RTE television lately featured several Irish partners who were \ndrowning with debt basically because of having taken out vast mortgage \nloans at the height of the building bubble from 2005 to 2008. There are \ncertainly over 45,000 home mortgages now in arrears of three months or \ngreater in Ireland. Around an additional 35,000 homeowners have \nrenegotiated the repayment terms of their home loans through \nrescheduling of home loan payments, changing to interest only mortgage \nloans, prolonging the timeframe of their home finance loan or agreeing a\n payment holiday with their mortgage loan providers.<\/p>\n\n\n\n\n\n\n\n
It is evident that this is a significant issue caused or worsened \nwhen one or both partners have lost their position and therefore are \nliving, existing, surviving or just subsisting on social welfare \nbenefits only. The massive and continuing decline in building selling \nprices implies that a lot of the 80,000 plus cases already stated refer \nto houses in substantial negative equity. Plummeting residence prices \ncombined with diminished home loan repayments show that in many cases \nthe quantum of negative equity is escalating.<\/p>\n\n\n\n
A lot of couples live in limbo, fearing the time when they have (to \nendure) their day in court and experience the possible foreclosure of \ntheir homes. For some people, depending on who their mortgage loan \nprovider is, they may be able to take advantage of the government one \nyear moratorium on legal action for repossession. The government is now \nadditionally proposing to introduce a ‘deferred interest scheme’ (DIS) \nwhereby borrowers can defer paying back about one third of the interest \ncontent of their repayments for up to five years. Not all lenders \nhowever have agreed to this. Significantly Ulster Bank and KBC Bank who \nare not in the Irish Government’s guarantee scheme have stated that they\n will not sign up to the DIS scheme. Other lenders, particularly some of\n the so-called ‘sub-prime’ lenders have not yet clarified their stance.<\/p>\n\n\n\n
In the case of repossession, according to Irish law, any deficiency \nremains a debt that should be paid by the unfortunate couple, whether or\n not they underwent formal repossession procedures in court or just \nhanded back the keys and walked away. The total amount of the deficiency\n might not perhaps be known for some considerable time until the lender \nor building society sells the house indeed the selling expenses also \nbecome a part of the debt.<\/p>\n\n\n\n
So what is a couple to do short of winning the lottery, receiving a \nsubstantial inheritance or obtaining very well paid work? A practicable \nsolution which has not been aired very extensively by the Irish press is\n to emigrate and use the laws and regulations of another member country \nof the European Union to write off the deficiency in addition to any \nother unsecured debt that the couple may have. OK, not everybody wants \nto emigrate but perhaps an unemployed couple, especially if they have no\n dependent children or other family ties or responsibilities, can at any\n rate go through the pros and cons of such a unquestionably drastic \nremedy. It may even be that in due course they would need to emigrate in\n any event. So, how does it work and what do you have to do?<\/p>\n\n\n\n
The free mobility of labour in the Eu has many unanticipated \nadvantages for citizens of member states, in particular when they are \noverburdened by debt and threatened with hostile insolvency proceedings.\n In the UK the legislative framework for dealing with debt is most \ndefinitely appealing compared to that in other member states. The Uk \ngives borrowers a second chance and an possiblity to rehabilitate \nthemselves, whilst in certain Eu member countries the predominant legal \nand social way of life could very well aim to penalize the insolvent \nborrower.<\/p>\n\n\n\n
European laws permit the insolvency laws of one member country to \napply in any other subject to certain provisos. One of the features of \ncross-border insolvency is that debtors can aim to start proceedings in \nanother nation of the European union that has insolvency laws a good \ndeal more favourable for their particular circumstances compared to what\n they might hope to get in their own ‘home’ jurisdiction. This trend is \nsometimes referred to as “forum shopping”. This means that a debtor who \ndwells in any member country can probably submit an Individual Voluntary\n Arrangement (IVA) or perhaps petition for bankruptcy or indeed go after\n some other type of legal solution to their debt problems in the united \nkingdom – so long as the uk is their “centre of main interests”. The \ndefinition of the expression “centre of main interests” or COMI is of \ncourse key to the issue. At this time there is no definition of COMI \napart from the relevant Eu Regulation states that “the centre of main \ninterests should correspond to the place where the borrower performs the\n administration of his interests on a regular basis and is therefore \nascertainable by third parties”.<\/p>\n\n\n\n
The normal understanding of this is that the COMI will be the nation \nin which the borrower mainly carries out their trade, profession or \nself-employment. Where the debtor does not trade or carry on a \nprofession, the COMI is usually reckoned to be the country where he or \nshe resides. If the debtor lives in one nation and trades in another, \nthe COMI is the country where the debtor trades. Where the person’s only\n connection with a state is that they work there on a non self-employed \nbasis (perhaps, commuting from a neighbouring country), then the COMI \nwill generally be in the nation in which they reside and consequently \npay bills, manage a bank account, purchase merchandise and so on. For \nhow long would one have to live (and if possible work) in the united \nkingdom to establish one’s COMI there? It is usually deemed that six \nmonths or more is enough but there is no conclusive answer to this.<\/p>\n\n\n\n
In the case of bankruptcy proceedings, the COMI is determined at the \ndate when the bankruptcy petition is presented and not where, \nhistorically, the relevant (e.g. borrowing) activity was carried out. In\n the UK a borrower may petition for his or her own bankruptcy, even \nthough in many cases it is a creditor who does it. The total cost is \nabout 600 and discharge normally takes place in 12 months. The place of \nbusiness of creditors and the state in which debts were sustained are \nnot material factors in determining a COMI. Oddly enough, although not \nrelevant to personal insolvency is that in the case of a company, the \nCOMI is the registered office, in the absence of proof to the contrary.<\/p>\n\n\n\n
How about an IVA? This kind of option also is available to the \nhypothetical couple from Ireland but in this scenario 75% of the \n(presumed to be all Irish) creditors must approve the IVA proposal. They\n may often do so as long as they are satisfied with the debtor’s \ncapacity to observe the terms. Remember too that an IVA in the UK is \nlimited to England, Wales and Northern Ireland. For Scotland the broadly\n equivalent insolvency solution is a Trust Deed. Remember, even if \nlenders reject the IVA proposal, the bankruptcy remedy still continues \nand in the UK this is now a very benign option, even though the effects \non a person’s credit rating can be serious and will last as much as six \nyears, even though the bankruptcy itself only lasts for twelve months. \nAny Irish people pondering either bankruptcy in the UK or indeed an IVA \nor any other financial solution to their indebtedness must obtain \nguidance from an insolvency expert and they would also be strongly \nadvised to get independent legal advice before going after such \nremedies.<\/p>\n","protected":false},"excerpt":{"rendered":"
RTE television lately featured several Irish partners who were drowning with debt basically because of having taken out vast mortgage loans at the height of the building bubble from 2005 to 2008. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-12665","post","type-post","status-publish","format-standard","hentry","category-general-debt-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=12665"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12665\/revisions"}],"predecessor-version":[{"id":12670,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12665\/revisions\/12670"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=12665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=12665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=12665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}