Personal Insolvency Act - Debt Forgiveness, or a Political Fudge? "Talk to Your Banks" Says Gilmore

[C. Flower]

Government proposals published today for reform of insolvency / bankruptcy law.

Here they are

http://www.justice.ie/en/JELR/20120125-PersonalInsolvencyBill.pdf/Files/20120125-PersonalInsolvencyBill.pdf

This is one of the measures required by the terms of the EU/IMF Bailout. The reform has been painfully slow in coming.

There will now be a period of date, consulation and lobbying before the Bill goes to the Dail for a vote at the beginning of March.

The Bill, for amounts over €20,000, seems to allow for voluntary arrangements. While that kind of thing may have worked out for Charlie Haughey and Garret Fitzgerald, I doubt that the ordinary mortgage holder would get the same treatment.



The Minister said that the proposals for the reform of personal insolvency law will involve the introduction of the following new non-judicial debt settlement systems, subject to relevant conditions in each case:
· A Debt Relief Certificate to allow for the full write-off of qualifying unsecured debt up to €20,000, after a one-year moratorium period;
· a Debt Settlement Arrangement for the agreed settlement of unsecured debt of €20,001 and over;
· a Personal Insolvency Arrangement for the agreed settlement of both secured and unsecured debt of €20,001 and over.



Further, voluntary, measures for dealing with mortgage debt are also being prepared, according to Alan Shatter.

Given that Ireland has the highest average level of personal debt in the world, and the high and increasing level of mortgage arrears, legislation is urgently needed.

Whether or not the banks and credit unions will be able to withstand the amount of defaults on personal debt remains to be seen.



Minister for Finance Michael Noonan and Minister for Justice Alan Shatter unveiled the Personal Insolvency Bill today, under which debtors will be allowed to emerge from bankruptcy after three years rather than the current 12.
The proposed Bill also includes new voluntary non-judicial debt settlement systems aimed at providing alternatives to formal court insolvency, such as the introduction of a personal insolvency arrangement for the agreed settlement of both unsecured and secured debt of more than €20,000.



http://www.irishtimes.com/newspaper/breaking/2012/0125/breaking18.html?cmpid=lunchtime-digest&utm_source=lunchtime-digest&utm_medium=email

Shatter is emphasising that the draft Bill is open for consulation and amendment.




The Tánaiste Eamon Gilmore T.D., has welcomed the publication of the Scheme of the Personal Insolvency Bill by the Minister for Justice Alan Shatter and Minister for Finance Michael Noonan.

“This is about giving people a fair deal and a fresh start in dealing with their debts. It will also form a central element in resolving the problem of mortgage arrears as highlighted in the Keane Report on Mortgage Arrears.

“When enacted, this legislation will strengthen the hand of distressed borrowers and mortgage holders in dealing with the banks as they may have the option to settle their debts without going bankrupt and if they do, they could be discharged after a three instead of an onerous 12 year term.

“I would encourage people to talk to their banks about how they should best work through their debts as the emphasis of this legislation is on workable solutions that give people space and a realistic way of managing their debt.

“This will help the Government achieve its objective of keeping distressed mortgage holders in their home during this crisis, in so far as it is practicably possible. This also gives lenders certainty about the Government’s direction in that it is in their interest to start reaching voluntary and realistic solutions with borrowers now, rather than face losing their security through a borrower’s bankruptcy down the road.

“Alone, this legislation is not the solution to the country’s mortgage arrears problems, but it does form a crucial part of it.”

[Ephilant]

This article appeared today in our (english Language) natioanl newspaper Ekathimerini:
"In what could turn out to be a significant ruling for Greeks suffering from the economic crisis, a court in Hania, Crete, has become the first in the country to order that the majority of the debt owed to banks by someone still in full employment be wiped out.

Sunday’s Kathimerini understands that the Justice of the Peace Court in Hania based its decision on a 2010 law that allows judges to give protection to people struggling to meet their financial commitments. Until now, the legislation has only been used to give debt relief to unemployed people or those with no substantial income.

However, in the Hania case, the court ruled in favor of a full-time civil servant. The divorced woman, who has three children, asked to be given protection after her banks refused to offer her new terms for combined loans of 112,000 euros. The unnamed woman explained that she did not have any assets she could sell to pay off her debt.

In its ruling, the court deemed that the woman, who has moved in with her parents, needs 350 euros a month to cover her own costs but that the rest of her earnings could be distributed equally among the three banks she owes money to. The judge deemed that this process should last for four years, meaning the woman would pay back some 30,000 euros and the remaining 82,000 would be written off.

Thousands of people have already appealed to the courts for protection under the 2010 law but legal experts believe the decision in Hania may lead to a new wave of appeals by Greeks who still have jobs but are unable to repay their loans."

Over to you Minister Shatter.....

[C. Flower]

This article appeared today in our (english Language) natioanl newspaper Ekathimerini:
"In what could turn out to be a significant ruling for Greeks suffering from the economic crisis, a court in Hania, Crete, has become the first in the country to order that the majority of the debt owed to banks by someone still in full employment be wiped out.

Sunday’s Kathimerini understands that the Justice of the Peace Court in Hania based its decision on a 2010 law that allows judges to give protection to people struggling to meet their financial commitments. Until now, the legislation has only been used to give debt relief to unemployed people or those with no substantial income.

However, in the Hania case, the court ruled in favor of a full-time civil servant. The divorced woman, who has three children, asked to be given protection after her banks refused to offer her new terms for combined loans of 112,000 euros. The unnamed woman explained that she did not have any assets she could sell to pay off her debt.

In its ruling, the court deemed that the woman, who has moved in with her parents, needs 350 euros a month to cover her own costs but that the rest of her earnings could be distributed equally among the three banks she owes money to. The judge deemed that this process should last for four years, meaning the woman would pay back some 30,000 euros and the remaining 82,000 would be written off.

Thousands of people have already appealed to the courts for protection under the 2010 law but legal experts believe the decision in Hania may lead to a new wave of appeals by Greeks who still have jobs but are unable to repay their loans."

Over to you Minister Shatter.....

Welcome. Ephilant, and thanks for that informative post.

The Insolvency Act, unfortunately, is based on entirely voluntary agreements with the banks. If it was enforceable, the consequences to the banks could be calculated, and their insolvency revealed earlier than will otherwise be the case.

[Ephilant]

Welcome. Ephilant, and thanks for that informative post.

The Insolvency Act, unfortunately, is based on entirely voluntary agreements with the banks. If it was enforceable, the consequences to the banks could be calculated, and their insolvency revealed earlier than will otherwise be the case.

Isn't it just a shame that the whole Irish bank guarantee scheme was forced down the throats of the Irish people instead of put on "an entirely voluntary" basis, like the Insolvency Act. What's good for the goose is not necessarily good for the gander it would seem..

[C. Flower]

Isn't it just a shame that the whole Irish bank guarantee scheme was forced down the throats of the Irish people instead of put on "an entirely voluntary" basis, like the Insolvency Act. What's good for the goose is not necessarily good for the gander it would seem..

:) Very true!

[morticia]

TBH, given the likely extent of the problem, the banks will eventually have to start playing ball. The real question will be how long it takes for the penny to drop with their various HQs.

I'd be more optimistic about recapitalisations, or at least, keeping the banks afloat. Signor Draghi seems to be quite good at providing them with emergency liquidity at low interest rates so they can buy nice profitable sovereign bonds at high interest rates. Could restore a few profit margins.....or, if not, the whole EU will have to be declared bankrupt anyway. Mwaahahahaha.....

[PaddyJoe]

Ireland is going to waiting until 2013 for this Insolvency Act, it seems. In January Alan Shatter said the Bill would be finalised and ready by the end of April and said he hoped it would become law in the autumn.

A MAJOR piece of legislation aimed at tackling the State’s personal debt crisis is facing delays of at least two months, The Irish Times has learned.

The banking industry has furiously contested the inclusion of mortgage debt in the legislation and warned of dire consequences for the sector if people who can’t service their debts are allowed to get write-downs on their mortgages.
The Government also suggested the insolvency arrangements would be voluntary and under the plans, as outlined, major creditors would be able to veto all proposals without any appeals or review process for debtors.


Prof Jason Kilborn of the John Marshall Law School in Chicago and a leading insolvency expert said the proposed legislation was deeply flawed.
He said it contained “a series of half-measures” which would see it founder because banks were being handed too much power and not being incentivised to deal meaningfully with debt-ridden consumers, he said.

And of course there's still no sign of that house price database which Shatter appears to be sitting on as well.
Curious that the TD with the largest property portfolio in the Dail ends up dealing with these issues.

http://www.irishtimes.com/newspaper/finance/2012/0426/1224315193933.html

[Slim Buddha]

“I would encourage people to talk to their banks about how they should best work through their debts" - Eamon Gilmore


Talk to the hand, Eamon!

[DCon]

“I would encourage people to talk to their banks about how they should best work through their debts" - Eamon Gilmore




Unless they are in NAMA. Then the State will do all the work, pay them for the privilege and spend a small fortune in the process

[C. Flower]

Programme on debt relief last night. Ireland has the most unforgiving debt law in Europe.

What we need to face is that much of this private debt is not repayable, and that debt forgiveness of the required scale would "bring down the banks."

No signs of any reality from any party.

[Slim Buddha]

Programme on debt relief last night. Ireland has the most unforgiving debt law in Europe.

What we need to face is that much of this private debt is not repayable, and that debt forgiveness of the required scale would "bring down the banks."

No signs of any reality from any party.

These morons will have to face reality soon. The number of defaulting mortgages is rising daily. And before this year is out, I am hoping we get to the point where the level of default is "unsustainable".

[C. Flower]

These morons will have to face reality soon. The number of defaulting mortgages is rising daily. And before this year is out, I am hoping we get to the point where the level of default is "unsustainable".

Either we are going to see this country reduced to beggary, with a few fat gauleiters continuing to strut about immune to all ill effects, or we will have to organise things in a radically different way to house, feed and provide education and health services to people, as of right.

[Slim Buddha]

Either we are going to see this country reduced to beggary, with a few fat gauleiters continuing to strut about immune to all ill effects, or we will have to organise things in a radically different way to house, feed and provide education and health services to people, as of right.

It is becoming increasingly clear that the struggle is one of Banks v People and the government, the Dail and what loosely be termed as the Establishment in Ireland, and elsewhere for that matter, is on the side of the Banks.

It seems to be shaping up to be as simple as that and the question is fast becoming one of "Which do I want to see destroyed?"

[disability student]

The 'bad' level of mortgages are contributing to the shrinkage of bank's assets in the balance sheet as their liabilities would increase. Hence another stress tests or more of the same re recapitalisation to balance out.

Also they would stop or cease giving business loans to SME or any other business.

Hence a very pressing need or urgent need for a 'new' bank to be set up here.

[Slim Buddha]

The 'bad' level of mortgages are contributing to the shrinkage of bank's assets in the balance sheet as their liabilities would increase. Hence another stress tests or more of the same re recapitalisation to balance out.

Also they would stop or cease giving business loans to SME or any other business.

Hence a very pressing need or urgent need for a 'new' bank to be set up here.

We do not need Irish banks. New Zealand has no "New Zealand" banks and manages just fine without them. ANZ, which I understand to be the biggest in the New Zealand market, is controlled from Australia.

So while I agree there is an urgent need for a "new" bank in Ireland, there is also a need to kill off AIB and BOI, as a matter of urgency.

[C. Flower]

Kenny and Gilmore are giving a press conference at the moment on Government proposals on mortgage difficulties.

One element is a mortgage advice agency, modelled on MABS.

Kenny says "Banks must respond to the Keane Report"

"The banks are sufficiently recapitalised to deal with the Insolvency Act"

"We don't want to introduce a facility here for an easy option" - Under some circumstances, bankruptcy within 3 years, under the Act.

[PaddyJoe]

Stephen Donnelly claims that the banks have briefed on the legislation before the Dail:

This government promised a “democratic revolution”. The reality has been that key economic documents are released to the Bundestag before the Dáil, and briefings on the insolvency legislation are given to the banks before the people’s representatives.

Yesterday, the Government held a press conference to announce it would be publishing the Personal Insolvency Bill on Friday, and then refused to answer questions on the content of the Bill. After that, they sat down with the bankers, showed them the Bill, and answered all their questions.

I have been contacted by constituents anxious to know what the legislation will mean for them. I’ve had to say that, even though the banks are fully briefed on the legislation, I will have no information till Friday.
http://www.stephendonnelly.ie/featured/insolvency-bill-the-governments-briefing-of-bankers-before-the-dail-press-or-public-is-a-disgrace/

[C. Flower]

Stephen Donnelly claims that the banks have briefed on the legislation before the Dail:

http://www.stephendonnelly.ie/featured/insolvency-bill-the-governments-briefing-of-bankers-before-the-dail-press-or-public-is-a-disgrace/

I think I posted briefly on this yesterday. If you listen to the press conference (Merrion Street site) you will hear Enda Kenny say he was going to meet the banks and I think said ask them what they would do....

The real question is, what legislation?

The Department of Social Protection (??) has just cut the mortgage interest allowance for lower income families reportedly "to put pressure on the banks to talk to them."

So families are thrown into default, stress, misery and possible hunger, or homelessness, on the off chance that this might tweak the heartstrings of the insolvent banks and persuade them to be charitable???????

[fluffybiscuits]

Just been reading this morning on the journal about the idea to help people with mortgages. They sell their houses to the housing associations, places such as Cluid and in return the housing associations will rent these properties back to the families at a reduced rate. The properties have to be sold though at the market rates and the banks take the difference in debt write off. Would such a scheme work? It could in the long run perhaps but then again families hitting hard times could be thrown out on their ears should they fail to pay their rents. Anyone have any thoughts?

[C. Flower]

Just been reading this morning on the journal about the idea to help people with mortgages. They sell their houses to the housing associations, places such as Cluid and in return the housing associations will rent these properties back to the families at a reduced rate. The properties have to be sold though at the market rates and the banks take the difference in debt write off. Would such a scheme work? It could in the long run perhaps but then again families hitting hard times could be thrown out on their ears should they fail to pay their rents. Anyone have any thoughts?

Government is bringing in a rent to un-buy scheme. For people who don't want to move, it may be a good option and much cheaper than buying.

[C. Flower]

The Bill has been published.

http://www.oireachtas.ie/viewdoc.asp?DocID=21417&&CatID=59

Mortgage "decision-tree" here.

http://www.justice.ie/en/JELR/Pages/PB12000197

Minister Shatter's statement:

http://www.oireachtas.ie/viewdoc.asp?DocID=21417&&CatID=59

[Dr. FIVE]

Did I just hear right that up to 3 million can be written off?

Absolute piss take and depressingly as expected if true.

[C. Flower]

Attorney General says that every deal has to go through the Circuit Court as it will be a loss to the bank.

Plenty of jobs for the boys and girls so.

[Dr. FIVE]

Of course,

The whole is open to trophy houses and all the speculators now. Was never going to be any other way was it?
Where would we get the figures on a breakdown on mortgages. The amount of people who bought family homes as opposed to those who got up themselves buying investment properties

[C. Flower]

Of course,

The whole is open to trophy houses and all the speculators now. Was never going to be any other way was it?
Where would we get the figures on a breakdown on mortgages. The amount of people who bought family homes as opposed to those who got up themselves buying investment properties

Confidential deals between pals in the back rooms of banks ?
It is deeply corrupt. It's harsh on people who are humiliated by their financial troubles, but the only fair thing is for every case to be public.

But not, please, a feed for the leeches of the legal profession.

[C. Flower]

Namawinelake has summarised some of the main issues about the Bill (quick work :))


Firstly, the person seeking bankruptcy must be able to demonstrate that they will not be able to pay their debts over a five-year period. According to the Bill “it is his or her opinion there is no likelihood of the debtor becoming solvent within the period of 5 years commencing on the date of the making of the declaration” So if you are a mortgage-borrower with six months of arrears today and a property which has declined 50% from peak, on what basis can you demonstrate that you will not be able to become solvent in five years. Obviously, it will depend on the future direction of house prices and there is no guidance given in the legislation as to how future asset prices might be determined.

Secondly, the person seeking bankruptcy must be able to demonstrate that they have co-operated with their mortgage lender for a period of at least six months and that they have not agreed to any alternative arrangement. The Bill says “the debtor has made a statutory declaration declaring that he or she has co-operated for a period of at least 6 months with his or her creditors who are secured creditors as respects the debtor’s principal private residence in accordance with any process relating to mortgage arrears operated by the secured creditors concerned which has been approved or required by the Central Bank of Ireland and which process relates to the secured debt concerned and that notwithstanding such co-operation the debtor has not been able to agree an alternative repayment arrangement with the secured creditor concerned, or that the secured creditor has confirmed to the debtor in writing its unwillingness to enter into an alternative repayment arrangement”

In other words, notwithstanding the fact that you are hopelessly insolvent with massive negative equity, your bank can seemingly stop your bankruptcy bid by providing you with temporary relief on your monthly mortgage commitments.


But only if you agree to it.

http://namawinelake.wordpress.com/2012/06/30/very-few-bankruptcy-tourists-expected-here-as-ireland-fluffs-new-personal-insolvency-legislation/

It certainly looks as though it won't be a straightforward walk through for everyone who can't pay their mortgage and seeks bankruptcy.

[PaddyJoe]

AIB isn't going to worry too much about silly insolvency legislation. An internal memo quoted in the Irish Examiner today says that our nationalised pillar bank has no intention of writing off any mortgage debt;)

AIB will not write down any mortgage debt as part of its plans to tackle arrears, an internal memo has revealed.
The bank outlined four specific schemes which it is to roll out for existing primary residential mortgage customers, according to head of mortgages Jim O’Keeffe.

Following publication of the Personal Insolvency Bill, there had been hope that mortgage holders in negative equity would be able to write off some of their debts by cutting deals with banks by threatening to file for bankruptcy. However, director of the Free Legal Advice Centre Noeline Blackwell said she was not surprised AIB was not offering a writedown on mortgage debt.

The concern for Flac is, if a bank owns 65% of a person’s debt, they can block them from pursuing personal insolvency arrangements.
http://www.irishexaminer.com/ireland/aib-will-not-offer-writedown-on-mortgage-debt-says-internal-memo-199723.html

[Baron von Biffo]

AIB isn't going to worry too much about silly insolvency legislation. An internal memo quoted in the Irish Examiner today says that our nationalised pillar bank has no intention of writing off any mortgage debt;)


http://www.irishexaminer.com/ireland/aib-will-not-offer-writedown-on-mortgage-debt-says-internal-memo-199723.html

As a taxpayer, and thus one who will ultimately pay for written down mortgage debt, I see this as a positive.

[PaddyJoe]

As a taxpayer, and thus one who will ultimately pay for written down mortgage debt, I see this as a positive.

You have a point. Unfortunately we're already paying for the 50% plus write downs that hundreds of politically connected developers have received.
It's instructive once again to see who's really running the show in spite of Kenny and Gilmore spinning the Insolvency Bill as a radical measure which will solve all our mortgage ills.

[Baron von Biffo]

You have a point. Unfortunately we're already paying for the 50% plus write downs that hundreds of politically connected developers have received.
It's instructive once again to see who's really running the show in spite of Kenny and Gilmore spinning the Insolvency Bill as a radical measure which will solve all our mortgage ills.

Isn't it the case that NAMA bought the loans at a discount from the banks but the developers are still liable for the full amounts? In theory (and I'm as sceptical as the next man) NAMA could make a profit for the taxpayer.

Mortgage write down is just a black hole that would swallow taxes with no return to the taxpayer.

[PaddyJoe]

Shatter is being lobbied on engagement rings and cars:

The Coalition parties clashed when the Personal Insolvency Bill became the first piece of legislation to return to the Oireachtas for discussion this morning.

Mr Shatter told the Justice Committee that some "lucky recipients" of very expensive engagement rings had shown off their jewellery in the society pages of Sunday newspapers during the boom times.


Meanwhile, Mr Shatter indicated he would consider increasing the value of a car that can be retained by debtors from the planned limit of €1,200.

Fine Gael TD Michael Creed argued the value was "excessively low". Self-employed people often used vans for their work and the vehicles were required to be road-worthy.
http://www.irishtimes.com/newspaper/breaking/2012/0913/breaking37.html

[C. Flower]

Shatter is being lobbied on engagement rings and cars:


http://www.irishtimes.com/newspaper/breaking/2012/0913/breaking37.html


The Act seems to be a complete turkey.

[C. Flower]

A good article in the Indo.

Only those in debt 3 million or more can avail of the new Irish law, which is still much more onerous than British law.

It seems that people are going to the UK, getting a job, and going bankrupt to shake off unrepayable mortgages. The article gives advice on how to do it.

http://www.independent.ie/opinion/analysis/ronald-quinlan-bankruptcy-in-uk-not-just-for-rich-and-famous-3343320.html

[PaddyJoe]

The EC is concerned that the new insolvency regime will be overloaded by the bigger debtors:

Bigger debtors with personal borrowings of up to €3m, mostly linked to property deals, could take so long to assess that ordinary households are pushed to the back of the queue, according to an initial draft of a report due to be published on January 23.
http://tinyurl.com/bzxql7w

Only fair, surely? High net worth individuals always have first call on the lifeboats;)

[DCon]

The EC is concerned that the new insolvency regime will be overloaded by the bigger debtors:

http://tinyurl.com/bzxql7w

Only fair, surely? High net worth individuals always have first call on the lifeboats;)

The ones who sponsored FF are already back on dry land. The good lifeboat NAMA rescued them a long time ago

[fluffybiscuits]

http://www.rte.ie/news/2013/0327/378599-childcare/

Kenny has had to come out and tell the media that people,women especially, would not be forced to give up work if they find that childcare costs are excessive and affect a mortgage. This was after Varadker put his foot in it and said that childcare costs would have to be taken into account for dealing with insolvency arrangements. Why the government didnt tackle the excessive cost of childcare in the first place is beyond me then Varadker wouldnt have to go shooting his mouth off with his inane bullshit. The National Womens Council have rightly condemned the remarks.

[C. Flower]

The much leaked supposed terms of debt write down are an appalling piece of bullying of people who are in a desperate position. Everyone should be able to use budget for themselves and make their own choices.

All that needs to be done is to set an amount that people can live on - and that is already done through the social security/welfare system - plus what is needed to keep them in work if they are employed - child care and transport/car.

What is the mystery ?

Why should someone who needs a bailout to keep a private asset be on a higher income than a person in a rented property, who does not get to keep an asset ?

They should also have the option, as in the US, of giving back the keys and walking away without a debt. That might make the banks a little more careful about overlending.

... But at the end of the day, the discussion is academic. Nothing sensible will be done, and the system will continue to heap woe and misery on people until it breaks and is done away with.

[fluffybiscuits]

The much leaked supposed terms of debt write down are an appalling piece of bullying of people who are in a desperate position. Everyone should be able to use budget for themselves and make their own choices.

All that needs to be done is to set an amount that people can live on - and that is already done through the social security/welfare system - plus what is needed to keep them in work if they are employed - child care and transport/car.

What is the mystery ?

Why should someone who needs a bailout to keep a private asset be on a higher income than a person in a rented property, who does not get to keep an asset ?

They should also have the option, as in the US, of giving back the keys and walking away without a debt. That might make the banks a little more careful about overlending.

... But at the end of the day, the discussion is academic. Nothing sensible will be done, and the system will continue to heap woe and misery on people until it breaks and is done away with.

That is one of the only things in terms of US economic approaches that I think we should use here. The house is collateral against the mortgage, if it does not work out then the house can be given back to the bank and the loan forgiven as the house has been returned. Common sense would never take over of course in the Irish banking system,that wouldnt work in favour of capitalists lording it over the working class here.

[C. Flower]

http://podcastireland-irishblog.blogspot.ie/2013/03/truthful-irish-talks-with-tom-darcy.html

Interview with Tom Darcy who lost his house.

[Baron von Biffo]

They should also have the option, as in the US, of giving back the keys and walking away without a debt. That might make the banks a little more careful about overlending.

In the US both parties know in advance that the mortgage is non-recourse. It would be lunacy to attempt to retrospectively impose non-recourse terms on existing mortgages here.

[ang]

A single Adult is to be allowed €31 per month towards medical costs, a public transport allowance of €100 per month according to the guidelines in the new personal insolvency bill -


Single adults will be allowed only €31 a month to cover health costs — including GP visits, prescriptions, and dental care


A public transport allowance of €136 a month will be allowed for people forced to get rid of a car

http://www.irishexaminer.com/ireland/kenny-dismisses-5-food-rations-concerns-227004.html#.UVnXAefa9Wk.twitter

[ang]

Welcome to Ireland, Where Mortgage Payments Are Optional and the Banks Are a Mess

http://cdn.theatlantic.com/static/mt/assets/business/assets_c/2013/04/Quartz_Ireland_Chart1-thumb-570x468-117649.png

http://www.theatlantic.com/business/archive/2013/04/welcome-to-ireland-where-mortgage-payments-are-optional-and-the-banks-are-a-mess/274566/

[The Moth]

The Act seems to be a complete turkey.

Call me cynical but there will be very few people entering into these voluntary agreements with the bank and those who do will be related to a politician , county councillor, senior civil servant, Arthur Cox, KPMG etc partner so I don't think we should waste too much time worrying about the detail of the bill. The ordinary or unconnected person with a mortgage and negative equity should consider the U.K. option.

[Baron von Biffo]

Welcome to Ireland, Where Mortgage Payments Are Optional and the Banks Are a Mess

http://cdn.theatlantic.com/static/mt/assets/business/assets_c/2013/04/Quartz_Ireland_Chart1-thumb-570x468-117649.png

http://www.theatlantic.com/business/archive/2013/04/welcome-to-ireland-where-mortgage-payments-are-optional-and-the-banks-are-a-mess/274566/

Would it be accurate to say that none of the other countries have sizeable lobbies looking to foist mortgage debts on the taxpayer?

[ang]

Would it be accurate to say that none of the other countries have sizeable lobbies looking to foist mortgage debts on the taxpayer?

It may not be inaccurate Baron :)

[Baron von Biffo]

It may not be inaccurate Baron :)

See what happens when you put a Jesuit in the Vatican. :)

[Slim Buddha]

After this abject, miserable, pathetic disgrace of an Act is passed by the donkeys in the Dail, anyone who is in Ireland and can leave should leave and get the hell away from the place asap. Especially if you have a property under water with no hope of ever getting clear of the mess, a one-way ticket to anywhere is a must. As Gilmore said "Talk to your banks" So call Boucher from the airport and tell him "Sorry Richie but it looks like you'll be taking a hit on this one!", and be the Phuqor, making Richie the Phuqee for a change. Do I hear "moral hazard" from anyone?

[Baron von Biffo]

After this abject, miserable, pathetic disgrace of an Act is passed by the donkeys in the Dail, anyone who is in Ireland and can leave should leave and get the hell away from the place asap. Especially if you have a property under water with no hope of ever getting clear of the mess, a one-way ticket to anywhere is a must. As Gilmore said "Talk to your banks" So call Boucher from the airport and tell him "Sorry Richie but it looks like you'll be taking a hit on this one!", and be the Phuqor, making Richie the Phuqee for a change. Do I hear "moral hazard" from anyone?

Chalk one up for Tayto.

Oh Slim the Toblerones wouldn't like that sort of thinking. They don't go in much for people stinging the taxpayer with their personal debts.

Despite all you're a Paddy to the marrow. :D

[fluffybiscuits]

http://www.thejournal.ie/pic-how-much-youre-allowed-to-spend-under-new-insolvency-rules-875254-Apr2013/


The service says the limits are intended to give people the discretion to still spend their money as they see fit, “though necessarily within the constraints of reasonableness and the overall expenditure limits”.

[Slim Buddha]

Chalk one up for Tayto.

Oh Slim the Toblerones wouldn't like that sort of thinking. They don't go in much for people stinging the taxpayer with their personal debts.

Despite all you're a Paddy to the marrow. :D

THe Swiss don't put people in power to slavishly serve insolvent banks, as the UBS experience here in Switzerland showed. When they went looking for a taxpayer bailout, they were politely told that it wasn't possible. Eventually, they got their sorry ass saved with a loan from the Swiss National Bank, with a time limit to pay it back with interest. Which, given they charge their customers interest, was only right and proper.

If I was a Paddy to the marrow, I would be bending over for the likes of Boucher. But I'm not!

[random new yorker]

They should also have the option, as in the US, of giving back the keys and walking away without a debt. That might make the banks a little more careful about overlending.




Correct...

wow

reading above is a little scary, your laws are odd (or, you may say ..irish..)

[Spectabilis]

The new guidelines are here. Scary reading especially in the allowances given in the tables for reasonable expenses. http://www.isi.gov.ie/en/ISI/Pages/WP12000009

[Slim Buddha]

Correct...

wow

reading above is a little scary, your laws are odd (or, you may say ..irish..)

Not necessarily "Irish" but definitely nasty, malevolent,vindictive and wholly on the side of the insolvent, bankrupt and utterly useless banks which the previous regime foisted on the Irish taxpayer instead of killing off as those banks should have been.

[random new yorker]

Not necessarily "Irish" but definitely nasty, malevolent,vindictive and wholly on the side of the insolvent, bankrupt and utterly useless banks which the previous regime foisted on the Irish taxpayer instead of killing off as those banks should have been.

there's just too much i dont understand to add anything here that could be of any help...

do you have an equivalent of our Fannie Mae/ Freddie Mac?

Shame Count isnt around he would know the answer to some of my questions...its a bit hard without having his bridging my understanding of how things work there compared to the US

[Slim Buddha]

No we do not. We have NAMA but that is a politically toxic, carefully constructed bailout mechanism for the property speculators, developers and other cowboys in the property/scam business who are one of the "three legs of corruption" who have us in this mess, the other two being the banks and the previous government (this government is turning out to be just as bad)

LIke the USA, Ireland inherited the sack of rubbish called "common law" from our former British overlords. Unlike the US, we never even got started with reforming any of this fetid legal stew to try and make it work for a modern independent republic. Instead, we have an archaic, pre-Victorian legal construct which is cumbersome, unwieldy, arcane and very expensive if you are unfortunate enough to have to use it. The tweaks we made to certain laws seem to have the effect of favouring vested interests. And the banks are very much a vested interest in Ireland. They will follow you until the end of time and into the pits of Hell to get their pound of flesh. And the law fully facilitates this.

[The Moth]

Mary Wilson had one of the PIPs (Property Solvency Specialist) on Drivetime. He said that they would be paid at the Lowest end €4 thousand !!! and that there is a big rush from lawyers, accountants and mortgage brokers to do the 3 day training course. Debtors must use a PIP and they are preferred creditors. The whole thing sounds just laughable if it was not so sad. This government never fails to disappoint.

[random new yorker]

LIke the USA, Ireland inherited the sack of rubbish called "common law" from our former British overlords. Unlike the US, we never even got started with reforming any of this fetid legal stew to try and make it work for a modern independent republic. Instead, we have an archaic, pre-Victorian legal construct which is cumbersome, unwieldy, arcane and very expensive if you are unfortunate enough to have to use it. The tweaks we made to certain laws seem to have the effect of favouring vested interests. And the banks are very much a vested interest in Ireland. They will follow you until the end of time and into the pits of Hell to get their pound of flesh. And the law fully facilitates this.

oh..i see .. the other day i read a quote in some stranger's FB page that i found interesting: "The Law is like yogurt, if you don't make it yourself it should have an expiration date."

I would simply remove "if you dont make it yourself" ...

Laws should come with an expiration date. Period.

When people flaunt the "But, But, It Is the Law" to justify all kinds of idiocy... i have a tendency to reply... But, But, Who made the law? some monkey - 200 years ago? so, lets not discuss other books of laws drafted ~2000 years ago..

Or, Laws are made to be changed?

[Baron von Biffo]

THe Swiss don't put people in power to slavishly serve insolvent banks, as the UBS experience here in Switzerland showed. When they went looking for a taxpayer bailout, they were politely told that it wasn't possible. Eventually, they got their sorry ass saved with a loan from the Swiss National Bank, with a time limit to pay it back with interest. Which, given they charge their customers interest, was only right and proper.

If I was a Paddy to the marrow, I would be bending over for the likes of Boucher. But I'm not!

:confused:

You praise the Swiss for not socialising private debt but you castigate the Irish for not socialising private debt. Can you see a teensy bit of inconsistency there?

[Baron von Biffo]

oh..i see ..

Prudence demands exercising a degree of caution when reading opinions on the internet. It's not universally true that a passionately expressed opinion is one that's based on a sound understanding of the issues.

;)

[Slim Buddha]

:confused:

You praise the Swiss for not socialising private debt but you castigate the Irish for not socialising private debt. Can you see a teensy bit of inconsistency there?

The Swiss did not bend over for the banks. They told them there was NO bailout. There was a LOAN to be paid back with interest. That is the huge and defining difference. No inconsistency.

[Slim Buddha]

oh..i see .. the other day i read a quote in some stranger's FB page that i found interesting: "The Law is like yogurt, if you don't make it yourself it should have an expiration date."

I would simply remove "if you dont make it yourself" ...

Laws should come with an expiration date. Period.

When people flaunt the "But, But, It Is the Law" to justify all kinds of idiocy... i have a tendency to reply... But, But, Who made the law? some monkey - 200 years ago? so, lets not discuss other books of laws drafted ~2000 years ago..

Or, Laws are made to be changed?

A helpful exercise when assessing the shambles of the Irish Legal System is to ask, as our learned friends would doubtless say, "Qui bono?" because it always benefits somebody, usually a vested interest. Oh, and you will always find people in Ireland who will defend the status quo. Evidence of Stockholm Syndrome, if you ask me.

[random new yorker]

Prudence demands exercising a degree of caution when reading opinions on the internet. It's not universally true that a passionately expressed opinion is one that's based on a sound understanding of the issues.

;)

wanna break that down for me??

indeed i try to exercise a certain degree of caution when reading opinions on the internet which by the way are no different to me than hearing them live...

so, if you're trying to say something...well. Say it.

[Baron von Biffo]

The Swiss did not bend over for the banks. They told them there was NO bailout. There was a LOAN to be paid back with interest. That is the huge and defining difference. No inconsistency.

Your earlier post is a moan about the taxpayer not taking on private mortgage debt and an encouragement to people to leave the country and sting the taxpayer.

Along side your praise of the Swiss for not lumping private debt onto the taxpayer that's a huge inconsistency.

[Slim Buddha]

Your earlier post is a moan about the taxpayer not taking on private mortgage debt and an encouragement to people to leave the country and sting the taxpayer.

Along side your praise of the Swiss for not lumping private debt onto the taxpayer that's a huge inconsistency.

I am talking about banks. Banks are destroying the Irish economy with the aid of spineless politicians. Irish taxpayers are paying for a massive bailout of banks after those banks ran up massive debts through ineptitude, incompetence and hubris. That did not happen in Switzerland. You are, as usual, muddying the waters and not comparing apples with apples. Bog-standard tactics of yours which are as transparent as they are mendacious.

[Baron von Biffo]

wanna break that down for me??

indeed i try to exercise a certain degree of caution when reading opinions on the internet which by the way are no different to me than hearing them live...

True enough up to a point. There are fewer cues on-line though, to help one establish bona fides.


so, if you're trying to say something...well. Say it.

I thought I had.

[Baron von Biffo]

I am talking about banks. Banks are destroying the Irish economy with the aid of spineless politicians. Irish taxpayers are paying for a massive bailout of banks after those banks ran up massive debts through ineptitude, incompetence and hubris. That did not happen in Switzerland. You are, as usual, muddying the waters and not comparing apples with apples. Bog-standard tactics of yours which are as transparent as they are mendacious.

Are you saying that the Swiss would support lumping private mortgage debts onto the taxpayer?

[random new yorker]

True enough up to a point. There are fewer cues on-line though, to help one establish bona fides.

what 'cues' do you suggest i take to 'establish someone else's bona fides' ?

to me Slim's bona fides are just as good as yours...its an opinion, if voiced constructively to me makes no difference...i see no need to establishing bona fides of anyone, people should be able to voice whatever opinions they have even if they sit here pushing someone's agenda..

[Baron von Biffo]

what 'cues' do you suggest i take to 'establish someone else's bona fides' ?

to me Slim's bona fides are just as good as yours...its an opinion, if voiced constructively to me makes no difference...i see no need to establishing bona fides of anyone, people should be able to voice whatever opinions they have even if they sit here pushing someone's agenda..

Well then everybody's happy. :)

[Slim Buddha]

Are you saying that the Swiss would support lumping private mortgage debts onto the taxpayer?

The private mortgage market in Switzerland is very different to that in Ireland and never behaved in a way the Irish mortgage market behaved in the period 1997-2006. So it is not really a relevant question. Normally, a mortgage applicant needs 20-30% of a down-payment on a property before a bank will consider lending. This leads to mortgage applicants being middle aged when they apply, inheritance forming the base of the down-payment. As a result, there is no mortgage crisis here.

[Baron von Biffo]

The private mortgage market in Switzerland is very different to that in Ireland and never behaved in a way the Irish mortgage market behaved in the period 1997-2006. So it is not really a relevant question. Normally, a mortgage applicant needs 20-30% of a down-payment on a property before a bank will consider lending. This leads to mortgage applicants being middle aged when they apply, inheritance forming the base of the down-payment. As a result, there is no mortgage crisis here.

It's a very relevant question. You seldom miss an opportunity to extol the virtues of the Swiss way of doing things so I'm asking if they would be happy to take on the mortgage debts of those who couldn't or wouldn't pay them?

You can't honestly expect us to believe that it's never happened that a Swiss person wound up with a mortgage, or other debt, they couldn't pay?

[Slim Buddha]

It's a very relevant question. You seldom miss an opportunity to extol the virtues of the Swiss way of doing things so I'm asking if they would be happy to take on the mortgage debts of those who couldn't or wouldn't pay them?

You can't honestly expect us to believe that it's never happened that a Swiss person wound up with a mortgage, or other debt, they couldn't pay?

I am sure there are instances of this. I do not know the people personally. It certainly not a societal crisis like it is in Ireland. Lets not forget the Irish crisis is as a result of corruption, incompetence and criminality in banking, building and politics.

[Baron von Biffo]

I am sure there are instances of this. I do not know the people personally. It certainly not a societal crisis like it is in Ireland. Lets not forget the Irish crisis is as a result of corruption, incompetence and criminality in banking, building and politics.

All well and good but it doesn't answer the question (an oversight no doubt ;)) - Would the Swiss approve of passing private debts (even when there's a small level of them) onto the taxpayer?

[Slim Buddha]

All well and good but it doesn't answer the question (an oversight no doubt ;)) - Would the Swiss approve of passing private debts (even when there's a small level of them) onto the taxpayer?

It is an excellent question for a referendum, one of the huge benefits of direct democracy. I will canvass opinion among my acquaintances to see if we can get it on a listing. :D

[Baron von Biffo]

It is an excellent question for a referendum, one of the huge benefits of direct democracy. I will canvass opinion among my acquaintances to see if we can get it on a listing. :D

Slim my friend, if Ireland ever decides to put a slalom team in the winter Olympics I'll back you to the hilt for captain. ;)

[C. Flower]

There's a smell of facism off this.

[Slim Buddha]

Slim my friend, if Ireland ever decides to put a slalom team in the winter Olympics I'll back you to the hilt for captain. ;)

Despite the plentiful supply of winter sport facilities, I tend to avoid them. Simply getting to work in winter can be a challenge in itself, despite the excellent public transport.
Since mortgage debt is not endlessly discussed here, I have no idea if it is any sort of a problem. I doubt it, going on the basis that the Swiss tend not to vote criminals and imbeciles
into responsible political office nor would they tolerate reckless banks. The reputation of the larger banks here has never been so low. And when the SNB loaned the money to UBS,
one of the conditions was that the entire board had to resign.

[random new yorker]

Despite the plentiful supply of winter sport facilities, I tend to avoid them. Simply getting to work in winter can be a challenge in itself, despite the excellent public transport.
Since mortgage debt is not endlessly discussed here, I have no idea if it is any sort of a problem. I doubt it, going on the basis that the Swiss tend not to vote criminals and imbeciles
into responsible political office nor would they tolerate reckless banks. The reputation of the larger banks here has never been so low. And when the SNB loaned the money to UBS,
one of the conditions was that the entire board had to resign.

accountability.... as it should be!

[C. Flower]

I can't believe my ears. Completely broke people are going to be taxed / charged 5% extra to pay the effing PIPs (accountant buddies of Joan Burton) for being told to pay their debt.

"Expert advice" i.e. total rip off.

[Baron von Biffo]

I can't believe my ears. Completely broke people are going to be taxed / charged 5% extra to pay the effing PIPs (accountant buddies of Joan Burton) for being told to pay their debt.

"Expert advice" i.e. total rip off.

You want people who don't exactly have a good track record for financial sophistication to negotiate deals with professional debt collectors with no proper advice?

[random new yorker]

i want to clarify that my statement above re Accountability refers to the fact that the swiss bank fired the entire board for its failure in doing its job..not judging accountability of irish people paying/not paying personal debt

[Slim Buddha]

i want to clarify that my statement above re Accountability refers to the fact that the swiss bank fired the entire board for its failure in doing its job..not judging accountability of irish people paying/not paying personal debt

I understood exactly what you meant, RNY.

[Spectabilis]

Do these budget guidelines apply to Fingleton, S Fitzpatrick, the Dunnes etc? or are they still solvent?

[C. Flower]

You want people who don't exactly have a good track record for financial sophistication to negotiate deals with professional debt collectors with no proper advice?

Accounts know how to balance the books. They have no experience or expertise in negotiation of loan write downs. The whole thing is a pork exercise for the accountancy profession, who actually put up their fees after the crash.

All they will do at best is add to the debt of the indebted people.

[jmcc]

I can't believe my ears. Completely broke people are going to be taxed / charged 5% extra to pay the effing PIPs (accountant buddies of Joan Burton) for being told to pay their debt.

"Expert advice" i.e. total rip off.The irony being that many of these people will be the parasites who caused many problems in the first place?

Regards...jmcc

[Baron von Biffo]

Accounts know how to balance the books. They have no experience or expertise in negotiation of loan write downs. The whole thing is a pork exercise for the accountancy profession, who actually put up their fees after the crash.

All they will do at best is add to the debt of the indebted people.

Which would get the best outcome do you think :-

(A) Person who took out 110% mortgage for turn-key house (+4x4) and ran up credit card and other debts as well negotiating with a bank on their own?

Or

(B) Same person with accountant or other professional?

[C. Flower]

Which would get the best outcome do you think :-

(A) Person who took out 110% mortgage for turn-key house (+4x4) and ran up credit card and other debts as well negotiating with a bank on their own?

Or

(B) Same person with accountant or other professional?

I think if the bank professionals who issued the loans whilst picking up large commissions were replaced by trained insolvency practitioners, some progress might be made.

[Baron von Biffo]

I think if the bank professionals who issued the loans whilst picking up large commissions were replaced by trained insolvency practitioners, some progress might be made.

Grand, but back on Earth we're talking about what's the best way forward for people who've got themselves into a heap of debt. You can't seriously be suggesting that they should be sent into negotiations where they'll be way out of their depth without any professional advice?

[Slim Buddha]

Grand, but back on Earth we're talking about what's the best way forward for people who've got themselves into a heap of debt. You can't seriously be suggesting that they should be sent into negotiations where they'll be way out of their depth without any professional advice?

Indeed, especially when the dice known as "the law" is fully loaded against them. They need all the help they can get, including the power of prayer.

[Baron von Biffo]

Indeed, especially when the dice known as "the law" is fully loaded against them. They need all the help they can get, including the power of prayer.

Let's talk sense for a second here Slim. Is there a country in the world that doesn't have laws about paying ones debts?

[Slim Buddha]

Let's talk sense for a second here Slim. Is there a country in the world that doesn't have laws about paying ones debts?

I doubt it but I am disgusted by the way the government gives the banks everything they want. Now Noonan is lifting the restriction on the number of unsolicited phone calls a bank can make to a customer. Having failed miserably to control Bouchers´remuneration, allowing it to go €343,000 above the so-called ceiling of half a million, now he is allowing them to remove the leads and muzzles and set them loose . Who is in control here? Or is Noonan simply the banks doormat?

[Simonsays]

I can't help wondering what planet are the insolvency guidelines designed for when they provide €31.09 per month on medical expenses. That would pay just over half a doctor's visit. Does anyone go for half visits to doctors? Or maybe a quarter to allow for a prescription? Is that the cost if you go up to the door but don't cross the threshold? Or is it for doctor's visits where you don't sit down or lie down? How much would the clothing allowance pay for? A pair of jeans and half a shirt? Two thirds of a pair of shoes? Or maybe a full pair of shoes if you don't have any heels on them? Does it allow for people to have laces?

[random new yorker]

Let's talk sense for a second here Slim. Is there a country in the world that doesn't have laws about paying ones debts?

errr Mr Baron v B ... we have some interesting bankruptcy laws here in the US

[Slim Buddha]

I can't help wondering what planet are the insolvency guidelines designed for when they provide €31.09 per month on medical expenses. That would pay just over half a doctor's visit. Does anyone go for half visits to doctors? Or maybe a quarter to allow for a prescription? Is that the cost if you go up to the door but don't cross the threshold? Or is it for doctor's visits where you don't sit down or lie down? How much would the clothing allowance pay for? A pair of jeans and half a shirt? Two thirds of a pair of shoes? Or maybe a full pair of shoes if you don't have any heels on them? Does it allow for people to have laces?

It makes you wonder, doesn´t it? I seriously think that several members of this government belong in some kind of secured home or supervised sheltered accommodation.

[Baron von Biffo]

I doubt it but I am disgusted by the way the government gives the banks everything they want. Now Noonan is lifting the restriction on the number of unsolicited phone calls a bank can make to a customer. Having failed miserably to control Bouchers´remuneration, allowing it to go €343,000 above the so-called ceiling of half a million, now he is allowing them to remove the leads and muzzles and set them loose . Who is in control here? Or is Noonan simply the banks doormat?

I'm open to correction here but I think the amount of mortgages in arrears (genuine and contrived) is something like €17bn and on top of that there's unsecured debt. A huge wodge of all that is hanging over the taxpayer.

If we togged Boucher out in a little suit with arrows on it, put a ball and chain on his ankle and made him work for nothing it wouldn't have any noticeable effect on that figure.

This crazed obsession we have with what other people are earning does absolutely nothing to help the taxpayer or those up to their arses in debt.

[Baron von Biffo]

errr Mr Baron v B ... we have some interesting bankruptcy laws here in the US

You also have the death penalty. Not everything you do over there is desirable.

It may stun you to learn that we have bankruptcy laws in Ireland as well. The problem we have at the moment is that there's a considerable lobby for handing debts over to the taxpayer while the debtor holds on to the assets. Somehow I doubt that that's how things are done in your part of the world. Or any other part come to that.

[Slim Buddha]

I'm open to correction here but I think the amount of mortgages in arrears (genuine and contrived) is something like €17bn and on top of that there's unsecured debt. A huge wodge of all that is hanging over the taxpayer.

If we togged Boucher out in a little suit with arrows on it, put a ball and chain on his ankle and made him work for nothing it wouldn't have any noticeable effect on that figure.

This crazed obsession we have with what other people are earning does absolutely nothing to help the taxpayer or those up to their arses in debt.

It would be a sign that some sort of accountability is in action. But Ireland is notorious for a complete lack of accountability. It is not a crazed obsession is this one individual case. It is a case of a Finance Minister stating that bailed out banks will have a ceiling on executive pay and then caving in completely when the banks tell him to cop on to himself. Pathetic.

[C. Flower]

Why is the amount allowed not the same as a Social Welfare allowance ?

[C. Flower]

You also have the death penalty. Not everything you do over there is desirable.

It may stun you to learn that we have bankruptcy laws in Ireland as well. The problem we have at the moment is that there's a considerable lobby for handing debts over to the taxpayer while the debtor holds on to the assets. Somehow I doubt that that's how things are done in your part of the world. Or any other part come to that.

How many people in Ireland have ever been made bankrupt ?

[Baron von Biffo]

It would be a sign that some sort of accountability is in action. But Ireland is notorious for a complete lack of accountability. It is not a crazed obsession is this one individual case. It is a case of a Finance Minister stating that bailed out banks will have a ceiling on executive pay and then caving in completely when the banks tell him to cop on to himself. Pathetic.

The time for accountability was when the lying drunk who wrote the blank cheque to the bankers went for re-election. The people of Dublin West chose to ignore what he'd done to us.

But that's history. It does nothing to deal with the insolvency problem.

[jmcc]

The time for accountability was when the lying drunk who wrote the blank cheque to the bankers went for re-election.Would you agree with the pensions and assets of those who caused the problem being seized?

Regards...jmcc

[C. Flower]

The idea of people working all their lives, many in skilled jobs, with no hope of getting out of penury, is a non runner in the long run.
People will throw in the keys and emigrate wherever they can.

[disability student]

Would you agree with the pensions and assets of those who caused the problem being seized?

Regards...jmcc

I would agree in totality even seize their spouse's assets. It's noticeable that all of woman whose spouse had caused huge damage to our country.Also banks played a blinder there by giving unchecked loans with no documentation.

[Spectabilis]

389

[Spectabilis]

Mary Lou is not kidding about the .79 cent for personal costs. The 31.09 for someone without a medical card is risible.

[Baron von Biffo]

How many people in Ireland have ever been made bankrupt ?

I have no idea.

[jmcc]

I would agree in totality even seize their spouse's assets. It's noticeable that all of woman whose spouse had caused huge damage to our country.Also banks played a blinder there by giving unchecked loans with no documentation.A financial sipphenhaft? That would upset Fluffy. ;) But in this situation, where the spouse and family was complicit, it should be a legitimate response.

Regards...jmcc

[Spectabilis]

Bitte, was ist ein sipphenhaft? :confused:

[C. Flower]

I have no idea.


In one week recently, w/e November 5th 2010 a total of 74 bankruptcy orders were made in Belfast under the UK Bankruptcy legislation, which is among the best in the European Union. This was more than the total number of bankruptcies in Ireland in the last five years.

http://www.nationaldebtrelief.ie/articles/what-makes-bankruptcy-law-in-ireland-so-draconian/

Cost of an Irish bankruptcy in the High Court estimated at €30,000.00

[disability student]

A financial sipphenhaft? That would upset Fluffy. ;) But in this situation, where the spouse and family was complicit, it should be a legitimate response.

Regards...jmcc

Agree with yours in the event where spouse/family was complicit.:)

A financial sipphenhaft???? what's that?

[jmcc]

Bitte, was ist ein sipphenhaft? :confused:Well it means that for crooked banksters and their political cronies, their whole family is liable because they were involved. A kind of blood punishment.

Regards...jmcc

[Baron von Biffo]

Would you agree with the pensions and assets of those who caused the problem being seized?

Regards...jmcc

We need to be mindful of the fact that there may be criminal proceedings arising out of some of these matters. As a general principle I've long been of the view that where there's been wrongdoing by directors they shouldn't be allowed to continue to avail of the protections of limited liability.

[disability student]

Well it means that for crooked banksters and their political cronies, their whole family is liable because they were involved. A kind of blood punishment.

Regards...jmcc

Based on Nazi's idea of purity (see here :In the Third Reich, political dissidents were not the only ones liable to be punished for their crimes. Their parents, siblings and relatives also risked reprisals. This concept - known as Sippenhaft - was based in ideas of blood and purity. This definitive study surveys the threats, fears and infliction of this part of the Nazi system of terror.)???

[Spectabilis]

Thanks DS and jmcc. Shudder.

[disability student]

Would agree with your idea of financial sippenhaft especially bankers and politicians who have played their part even a minor or major role. That is to ensure that lessons are learnt and not be repeated. It's more likely that it will occur again as FG haven't learned their leesons as they are rubber stamping FF policies.

[random new yorker]

Well it means that for crooked banksters and their political cronies, their whole family is liable because they were involved. A kind of blood punishment.

Regards...jmcc

Under ANY circumstances children should be responsible for their parents mistakes.

You can add that to your human rights bill.

[Slim Buddha]

I would agree in totality even seize their spouse's assets. It's noticeable that all of woman whose spouse had caused huge damage to our country.Also banks played a blinder there by giving unchecked loans with no documentation.

The "Wife´s name" codology should have been closed off long ago. It is, in many cases, little more than a criminal device.

[Slim Buddha]

The time for accountability was when the lying drunk who wrote the blank cheque to the bankers went for re-election. The people of Dublin West chose to ignore what he'd done to us.

But that's history. It does nothing to deal with the insolvency problem.

The people of Laois-Offaly chose to re-elect Biffo when it was clear that, as a Finance Minister, he didn´t know his orse from his elbow. The people of Dublin Mid-West chose to re-elect Harney when it was clear that she was unfit to preside over the health services and continued to preside over the destruction of those services. As you say, that is history. We are where we are and playing poker with peoples lives with the loaded deck bequeathed to us by a bent government is not the answer.

[Baron von Biffo]

This on Plank now.

[Baron von Biffo]

Not good listening for those with jerky knees.

[C. Flower]

Whoever is speaking is fudging the issue of who pays for the "personal insolvency practitioners" - it is of course the indebted person.

It appears that emigration to the U.K. and bankruptcy there (which can be done by filling in a form, rather than High Court process costing tens of thousands) beats the Irish situation into a cocked hat.

[DCon]

Whoever is speaking is fudging the issue of who pays for the "personal insolvency practitioners" - it is of course the indebted person.

It appears that emigration to the U.K. and bankruptcy there (which can be done by filling in a form, rather than High Court process costing tens of thousands) beats the Irish situation into a cocked hat.

Especially with the UK being a 1 hour drive from Dublin

[C. Flower]

Especially with the UK being a 1 hour drive from Dublin

"If all else fails, try Wales"

Or England, where rumour has it there are still jobs to be had.

[Baron von Biffo]

Whoever is speaking is fudging the issue of who pays for the "personal insolvency practitioners" - it is of course the indebted person.

He didn't fudge it at all. He explained that ultimately it will be the creditor.


It appears that emigration to the U.K. and bankruptcy there (which can be done by filling in a form, rather than High Court process costing tens of thousands) beats the Irish situation into a cocked hat.

That was always the option for crooks who want to sting their creditors.

[C. Flower]

He didn't fudge it at all. He explained that ultimately it will be the creditor.



That was always the option for crooks who want to sting their creditors.

No, he said "it will come out of the settlement with the bank"

Not everyone has your acuity of hearing.

[C. Flower]

He didn't fudge it at all. He explained that ultimately it will be the creditor.


That was always the option for crooks who want to sting their creditors.

A small number of crooks, yes. But not anyone who wants to work, raise their family and live a normal life.

Hugely disruptive of someone's life, and then, not easy to return to Ireland, given the lack of employment here.

[C. Flower]

PIP to get €11.75% of the overall settlement. Could be a very large sum.

There is an upfront fee of €1500.

PIPs have different ways of charging - it is not in the legislation.

The system is abominable in my view.

Why can people not select their own adviser or choose to act for themselves ?



.

[Baron von Biffo]

No, he said "it will come out of the settlement with the bank"

Quite. From the total amount the borrower can repay, 12% will go to the PIP. Since it's a debt write down scheme that means the bank, and/or other creditors are the ones who will ultimately pay it.


Not everyone has your acuity of hearing.

The ears got a right going over with a scissors at the weekend. I can hear spiders farting from across the road at the moment. :)

[Baron von Biffo]

A small number of crooks, yes. But not anyone who wants to work, raise their family and live a normal life.

Hugely disruptive of someone's life, and then, not easy to return to Ireland, given the lack of employment here.

Does your definition of a normal life not include paying ones debts?

[C. Flower]

Does your definition of a normal life not include paying ones debts?

The meaning of "can't pay" seems to elude you.

[Baron von Biffo]

PIP to get €11.75% of the overall settlement. Could be a very large sum.

If after applying the guidelines it's determined that the borrower can repay say €5k a year, the PIP will get €587.50 and the other creditors will get the balance.


There is an upfront fee of €1500.

There's provision for PIPS to seek an up front fee but the reality is that very few people with €1,500 lying around will be availing of these arrangements.


PIPs have different ways of charging - it is not in the legislation.

The income available for debt settlement won't change regardless of how the PIP charges.


The system is abominable in my view.

Why can people not select their own adviser or choose to act for themselves ?

Why do you think they can't do this?

[Baron von Biffo]

The meaning of "can't pay" seems to elude you.

Yet again you dodge answering uncomfortable questions.

Insolvency arrangements are all about determining what a debtor can pay.

[Baron von Biffo]

Some (unidentified) chancer contacted Plank to know if the self employed could use the insolvency legislation to dodge their taxes.

You have to love our risk-taking entrepreneurs.

[C. Flower]

Yet again you dodge answering uncomfortable questions.

Insolvency arrangements are all about determining what a debtor can pay.

It is yourself who says the opposite, about legal means of dealing with precisely with who should be paid what, out of any assets or income of a bankrupt person.


Does your definition of a normal life not include paying ones debts?

[Baron von Biffo]

It is yourself who says the opposite, about legal means of dealing with precisely with who should be paid what, out of any assets or income of a bankrupt person.


Does your definition of a normal life not include paying ones debts?


First off, I don't know why you've quoted my question when you still refuse to answer it.

Secondly I have no idea what you mean by that post.

Personal insolvency arrangements are structured debt write down mechanisms. They look at an individuals income and assets to establish how much is available after their needs are met to repay their creditors. There's nothing novel about them, they've been around for a very long time.

Since you absolutely refuse to answer any questions about your own position I can only infer from what you write that you believe everyone has a right to refuse to pay their debts. You don't seem to understand (and I did ask in another thread but you refused to answer) that there are two parties to a debt and that there are negative consequences for lenders when debts aren't repaid. It also seems to have escaped your notice that it's the taxpayer who'll be stung with much of the cost of unpaid debt and that means that ultimately it's the very weakest in society who'll have to live with the consequences.

[ang]

When will all the NAMA developers be availing of this ?

Same rules for all I say.

[Slim Buddha]

When will all the NAMA developers be availing of this ?

Same rules for all I say.

I thought the NAMA crowd, being "insiders", had a different arrangement to ensure their material wellbeing. None of this €31.09 pocket for them! Besides, "the wife's name" scam has had plenty of time to bed down since the faeces hit the fan.

[C. Flower]

First off, I don't know why you've quoted my question when you still refuse to answer it.

Secondly I have no idea what you mean by that post.

Personal insolvency arrangements are structured debt write down mechanisms. They look at an individuals income and assets to establish how much is available after their needs are met to repay their creditors. There's nothing novel about them, they've been around for a very long time.

Since you absolutely refuse to answer any questions about your own position I can only infer from what you write that you believe everyone has a right to refuse to pay their debts. You don't seem to understand (and I did ask in another thread but you refused to answer) that there are two parties to a debt and that there are negative consequences for lenders when debts aren't repaid. It also seems to have escaped your notice that it's the taxpayer who'll be stung with much of the cost of unpaid debt and that means that ultimately it's the very weakest in society who'll have to live with the consequences.

You do not seem to understand that insolvency is not anything to do with willingness or otherwise to pay, it is to do with inability to pay.

I am acutely aware of the consequences of the vast amount on unpayable private debt that was generated in Ireland. It means the banks, in spite of the vast recaps at public expense are still in reality bust, as much of what they describe as assets is a heap of unrepayable debt.

[Slim Buddha]

You do not seem to understand that insolvency is not anything to do with willingness or otherwise to pay, it is to do with inability to pay.

I am acutely aware of the consequences of the vast amount on unpayable private debt that was generated in Ireland. It means the banks, in spite of the vast recaps at public expense are still in reality bust, as much of what they describe as assets is a heap of unrepayable debt.


Or, since the banks depend on grossly inflated valuations of the properties they will soon own outright, the assets can be described as pulp fiction. Yes, they are bust and remain bust and should have been driven into insolvency in 2008. Instead of this, we have a completely zombie banking sector devouring everything in its wake, seemingly egged on by Noonan and the other willing facilitators.

[Baron von Biffo]

You do not seem to understand that insolvency is not anything to do with willingness or otherwise to pay, it is to do with inability to pay.

The inability to pay argument is now dead with these new arrangements. It's now possible to look at a debtors circumstances, income and assets and having allowed for a reasonable lifestyle, determine how much they can afford to pay.

The only people who will object are those who want to shift their debts onto their creditors while suffering no pain themselves.


I am acutely aware of the consequences of the vast amount on unpayable private debt that was generated in Ireland. It means the banks, in spite of the vast recaps at public expense are still in reality bust, as much of what they describe as assets is a heap of unrepayable debt.

Insolvency arrangements are structured debt write-down so the banks (and other creditors) take a hit as well. It's simply immoral to say that debtors should be allowed to sting their creditors but suffer no negative consequences themselves.

[Slim Buddha]

T It's simply immoral to say that debtors should be allowed to sting their creditors but suffer no negative consequences themselves.

That is quite simply the most entertaining sentence uttered in this entire debate. To introduce the concept of "morality" into this gargantuan cowpat is simply staggering because there was sod all morality involved when the last government, the construction and property speculation industry and the banks created said cowpat and bugger all morality seen from Noonan and the other willing lapdogs who are busy chasing their tails and having rings run around them now.

Morality !!!! Jesus wept!.

[Baron von Biffo]

That is quite simply the most entertaining sentence uttered in this entire debate. To introduce the concept of "morality" into this gargantuan cowpat is simply staggering because there was sod all morality involved when the last government, the construction and property speculation industry and the banks created said cowpat and bugger all morality seen from Noonan and the other willing lapdogs who are busy chasing their tails and having rings run around them now.

Morality !!!! Jesus wept!.

Right, the old two wrongs do make a right argument. It's never far away these days.

[C. Flower]

The inability to pay argument is now dead with these new arrangements. It's now possible to look at a debtors circumstances, income and assets and having allowed for a reasonable lifestyle, determine how much they can afford to pay.

The only people who will object are those who want to shift their debts onto their creditors while suffering no pain themselves.


Insolvency arrangements are structured debt write-down so the banks (and other creditors) take a hit as well. It's simply immoral to say that debtors should be allowed to sting their creditors but suffer no negative consequences themselves.

Well, if anyone is saying that there could be "no negative consequences" where people have bought a house they can't now pay for, please would they put their hands up?

[Slim Buddha]

Right, the old two wrongs do make a right argument. It's never far away these days.

"Morality" in a discussion on Irish politics/banking/regulation/what passes for "business" there !!!

Sorry, but it is ridiculously funny!

[Baron von Biffo]

Well, if anyone is saying that there could be "no negative consequences" where people have bought a house they can't now pay for, please would they put their hands up?

Since you refuse to answer questions on your position all we can do is attempt to draw inferences from what your posting. That leads one to believe you think that people should be able to shift their debts onto their creditors with no negative consequences.

[C. Flower]

Since you refuse to answer questions on your position all we can do is attempt to draw inferences from what your posting. That leads one to believe you think that people should be able to shift their debts onto their creditors with no negative consequences.

You haven't asked any questions Baron, you have made assertions and assumptions. But moreso the difficulty is that you are presenting economic alternatives as immoral or moral. There is nothing moral about this economic system, which is entirely based on theft from producers of value to non-producers.

[Baron von Biffo]

You haven't asked any questions Baron,

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331164#post331164

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331168#post331168

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331292#post331292

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331288#post331288


you have made assertions and assumptions. But moreso the difficulty is that you are presenting economic alternatives as immoral or moral. There is nothing moral about this economic system, which is entirely based on theft from producers of value to non-producers.

Well the thing about that is we have the economic system we want. It's what we vote for election after election. Support levels for those who would have us change to something you might approve of are derisory.

Now it may be that someday we'll evolve into a new species that organises on the basis of class rather than family and tribe but until then we have to deal with who we are and the realities of our world.

That means we have to address the personal debt situation so let me ask you:-

How would you address it?

Do you think that both debtor and and creditor should take a hit or should all the pain be on one side?

Do you think it's good policy to have clear published expenditure guidelines to assist in making settlements?

Should debtors have access to professional advice in insolvency negotiations?

What should happen to those who renege on insolvency agreements?

Hopefully there's no ambiguity about those questions and while there's no obligation on anyone here to answer questions, it would be helpful to see where you stand on this if you did.

[ang]

Playing spot the difference between the personal insolvency act for *people* and the *process* for those (many of whom brought down this economy) go through. -


It must surely strike most people as odd that, as part of the forthcoming personal insolvency arrangements, the names, addresses and dates of birth of those availing of the arrangements will be a public document, whilst at the same time, the State writes off billions in debt owed by wealthy individuals and companies.


So, if you are a Merchant Prince who has undergone a process which has cost the State millions, you escape any naming-and-shaming and indeed, in time, you get to boast how great a businessman you are for restructuring your debt after disastrous decisions to expand during the 2000s


But, if you have a €300,000 mortgage with Ulster Bank which relates to a property that is now worth €200,000 and you enter into a six year personal insolvency arrangement and pay back €60,000 during this time and at the end of the six year period, you get a debt writedown of €40,000 then your name will be immortalized in a public register. And you haven’t cost the State a cent because Ulster Bank is not financially supported by the State. Yet, having likely cost AIB millions, the Crosbies are Jack-the-Lads.

http://namawinelake.wordpress.com/2013/04/21/the-thomas-crosbie-debt-write-off/

[C. Flower]

[QUOTE=Baron von Biffo;331540]http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331164#post331164

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331168#post331168

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331292#post331292

http://www.politicalworld.org/showthread.php?10945-Personal-Insolvency-Act-Debt-Forgiveness-or-a-Political-Fudge-quot-Talk-to-Your-Banks-quot-Says-Gilmore&p=331288#post331288


All anwered on the thread, apart from one, that I missed and will reply to later today.


Well the thing about that is we have the economic system we want.

You do, I don't.


It's what we vote for election after election. Support levels for those who would have us change to something you might approve of are derisory.

The economic system is no more put up for a vote than is a united ireland. There is no alternative being put forward in elections and change of the economic system through elections is not possible. That, in itself, is no argument in favour of holding on eternally to the status quo.


Now it may be that someday we'll evolve into a new species that organises on the basis of class rather than family and tribe but until then we have to deal with who we are and the realities of our world.

Society is already organised on the basis of class, and Namawinelake's post, quoted by ang, illustrates that well.


That means we have to address the personal debt situation so let me ask you:-

It means that one class will decide what happens about personal debt of the two different classes (unless very energetically challenged). The outcome will be different for each class.


How would you address it?

It is not fixable within the present system. All the arguments you make are about shifting it around. Nobody wants to write it down.

Bondholder debt was of course all written off, and that has contributed very substantially to the problem.


Do you think that both debtor and and creditor should take a hit or should all the pain be on one side?

If a person has no money and no income, their creditors are also in a spot of bother. The outcome will be happy for neither side.

In terms of income, and living standards, I'm in favour of equality. Let people decide how they spend it themselves.


Do you think it's good policy to have clear published expenditure guidelines to assist in making settlements?

I think it is bullying nonsense. Much of the noise about this is to terrorise people to pay mortgage debt off before they pay for heat or food.


Should debtors have access to professional advice in insolvency negotiations?

I would advise them to form large groups and to employ people full time to act for them, en bloc, and to refuse to deal with the banks on an individual basis. They should look for support from their trade unions in this. They should get the best legal advice they can, and wherever the banks were at fault, take action against them.


What should happen to those who renege on insolvency agreements?

Put them up against a wall and shoot them? Send them down the mines ?


Hopefully there's no ambiguity about those questions and while there's no obligation on anyone here to answer questions, it would be helpful to see where you stand on this if you did.

They were nice clear questions, and it was a pleasure to reply :)

One for you: would Croke Park 2 push more people into mortgage arrears ? If so, whose fault is that ?

[Baron von Biffo]

Playing spot the difference between the personal insolvency act for *people* and the *process* for those (many of whom brought down this economy) go through. -


But, if you have a €300,000 mortgage with Ulster Bank which relates to a property that is now worth €200,000 and you enter into a six year personal insolvency arrangement and pay back €60,000 during this time and at the end of the six year period, you get a debt writedown of €40,000 then your name will be immortalized in a public register. And you haven’t cost the State a cent because Ulster Bank is not financially supported by the State. Yet, having likely cost AIB millions, the Crosbies are Jack-the-Lads.

http://namawinelake.wordpress.com/2013/04/21/the-thomas-crosbie-debt-write-off/

Bit of a numeracy problem there. If you have a €300k mortgage and you pay €60k you'll have had a €240k write down.

There's also a somewhat clumsy attempt at spin. It's not the case that all developer loans are with covered banks and all mortgages are with the others.

[ang]

Bit of a numeracy problem there. If you have a €300k mortgage and you pay €60k you'll have had a €240k write down.

There's also a somewhat clumsy attempt at spin. It's not the case that all developer loans are with covered banks and all mortgages are with the others.

Those figures are based on a €40.000 write down so are therefore correct.

A lot of developer loans are with NAMA and being dealt with by NAMA who are only seeking the portion owed to NAMA and not the full amount which WE have already paid to the banks for those loans.

Is it the case that some portion of NAMA loan book owed to other non state owned banks have been paid or negotiated by NAMA ?

[Baron von Biffo]

All anwered on the thread, apart from one, that I missed and will reply to later today.

Replying to a post that contained the question isn't the same as answering the question but I suspect it's as good as we're going to get.


You do, I don't.

It's only happened once that the candidate I gave my No.1 to was elected you can hardly say that I have the system I'd like.


The economic system is no more put up for a vote than is a united ireland. There is no alternative being put forward in elections and change of the economic system through elections is not possible. That, in itself, is no argument in favour of holding on eternally to the status quo.

Boyd-Barrett, Higgins and the rest of that ilk might disagree. If by some mischance, either of their parties ever won a majority and held together long enough to govern I think whoever survived it would notice things done differently.


Society is already organised on the basis of class, and Namawinelake's post, quoted by ang, illustrates that well.

No it doesn't. It attempts to equate commercial and personal situations and ignores the fact that if, in their personal capacity, developers are insolvent they will be subject to the same legislation as anyone else.

Class is a handy crude label for looking at society but trying to elevate it to something beyond that is a recipe for failure because it ignores our humanity (http://www.politicalworld.org/showthread.php?12321-Does-Communism-Leave-Out-the-Human-Factor&p=266021#post266021).


It means that one class will decide what happens about personal debt of the two different classes (unless very energetically challenged). The outcome will be different for each class.

I don't understand what you mean by that. Is it your case that that ll borrowers are in one class and all creditors in another?


It is not fixable within the present system. All the arguments you make are about shifting it around. Nobody wants to write it down.

Writing down debt doesn't make it magically disappear, it just shifts it from the debtor to the creditor. Why do you think that's a good thing?


Bondholder debt was of course all written off, and that has contributed very substantially to the problem.

Their debts weren't written down - their losses were made good. Different but still wrong. Another wrong won't make anything right.


If a person has no money and no income, their creditors are also in a spot of bother. The outcome will be happy for neither side.

In terms of income, and living standards, I'm in favour of equality. Let people decide how they spend it themselves.

The insolvency scheme is about dealing with the unhappy situation where a debtor has insufficient funds to repay all their debts. It seeks to establish how much can be paid after allowing for the debtor to have a reasonable standard of living.

It spreads the unpleasant consequences across the parties rather than, as you'd prefer, lumping all the pain on the creditor and allowing the debtor to walk away with no negative consequences.


I think it is bullying nonsense. Much of the noise about this is to terrorise people to pay mortgage debt off before they pay for heat or food.

But it doesn't do that. The guidelines, like equivalent schemes in other countries, make allowance for reasonable living expenses before calculating the amount available for debt repayment.

You've repeatedly said that your argument is about 'can't' pay rather than 'won't' pay. How would you determine who can pay? If you were Minister for Finance, how would you draw the line between the two.


I would advise them to form large groups and to employ people full time to act for them, en bloc, and to refuse to deal with the banks on an individual basis. They should look for support from their trade unions in this. They should get the best legal advice they can, and wherever the banks were at fault, take action against them.

So you do think they should have professional advice. I suspect that most people would be more interested in dealing with their own family situation than banding together with your big groups to get themselves stuck with a one-size-fits-all arrangement. Strangely, the government's approach is more humane than yours here.


Put them up against a wall and shoot them? Send them down the mines ?

It was a serious question.


They were nice clear questions, and it was a pleasure to reply :)

One for you: would Croke Park 2 push more people into mortgage arrears ? If so, whose fault is that ?

That's two. ;)

Yes, CP II would inevitably push more people into mortgage arrears and it would be the fault of the bullying employer.

See how easy it is to give clear, precise and unambiguous answers? ;)

[Baron von Biffo]

Those figures are based on a €40.000 write down so are therefore correct.

A lot of developer loans are with NAMA and being dealt with by NAMA who are only seeking the portion owed to NAMA and not the full amount which WE have already paid to the banks for those loans.

Is it the case that some portion of NAMA loan book owed to other non state owned banks have been paid or negotiated by NAMA ?

What am I missing Ang? €300k - €60k = €240k so where has the other €200k gone?

[ang]

What am I missing Ang? €300k - €60k = €240k so where has the other €200k gone?

Baron you are assuming a full writedown in your calculations, the figures presented are for a €40.000 writedown.-


But, if you have a €300,000 mortgage with Ulster Bank which relates to a property that is now worth €200,000 and you enter into a six year personal insolvency arrangement and pay back €60,000 during this time and at the end of the six year period, you get a debt writedown of €40,000 then your name will be immortalized in a public register.

There may be no full writedowns.

[Baron von Biffo]

Baron you are assuming a full writedown in your calculations, the figures presented are for a €40.000 writedown.-

There may be no full writedowns.

Sorry Ang but you'll have to help me a bit more on this because I can't understand it.

(1) There's a €300k debt.

(2) Borrower goes through insolvency process paying €60k.

(3) At the end of 6 years the borrower is free and clear.

How do those numbers become a €40k write-down and what's happened to the other €200k?

[ang]

Sorry Ang but you'll have to help me a bit more on this because I can't understand it.

(1) There's a €300k debt.

(2) Borrower goes through insolvency process paying €60k.

(3) At the end of 6 years the borrower is free and clear.

How do those numbers become a €40k write-down and what's happened to the other €200k?

Absolutely not so. After six years there will be eg. €40.000 write down for good behaviour so to speak Baron.
Years of the balance of mortgage will then be extended or a mortgage split etc. etc. This has been invoked to try to prevent default allowing someone who wishes to keep their home breathing space and an easier payment regime.

Anyone who cannot keep up with these new deals will be selling up so lets say bank gave mortgage for €300.000 and property sells for €200.000 the banks get the €200.000 and the borrower goes through full insolvency proceedings. Bank will have €200.000 return+any payments already made by the borrower. In this instance the borrower will have had a write down of the amount oustanding from the €200.000 sale and any payments made.

There seems to be huge misunderstanding as to how this procedure is going to work but no-one will be keeping their homes unless they go through restructuring and continued payments, they will though get x amount of a writedown as I stated earlier for good behaviour.

[C. Flower]

Absolutely not so. After six years there will be eg. €40.000 write down for good behaviour so to speak Baron.
Years of the balance of mortgage will then be extended or a mortgage split etc. etc. This has been invoked to try to prevent default allowing someone who wishes to keep their home breathing space and an easier payment regime.

Anyone who cannot keep up with these new deals will be selling up so lets say bank gave mortgage for €300.000 and property sells for €200.000 the banks get the €200.000 and the borrower goes through full insolvency proceedings. Bank will have €200.000 return+any payments already made by the borrower. In this instance the borrower will have had a write down of the amount oustanding from the €200.000 sale and any payments made.

There seems to be huge misunderstanding as to how this procedure is going to work but no-one will be keeping their homes unless they go through restructuring and continued payments, they will though get x amount of a writedown as I stated earlier for good behaviour.

It seems to me that this might only suit a very small proportion of people who are struggling with mortgages.

[Baron von Biffo]

Absolutely not so. After six years there will be eg. €40.000 write down for good behaviour so to speak Baron.
Years of the balance of mortgage will then be extended or a mortgage split etc. etc. This has been invoked to try to prevent default allowing someone who wishes to keep their home breathing space and an easier payment regime.

Anyone who cannot keep up with these new deals will be selling up so lets say bank gave mortgage for €300.000 and property sells for €200.000 the banks get the €200.000 and the borrower goes through full insolvency proceedings. Bank will have €200.000 return+any payments already made by the borrower. In this instance the borrower will have had a write down of the amount oustanding from the €200.000 sale and any payments made.

There seems to be huge misunderstanding as to how this procedure is going to work but no-one will be keeping their homes unless they go through restructuring and continued payments, they will though get x amount of a writedown as I stated earlier for good behaviour.

Thanks Ang. More reading for me now because if what you say is correct then you can number me amongst those who misunderstand this business.

[ang]

Thanks Ang. More reading for me now because if what you say is correct then you can number me amongst those who misunderstand this business.

Ah OK Baron :)

I should also point out that these new rules/insolvency etc. have been brought forward so as banks can show they have met the new targets of around 20.000 mortgage restructurings a month otherwise banks will be forced to set aside extra capital in 2014 to be in line with new provisions being introduced.

[ang]

Just a couple of quotes on Personal Insolvency Arrangements to help clarify details. PIA will be the mechanism used for mortgages and can include personal non secured debt -


If you successfully complete the PIA, all of your unsecured debts are discharged. You will remain liable to pay the mortgage in respect of his principal private residence on the restructured terms agreed under the PIA.

http://insolvencyarrangement.com/personal-insolvency-arrangements/


When the agreed period ends, and if your PIA has operated successfully, you will be discharged from the unsecured debts that it covered but the secured debt will only be discharged to the extent specified in the PIA.

http://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/personal_insolvency/personal_insolvency_options.html#l4f94d

There will also be DRC a debt relief certificate which allows for the writedown of unsecured debt up to €20.000 and a person must be insolvent to avail.

Then for unsecured debts of €20.001 upwards there will be DSA which also allows for writedowns and again the debtor must be insolvent and will need to meet other criteria.

[Baron von Biffo]

Absolutely not so. After six years there will be eg. €40.000 write down for good behaviour so to speak Baron.
Years of the balance of mortgage will then be extended or a mortgage split etc. etc. This has been invoked to try to prevent default allowing someone who wishes to keep their home breathing space and an easier payment regime.

Anyone who cannot keep up with these new deals will be selling up so lets say bank gave mortgage for €300.000 and property sells for €200.000 the banks get the €200.000 and the borrower goes through full insolvency proceedings. Bank will have €200.000 return+any payments already made by the borrower. In this instance the borrower will have had a write down of the amount oustanding from the €200.000 sale and any payments made.

There seems to be huge misunderstanding as to how this procedure is going to work but no-one will be keeping their homes unless they go through restructuring and continued payments, they will though get x amount of a writedown as I stated earlier for good behaviour.

I've had a look at the act (http://www.irishstatutebook.ie/pdf/2012/en.act.2012.0044.pdf) and found that Section 100 (2) (f) says the PIA may contain:-

"in respect of secured debts, subject to sections 102 to 105, an arrangement for the treatment of the security and the satisfaction or restructuring of the secured debt."

It's clear from that that your example is indeed valid and I was seeing innumeracy where there was only my own ignorance.

What the thing boils down to then is that, subject to the agreement of both sides, there can be either a restructuring or a settlement of the debt.

In your example the debtor has the option of a PIA which means living carefully for 6 years, keeping the house and having €40k written down at the end or opting for bankruptcy which means living carefully for 3 years and losing the house but having the full €300k (less whatever is realised from sale of assets) wiped clean.

As with any negotiation there has to be something in it for both parties.

[PaddyJoe]

Who's going to decide if a mortgage is not being paid deliberately? I assume there would have to be a police investigation and a decision by the DPP's office?

CHARLIE WESTON, PERSONAL FINANCE EDITOR – 14 MAY 2013
PEOPLE who deliberately do not pay their mortgages in the hope of securing debt deals will be prosecuted, the head of the new insolvency service said.
So-called strategic defaulters face fines of up to €10,000 or could end up being jailed for five years, head of the Insolvency Service Lorcan O’Connor said
http://www.independent.ie/business/irish/people-who-deliberately-dont-pay-mortgages-will-be-prosecuted-29265737.html

I don't recall any Garda investigations into whether NAMA developers are deliberately avoiding paying down their debts so I wouldn't hold my breath on this one.

[C. Flower]

Who's going to decide if a mortgage is not being paid deliberately? I assume there would have to be a police investigation and a decision by the DPP's office?

http://www.independent.ie/business/irish/people-who-deliberately-dont-pay-mortgages-will-be-prosecuted-29265737.html

I don't recall any Garda investigations into whether NAMA developers are deliberately avoiding paying down their debts so I wouldn't hold my breath on this one.

Nama could convert some of its many empty structures into new Debtors' Prisoners.

I still think that the best bet for people in debt is to form a large group and employ some full time salaried legal advice.

There must be some bright young legal graduates who would like to take this on.

I can see no reason why anyone who go anywhere near this nonsense if they could possibly avoid it.

[The Moth]

This waste of time legislation will sink like a stone. I cannot understand who it is aimed at unless it is a device as Ang said, to allow the banks get around the new capital requirements - a sort of pretend system. This Government keep bringing in daft schemes to make it look like they are doing something, Solas, jobbridge, incentives for small businesses to employ etc., subventions but try an apply for anything and there are so many hoops you give up in despair. I pity anyone trying to use this insolvency system, it is hopeless. The mortgage crisis is accelerating down the track and still no solutions.