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

[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/featur...is-a-disgrace/

[C. Flower]

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

http://www.stephendonnelly.ie/featur...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...1417&&CatID=59

Mortgage "decision-tree" here.

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

Minister Shatter's statement:

http://www.oireachtas.ie/viewdoc.asp...1417&&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/20...y-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...mo-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...mo-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.