgages just 'cos but a general principle "when the borrower is clearly in great difficulty and the lending was reckless the bank should shoulder a lot of the burden, morally and financially" should really start being recognised by everyone. We'll still be in this situation as a country in 20 years if we don't.

People with impossible debt burdens are not criminals of a lower caste and should not be forced into life long debt slavery.

petethebrick · 24-10-2012 04:40PM

funkhouser wrote: »

In any sane and functioning society debt like this, which has no chance of being repaid and should never have been lent in the first place, would be written down and the house sold or used by the bank for maximum return.

People who say "tough but you should remain in debt slavery and have no life ever again, you borrowed it so pay it back" (yawn) are extremely ignorant.

Incurring debt is a two way arrangement and a bank's profit is partially a return on the risk they have taken in lending the money. If I lend a car salesman on 45k a year 500,000 euro to build a house and sell it for profit, going against all previous banking norms, I've taken on a lot more risk than I should have. After it goes belly up; property market or car market crashes or he becomes terrible at selling cars and ends up in a job on 30k a year I wouldn't expect anybody to tell me: "tell him it's all HIS fault, he should live in one room, rent out all the other rooms and should give all his money to the bank for the rest of his working life". The law shouldn't. Society shouldn't. Creeps on internet message boards shouldn't. But they mostly do.

Both parties should take a hit. The more risk a bank takes the bigger hit it should take. Yes, we now own the banks and there are loads of extremely greedy people who won't now pay mortgages just 'cos but a general principle "when the borrower is clearly in great difficulty and the lending was reckless the bank should shoulder a lot of the burden, morally and financially" should really start being recognised by everyone. We'll still be in this situation as a country in 20 years if we don't.

People with impossible debt burdens are not criminals of a lower caste and should not be forced into life long debt slavery.

Well said.

24-10-2012 04:50PM

mariano rivera wrote: »

I wanted an Afterhours view on this as its not just a financial question but a lifestyle question

My story is this:

I built a house back in the boom years

My intention was to sell the house and with the profit have money towards buying my own house

Bank gives me a mortgage for a second house on the back off the house that i have yet to sell

Anyways, boom busts

Now left with two houses in negative equity

Approx. negative equity of 350k

I know, my own fault, my risk etc.

In the last 4 to 5 years, have done deals with the bank

Thankfully, I still have a job, that pays ok

But, I am skint, skint, skint with these payments

No money for anything out of the norm. have to watch every penny.

Unless I live until I am 200 years old, I have no chance of paying back this money

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Don’t care about credit rating or letters form the bank anymore

Just want start living again?

You are very brave to post the above in After Hours

doolox · 24-10-2012 05:08PM

I am in a similar situation to the OP regarding a rental house. The mortgage and rent are about equal but the tax treatment is brutal.

Basically only 75% of the interest is allowed off the income obtained from the tenants. About 60% of the rental intake is deemed taxable and incurs 21% tax, 4% PRSI and 7% USC. I suppose I am luck that I have a tracker mortgage but the govt is getting at least 30% of any advantage accrued.

On the surface the rent paid SHOULD cover the mortgage payment but I have to stump up the tax and other govt deductions on a sum payable over 20 yrs on a house now only worth half what I paid for it.

Also I found out that if you are forced to move house and rent out your own house to get money to rent near your new job you are not allowed to offset any of the rental you pay on your new location against rent obtained in your old location. In a static housing market where selling at a reasonable price is impossible ( the cost to build ) then moving for a job becomes impossible or too expensive.

The same applies to anyone seeking to rent a smaller place and let their own house to more affluent people.....you are not allowed to offset rent on the smaller place against rent received on the existing "too big" house.

It is also impossible to evade or avoid these taxes as the PRTB has all the data so the taxman will eventaully catch up with potential evaders........

renofan · 24-10-2012 05:26PM

Thank feck I didn't buy/build and rent instead. Can't imagine what its like to have a massive mortgage(s) and not be able to pay them and the house not worth whats left on the loan. The stress alone would kill ya I'd say.

CianRyan · 24-10-2012 05:39PM

Sell the second house and hand every penny of that to the bank?
I assume you'll get at least €200k-€250k if it's a decent size in a decent area. That's a good lump of money back to the bank and with a smaller mortgage to pay back you may be able to work out a better deal with them?

Maybe it's a deadly house you'll get more for it, **** knows, worth looking into anyway.

24-10-2012 05:40PM

I hope that any policy brought in to help those in negative equity will be first and foremost used to help those who only own one property. anyone who owns more than one house should get a stricter more sever debt deal as while the banks were throwing money around it was the greedy people who thought they could make an easy few euros. I know some will accuse me of being on a high horse but at 27 years of age I have absolutely no debt while I know people my age with close to half a million in debt that they will never pay back.

The op here was greedy, they assumed that taking out two mortgages was a great idea as the first house would sell for a profit. If the op and the thousands like him or her had any cop on they would have sold the first house before starting the second. Really find it hard to have any sympathy for people like that and wish they would stop all this crying about how hard it is. You alone made the decision and should have been aware of all the possibilities and as such planned accordingly.

Kidchameleon · 24-10-2012 05:47PM

mariano rivera wrote: »

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Well don't rent, thats dead money :rolleyes:

RoverZT · 24-10-2012 05:48PM

renofan wrote: »

Thank feck I didn't buy/build and rent instead. Can't imagine what its like to have a massive mortgage(s) and not be able to pay them and the house not worth whats left on the loan. The stress alone would kill ya I'd say.

How old are you if you don't mind me asking?

I am 26 and the property boom came a few years too soon for me, in college/ job with low wages.

If I was 36 I could easily have been caught out.

My generation have been very fortunate imo, we have learned from others mistakes.

I am terrified of any loan now, will keep renting for years until I have some kind of capital in place.

24-10-2012 05:59PM

RoverZT wrote: »

How old are you if you don't mind me asking?

I am 26 and the property boom came a few years too soon for me, in college/ job with low wages.

If I was 36 I could easily have been caught out.

My generation have been very fortunate imo, we have learned from others mistakes.

I am terrified of any loan now, will keep renting for years until I have some kind of capital in place.

Our generation hasn't been lucky. A lot of 26 year olds have mortgages and massive debts. People I was in secondary school have debts in the amount of half a million. At 21, one lad I know was driving a brand new jeep and every year he'd trade up. At 23 he had a house with a mortgage of 300,000 and was going on three or four foreign holidays a year.

OnTheCounter · 24-10-2012 08:10PM

Deleted User wrote: »

Our generation hasn't been lucky. A lot of 26 year olds have mortgages and massive debts. People I was in secondary school have debts in the amount of half a million. At 21, one lad I know was driving a brand new jeep and every year he'd trade up. At 23 he had a house with a mortgage of 300,000 and was going on three or four foreign holidays a year.

what was he working at?

Im 27 and less than 5% of the people I went to college with have mortgages. We got lucky with mortgages and unlucky with jobs.

Boombastic · 24-10-2012 08:31PM

If fairness this decision should have been made before you decided to become a land barron.

UCDVet · 24-10-2012 08:45PM

I'm not a legal expert - but I'm imagine going to a new country would give you a new start. Technically, it wouldn't wipe out your debt - but go to Canada, US, or Australia or somewhere else that is outside of the EU and across an ocean.

Other countries have more favorable bankruptcy laws and they won't jail you/extradite you for a debt owed in Ireland. I'm not a lawyer - but it sounds like you don't have a lot to lose. I know in the US - bankruptcy wipes out your debts and is removed from your credit history in seven years.

If you could get a job in the US and declare bankruptcy - I'm pretty sure (again, I'm not a lawyer) no court in the US is going to garnish your wages to repay some bank in Ireland. The Irish legal system would recognize your debt - but so what?

I'd talk to a solicitor and compare different countries - then do whatever is best. Sadly, Ireland is rarely a good financial choice these days

Also - since you're leaving anyway - I'd stop paying the mortgage for as long as you can before you leave to save money.

MadsL · 24-10-2012 08:56PM

OP - what was the worst case scenario you thought of as you signed the 2nd mortgage?

Pottler · 24-10-2012 09:04PM

TOOYOUNGTODIE wrote: »

you wont have money in your pocket.

your going on a one way ticket to 'instalment order' city. population you!!
They will get an order directly against you wages!!

only way to ''hand back the keys'' and have any chance of a life, is to leave this island.

And do not register anywhere on earth using your own name or any of your details from Ireland. Because if you do, the letters will start coming to your new address and the court actions will start in your new homeland. I know this as a family member works for a Bank and they will go to the ends of the earth after you! How fecked up is that?? The usual way is that you emigrate, apply for a social security number and bang, they have you. The whole "just go live somwhere else" thing is a myth, sadly.:(

Stheno · 24-10-2012 09:07PM

tipptopper wrote: »

In the name a jaysus, what's this?

Never seen trainspotting then?

UCDVet · 24-10-2012 09:27PM

Pottler wrote: »

And do not register anywhere on earth using your own name or any of your details from Ireland. Because if you do, the letters will start coming to your new address and the court actions will start in your new homeland. I know this as a family member works for a Bank and they will go to the ends of the earth after you! How fecked up is that?? The usual way is that you emigrate, apply for a social security number and bang, they have you. The whole "just go live somwhere else" thing is a myth, sadly.:(

The idea isn't that the Irish bank couldn't follow you; it's that other countries have different legal systems regarding debt. It doesn't matter if I owe Bank of Ireland 500k euro - what matters is what Bank of Ireland can legally do to me, to get that money bank.

This is a US website and the laws in the US can vary from state-to-state; regardless there are at least some cases where declaring bankruptcy in the US will wipe out forgein debt, in the eyes of the US government.
http://www.lawqa.com/qa/does-bankruptcy-erase-foreign-debts

Again - if you live in the US and the US legal system says you don't owe money to some Irish bank - there is little the Irish bank can do to extract those funds from you. You could have millions in a US bank account and they couldn't touch it, at least in theory.

Obviously, you'd want to research this and select the best country/state/providence/whatever for your purposes.

rugbyman · 24-10-2012 09:31PM

Op,

re all the whinging moaners who inhabitthis thread
funkhouser puts it well

"Creeps on internet message boards shouldn't. But they mostly do."

Op , i suggest you
1 wait for the new legislation re personal insovency
2 continue to prepare to LIVE, tot up your debt,present values(largely irrelevant
if you can pay or even half pay) amount of neg equity, and somehow forecast how much you will have paid in by end of say ten years.
(by the way when I say you havepaid in that is partly your renters paying in for you and in fact buying you the property)
3 consider which mortage co you are with, e.g. First nationwide , may not exist in a while
4 if you do decide to hand back the keys, bear in mind that you will be saving the mortage co a lot of time ,money and hassle
5 consider also. that while you say you are talking with the bank, are you in arrears, if not you are streets ahead of thousands
6 if you hand back, and go and live in N.I, while keeping your job, the bank can get an order against your wages, but the Judge is likely to be sympathetic to you. it wont be a lot.

this is a bit of a ramble, am tired, perhaps you might care to print your take home pay, value of houses, then and now, rents coming in and those of us who would like to help might be able to do so.

Regards Rugbyman

p.s. never mind those creeps

MadsL · 24-10-2012 09:31PM

UCDVet wrote: »

The idea isn't that the Irish bank couldn't follow you; it's that other countries have different legal systems regarding debt. It doesn't matter if I owe Bank of Ireland 500k euro - what matters is what Bank of Ireland can legally do to me, to get that money bank.

This is a US website and the laws in the US can vary from state-to-state; regardless there are at least some cases where declaring bankruptcy in the US will wipe out forgein debt, in the eyes of the US government.
http://www.lawqa.com/qa/does-bankruptcy-erase-foreign-debts

Again - if you live in the US and the US legal system says you don't owe money to some Irish bank - there is little the Irish bank can do to extract those funds from you. You could have millions in a US bank account and they couldn't touch it, at least in theory.

Obviously, you'd want to research this and select the best country/state/providence/whatever for your purposes.

Wow the Irish are good at screwing the Irish. Let's give the OP advice to really effectively saddle everyone else with the debt.

(UCDVet - I know you are not Irish)

OU812 · 24-10-2012 09:41PM

I think that's one of the most sensible things I've ever read on boards regarding this situation. Well said.

funkhouser wrote: »

In any sane and functioning society debt like this, which has no chance of being repaid and should never have been lent in the first place, would be written down and the house sold or used by the bank for maximum return.

People who say "tough but you should remain in debt slavery and have no life ever again, you borrowed it so pay it back" (yawn) are extremely ignorant.

Incurring debt is a two way arrangement and a bank's profit is partially a return on the risk they have taken in lending the money. If I lend a car salesman on 45k a year 500,000 euro to build a house and sell it for profit, going against all previous banking norms, I've taken on a lot more risk than I should have. After it goes belly up; property market or car market crashes or he becomes terrible at selling cars and ends up in a job on 30k a year I wouldn't expect anybody to tell me: "tell him it's all HIS fault, he should live in one room, rent out all the other rooms and should give all his money to the bank for the rest of his working life". The law shouldn't. Society shouldn't. Creeps on internet message boards shouldn't. But they mostly do.

Both parties should take a hit. The more risk a bank takes the bigger hit it should take. Yes, we now own the banks and there are loads of extremely greedy people who won't now pay mortgages just 'cos but a general principle "when the borrower is clearly in great difficulty and the lending was reckless the bank should shoulder a lot of the burden, morally and financially" should really start being recognised by everyone. We'll still be in this situation as a country in 20 years if we don't.

People with impossible debt burdens are not criminals of a lower caste and should not be forced into life long debt slavery.

Nulty · 24-10-2012 09:42PM

humanji wrote: »

Are you averse to faking your own death?

Great suggestion from the mod of Conspiracy Theories

steve9859 · 24-10-2012 09:46PM

MadsL wrote: »

Wow the Irish are good at screwing the Irish. Let's give the OP advice to really effectively saddle everyone else with the debt.

(UCDVet - I know you are not Irish)

As much as I'd like too see everyone stand behind their obligations, you've also got too look after number one. Do you think the Irish state will reward the OP for being a hero?

If I were the OP, I'd certainly be exploring my options on the other side of the world

UCDVet · 24-10-2012 09:58PM

MadsL wrote: »

Wow the Irish are good at screwing the Irish. Let's give the OP advice to really effectively saddle everyone else with the debt.

(UCDVet - I know you are not Irish)

Even if I were Irish - it wouldn't change my opinion.

Lawmakers and elected officials should be fair, impartial and act in the best interest of the country/the public.

Individuals should act in their own best interest, in accordance with the law.

When it's time to pay income taxes - the 'system' should be setup in a fair way. As an individual who has to pay taxes - I can't expect someone not to claim a tax credit the system says they are entitled to.

If a person has the option/ability to live in multiple countries - they'd be a fool not to select the one that they feel is in their best interest. That means weighing the pro's and con's of the legal system/debt system and everything else.

Other countries have bankruptcy laws to protect individuals from exactly the situation the OP is faced with. The disadvantage to having these systems is (in theory) tighter conditions for getting loans and less favorable rates; because the lenders are assuming greater risk. In practice, I rarely see that, to be perfectly honest.

downpatrick · 24-10-2012 09:58PM

Choose life alright. Lots of people saying can't hand in the keys etc. Course you can. You can just go bankrupt either here, or if you want to wait less time for it to be expunged, just go live in the UK for a year and then declare bankruptcy over there. 3-4 years down the road it's like it never happened. Same as Ivan Yates. Not so bad, you made a mistake, doesn't mean you'll be punished for the rest of your life.

The sooner you do it though, the sooner you can start again. Best to face up to it and accept the loss.

Good luck with it

Pottler · 24-10-2012 09:59PM

I'd be gone, simple as. I'd register as Mr Potler in some far flung place and start over. Mistakes often happen on official forms, I'd be making one of those mistakes. Would I stay and pay? No, I honestly wouldn't, life is too short and when your dead you'll not hear the whinging..

Choose paying back Mortgage or Choose Life?

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