Just Go Bankrupt! *Update June 2011 - Laws to change


#1

courts.ie/courts.ie/library3 … endocument


#2

Sounds like they would bleed ya dry taking your car, pension and some of your salary.

So what do you make of this bit (from above)


#3

If you only have to pay half back then whats to stop mass bankruptcies?
Someone tell me Im missing something here
What am I leaving out? If you need only pay them 50% back then I see no reason why we will not have waves of bankruptcies


#4

Well, you only need to pay back 50%, but you will not be able to get any financing for 12 years, you lose pretty much all your salary (over a living allowance), all your pension, all your assets pretty much.

That being said, if you owe 700k on a 300k house, it may be worth while.


#5

The thing about not getting any financing for the next 12 years is the bit that concerns most people, I think. Would this be the case if there were masses of bankrupts in need of finance?


#6

12 years lads or 40 years being unable to afford to get a loan anyway


#7

They’d just introduce Subprime to Ireland.
We’ve never had it before you know…

-Rd


#8

Batoneffect,
if you put some of your hard earned income into a property could’nt afford the payments for whatever reason and had to walk away would it not be better if the law was on your side to some degree and not just out to “lynch you”?

What I mean by that is would’nt it be better if the banks had to shoulder some of the responsibility for lending, something they have avoided so far during the bubble? I.e. if they could’nt touch you for sending “jingle mail” in the post they would not be so keen to throw their money around.

The obvious result of this is it works against a bubble forming and ensures people get a fair shake instead of having a licence to screw every last penny out of you for 40 years.


#9

I see what your gettin at and maybe it would entice them to calm down lending but isnt it easier to walk away in the states yet they have mental numbers of reposessions etc - I really dont know enough about either to draw comparisons. Maybe someone else can! :confused:


#10

Anyone who considers bankruptcy an easy option needs a slap across the face. A few of my clients experienced it in the past, and trust me, you DONT wanna go there !


#11

Oh, the inside scoop. so what happens in reality? Do people just give up trying to earn?


#12

People were not marched into banks at gunpoint and forced to borrow.


#13

Except, look at what’s gone on in the US.

The problem there was that the people selling the mortgages were totally focussed on selling mortgages. The more mortgages they sold, the more commi$$ion they got paid. Whether or not any of those mortgages would ever be repaid becomes someone else’s problem.

In the IT industry, the sub-prime crisis would be described as ‘a post sales issue’. :slight_smile:


#14

That Law isn’t out to lynch anyone. Up until now, and still now to a great extent, the Law does everything it can to make sure you stay in your house.

Up until now when the numbers involved were small, the banks often did everything in their power to make sure you stayed in the house.

the numbers involved are now growing so rapidly that the banks have a legitimate concern that they may become owners and landlords of a very significant chunk of the countries housing, and the banks are not fools, they know that property is not an asset that you want a major exposure to right now. They also know that cash is something they really need, so they’re pushing to get bad mortgages off their books to an extent that they didn’t before.

They do shoulder responsibility. If you think the banks can walk away from this without losing money then you haven’t been watching the news.
By the time it gets as far as the courts the bank has already lost money and is shouldering some of the blame.

I don’t think banks should be able to add on thousands of euro’s in legal fees to a relatively small bill, that’s a recipe for ensuring that there’s no happy ending for anyone, and it’s an attempt by the bank to grap as much extra as they can.

Perhaps if he maximum legal costs that could be awarded was pegged to the size of the arrears then you might see the banks being a bit more helpful to people with smaller arrears.

Not necessarily. The question of lending practices and how the banks behave in a boom is completely separate from the question of how they behave in a bust. It’s sad but tue, business is short sighted. Take what you can when you can, and hope someone else is sitting in your chair when it goes tits up.

-Rd


#15

Completely the opposite.
You bust your balls to pay off the debt as soon as possible. 2 or 3 jobs are often necessary.
You also live entirely without any form of credit, wheather loans or cards.
It also entails selling everything you have and being forced to live with friends and/or relatives for as long as nexessary.
It is NOT a road you voluntarily want to go down.


#16

johnboy wrote

People were not marched into banks at gunpoint and forced to borrow.

Reply

Thats correct they walk into a bank looking for advice on a mortgage and are shafted into a mortgage over 40years with a mortgage protection policy including serious illness cover costing an arm and a leg then told they have to have mortgage repayment protection to get the mortgage and also have their buildings and contents cover with the bank.

Get real for f***sake, the amount of sharp practice in the banking industry in this country is horrendous and anyone that says different is either stupid or a VI.


#17

xman wrote;
spqr64 wrote:
if they could’nt touch you for sending “jingle mail” in the post they would not be so keen to throw their money around.

Except, look at what’s gone on in the US.

The problem there was that the people selling the mortgages were totally focussed on selling mortgages. The more mortgages they sold, the more commi$$ion they got paid. Whether or not any of those mortgages would ever be repaid becomes someone else’s problem.

Reply;
I quite agree with you in relation to the sale of a mortgage as a product but what I am talking about is “responsible lending” were the burden of responsibility is shared by both i.e. no 100% mortgages, the purchaser has to put up a %age to show they are serious and that should ensure to some degree that they are not so keen to run away if things get tough.


#18

But the borrowers have to take responsibility for their actions. How did they walk out of a bank knowing that at least 40% of their net salary is spoken for over the next 40 years and feel comfortable about the situation? And also remember that many people lied about their salaries in order to get a loan in the first place - where is the sharp banking practice here?

EVERYONE is to blame. I just cannot accept that the general populace were hoodwinked by a bunch of shrewd and cynical bankers. Many borrowers knew that they were over-extending themselves. Many people borrowed only to consume in a conspicuous manner.


#19

Quote:
if you put some of your hard earned income into a property could’nt afford the payments for whatever reason and had to walk away would it not be better if the law was on your side to some degree and not just out to “lynch you”?

That Law isn’t out to lynch anyone. Up until now, and still now to a great extent, the Law does everything it can to make sure you stay in your house.

Up until now when the numbers involved were small, the banks often did everything in their power to make sure you stayed in the house.

the numbers involved are now growing so rapidly that the banks have a legitimate concern that they may become owners and landlords of a very significant chunk of the countries housing, and the banks are not fools, they know that property is not an asset that you want a major exposure to right now. They also know that cash is something they really need, so they’re pushing to get bad mortgages off their books to an extent that they didn’t before.

Quote:
What I mean by that is would’nt it be better if the banks had to shoulder some of the responsibility for lending,

They do shoulder responsibility. If you think the banks can walk away from this without losing money then you haven’t been watching the news.
By the time it gets as far as the courts the bank has already lost money and is shouldering some of the blame.

I don’t think banks should be able to add on thousands of euro’s in legal fees to a relatively small bill, that’s a recipe for ensuring that there’s no happy ending for anyone, and it’s an attempt by the bank to grap as much extra as they can.

Perhaps if he maximum legal costs that could be awarded was pegged to the size of the arrears then you might see the banks being a bit more helpful to people with smaller arrears.

Quote:
The obvious result of this is it works against a bubble forming and ensures people get a fair shake instead of having a licence to screw every last penny out of you for 40 years.

Not necessarily. The question of lending practices and how the banks behave in a boom is completely separate from the question of how they behave in a bust. It’s sad but tue, business is short sighted. Take what you can when you can, and hope someone else is sitting in your chair when it goes tits up.

-Rd

daltonr said;

the law isnt out to lynch anyone as a quote

Reply;
the laws in this country are archaic in respect of this because as usual in this country if nothing is said nothing will change, Irish people only change when change is forced or their back is against the wall.

daltonr said

They do shoulder responsibility. If you think the banks can walk away from this without losing money then you haven’t been watching the news.
By the time it gets as far as the courts the bank has already lost money and is shouldering some of the blame.

I don’t think banks should be able to add on thousands of euro’s in legal fees to a relatively small bill, that’s a recipe for ensuring that there’s no happy ending for anyone, and it’s an attempt by the bank to grap as much extra as they can.

Perhaps if he maximum legal costs that could be awarded was pegged to the size of the arrears then you might see the banks being a bit more helpful to people with smaller arrears.

Reply;

What I mean by shoulder responsibility is RESPONSIBLE LENDING not lining customers up like ducks and trying to push every concievable sale possible on them because they are vulnerable as has been common practice with first time buyers.

daltonr said;

Not necessarily. The question of lending practices and how the banks behave in a boom is completely separate from the question of how they behave in a bust. It’s sad but tue, business is short sighted. Take what you can when you can, and hope someone else is sitting in your chair when it goes tits up.

-Rd

Reply;
Thats funny banks look for continuity of employment, continuity of income, continuity of savings habits etc etc and then change the rules when it suits them, business may be short sighted and this is one of the things that would need to change to encourage responsible lending certainly among institutions that effect peoples lives from the cradle to the grave would’nt you agree?


#20

Yep, the worst moral hazard of all.

Fact is, capitalism requires deceit and dishonesty to work. Also it requires most businesses to force their employees to work many unpaid hours, without which the majority of businesses would fail; slavery is the term for unpaid work, isn’t it?

Once you factor out the profits gained by means of deceit and slavery, capitalism probably turns out to be less productive than democratic socialism.

It makes you wonder why the hell we, as a species let it go on, then you remember that we let monarchies rule the planet for 6000 years. So, hopefully, in 8008, we can hope for a decent system.