Bankruptcy is proving popular for a fresh start


All of our 20 clients who have gone through the bankruptcy process since the beginning of 2014 have expressed delight with their new found debt freedom.

Assignee meetings

After a few initial hiccups with bank accounts all has been plain sailing. Assignee meetings have take place for some of the people which have been conducted in a very professional and understanding manner by the ISI bankruptcy staff. These meetings have been very straight forward with all of the necessary information being supplied to the ISI by NEO Financial prior to the meeting making the meeting as short and painless as possible. There has been some emotion and tears both expressions of relief that the debt stress is now over!

Family Homes

Some people have already sold their family home so for them there has been on issue regarding trying to keep the family home. However, any negative equity remaining after the sale of the family home is now gone.

For those who wish to keep the family home that has not been a problem for the clients who are in this position. They were given clear advice on the process and the fact that they were able to keep up any mortgage payments has been vital in the process. There was no equity in the family homes that are being retained and so the assignee has no interest in confirming his interest in the home. Arrangements are being made to have the assignees interest passed back to the owners with legal fees having to be paid for the paperwork to be completed.

Income

For all of the clients who were made bankrupt their income was less than the reasonable living expenses guidelines as outlined by the ISI for families of their size and make up so there is no question of any payment order being made and unless there is a very significant change in circumstances there will be no such payment order during the 3 years in bankruptcy.

It has been important for us to point out to clients that eh bankruptcy period is 3 years and not 5 as some opponents to bankruptcy keep pointing out. The period can be extended if the circumstances permit. These circumstances are limited in nature and would not apply to many people.

Independent Advice

I cannot stress how important independent advice and plenty of knowledge is the key to a successful debt resolution process. And in a lot of cases solutions like PIA or DSA extending over 5-7 years are not practical nor in the interest of the Debtor and therefore should be avoided.

Liberation

Bankruptcy can be and has been for many this year already the liberator they are looking for. It can be liberation from the shackles of debt, banks, unscrupulous debt collection agencies and solicitors. The bankruptcy process and the assignee is there to assist the debtor and keep unscrupulous creditors away from the debtors. Once a client enters bankruptcy the creditors are not allowed to contact the debt and protection is in place. This alone, for many debtors has been a relief and stress reliever.

 

Paul C Carroll

Bankruptcy and Insolvency Partner

NEO Financial

www.NEOFinancial.ie

Phone: 01 437 0908

 

Personal Insolvency guidelines Launched


Last week we saw the official launch of the Insolvency Service of Ireland which included the new web site www.isi.gov.ie, ISI information line, guides to the three types of insolvency, guidelines on reasonable standard of living, expenses for insolvent debtors and limited information on authorisation and regulation of insolvency practitioners.
The living expenses guidelines have been widely leaked over the past few weeks as I have previously written there are no significant changes from the leaked details. However, emphasis has been stressed on the flexibility of the guidelines based on the personal and family circumstances of the Debtor. There is a section in the guidelines, which discusses “special circumstances” which may apply to a debtor when the PIP is assessing reasonable expenses. Such special circumstances could apply to someone who has an elderly relative living with them.

Clarification of the allow ability of childcare expenses was given after the recent leaks. As Enda Kenny recently said in the Dail there is no question of childcare expenses not being allowed for a person applying for an insolvency arrangement. Minister Shatter confirmed this today at the launch and denied any political pressure to change that particular section.

The website includes examples of the three types of debt settlement – Debt Relief Certificate, (DRC), Debt Settlement Arrangement (DSA) and http://www.isi.gov.ie/en/ISI/Pages/PIA (PIA).

In one of the examples it is suggested that a debtor would receive a write off of 40% of a home loan whilst keeping the home. When I asked the minister about this and his confidence that banks would agree to such an agreement he assured me that banks would fall into line, that they will work the legalisation and he himself will be keeping a watchful brief on what they are doing.

The guidelines on Reasonable Living Expenses (RLE) address the issue of what are reasonable expenses when assessing a debtor’s disposable income. This will determine what they will be able to pay to creditors for the duration of the agreement. There is little change to the expense levels, which have already been discussed in previous articles here by myself and others. The head of ISI Lorcan O’Connor was at pains to point it that the guidelines for reasonable expenses are just that, guidelines to assess what people can afford to pay creditors. There is no question of expenses being micro managed as this is in nobody’s interest.
The launch included for the first time limited information on who will qualify to be a Personal Insolvency Practitioner (PIP), how they will become authorised and what regulation they will be subject too. There is a provision in the Act that all practitioners must have an indemnity bond in place of €600,000 to protect debtors and creditors from malpractice by the PIP.

However, these details have yet to be finalised. The PIP will also have to have experience in insolvency and will have to complete an exam in the insolvency process. A potential shortage of such suitably qualified professionals may be an issue in the short term.

It is clear that from the outset of this process the PIP is going to be a vital part of this process and will have significant input into the success of any arrangement and the overall success of the insolvency service.

Throughout the launch both Minister Shatter and Lorcan O’Connor were at pains to point out that the insolvency process is about putting people back into a solvent position in a fair, flexible and equitable way.
So the information and guidelines have finally arrived now it is time for the real work to begin and for the ISI to get up and running. It was confirmed that the ISI will be up and running at the end of June and they will have appointed the first PIPS at the beginning of June. Let’s hope they are ready to cope with the inevitable rush of debtors they are going to be faced with for the foreseeable future!

For those who have been suffering from this financial cancer there is now light at the end of the tunnel even if the light is up to 6 years away. The shame of all this is that if the problem was addressed appropriately 5 years ago people would at this stage be out of the process and who knows how our economy would have recovered by now.

Bully Boy Banks I have been a victim too!!


Bully Boy Banks I have been a victim too!!

 

Are you being bullied by your bank? Well it would seem you are not alone. According to an article in The Independent today by Charlie Weston banks are trying to set spending levels for their customers who happen to be in trouble with their mortgages.

Like every bully when allowed to carry on their oppressive and aggressive tactics they will thrive. They pray on the weak and vulnerable who feel they have not got the position of strength to stand up to the bully. The bully will pray on this perceived position of weakness and will push to endless limits with sometimes fatal consequences.

I am afraid to say I have myself been the subject of such bullying from the very same banks who I challenge on behalf of our clients every day. I say “I am afraid to say” because I know now the only day to deal with them is to stand up to them, bully them back, tell them to get lost and take control back by telling them what you are prepared to do rather then what they want.

My personal experience has thought me a great lesson in dealing with the bully and how to overcome their oppression. They hate anyone who will stand up to them. When your weakness becomes your strength they run, they become passive and simply skulk off looking for another victim.

Banks are no different, stand up to them, push back and they will back down. So do not let them tell you what you can spend, who you can pay, where you can live. These are your choices and for you to decide. The bank only have their interests at heart, you however, have to consider your family, your future, your health and your future financial security. The path you take should be with these in mind and not what he Bank considers you should do.

So do not let the bully have its way. Stand strong because it is your life and your family.

They are being taken on and people are winning so become a winner today!

Paul C Carroll FCCA

www.neofinancialsolutions.com

AIB Interest rate Increase part of the Enda Kenny “Celtic Comeback”??


The increase by AIB in their mortgage interest rates last week is another element of the scam that is continuing in this country by the elite professional and political classes. These classes are described so well in the recently published book by Shane Ross and Nick Webb The Untouchables.

Another element of the scam is that we must continue to pretend that things are getting better in Ireland. The economy is recovering, people are slowly recovering, property prices are stabilising, unemployment is stabilising, etc..  This is being peddled because it is important for “the Untouchables” to create this illusion about Ireland being the Good Boy in the class of austerity so their position of overpaid offices and professional fees continues.

How on this earth can it be justified that the bank owned by the state is allowed to put up interest rates on people who are already struggling except for the creation of an illusion that AIB will recover. We all know that the increase in the interest rates will make AIB worse and not better. It will simply cause more people to fall into arrears. It may also cause some people to reflect on why at all they should be paying anything on a loan which is possibly in excess of 50% greater then the value of the property it is on! Why Bother? Why Bother?

It seems the chief driver of the scam is none other than our leader and poster boy of “the Celtic Comeback” Enda Kenny. He is on the front of Time Magazine peddling the comeback scam and today insists that AIB are right in increasing rates to ensure its recovery! What about the recovery of the people? What about the Celtic Comeback of the people? Or do the people not matter as long as AIB and the other Untouchables are looked after? Is that what Mr. Kenny considers a comeback? AIB, BIO, Anglo, PTSB, EBS and Nationwide can all have debt forgiveness but the ordinary person cannot that is a comeback? I do not think so Mr. Kenny!

In the interview by Mick Wallace TD on the Marion Finucane Show on RTE radio 1 he said that one of the things that strikes him most about the Dail is how out of touch most people are there! Well it seems he is right on that one and the more Mr. Kenny goes on about the comeback the more Mick Wallace is right! Somehow we need to drag these guys back into the real world. Let them sample the “comeback” and see how it feels!

There can be no comeback unless excess household debt is addressed, the real level mortgage arrears are admitted to and the national current account deficit is addressed.

Paul Carroll FCCA

www.neofinancialsolutions.com

Negative Equity Mortgages


We have seen some attempt for banks to suggest that in limited cased negative equity loans can be a solution to some peoples housing problems. In particular where a couple have been in a small apartment and now wish to move to a house or larger apartment for expanding family reasons. However, in many such cases the original apartment is in negative equity in other words what the apartment is sold for will not cover the outstanding mortgage. Some banks may suggest you carry this deficit on too the next mortgage in the new house. This is a complete disaster for the customer and only benefits the bank by not having to realise the loss on the loan. So what the bank wants the ordinary people to do is to take the loss while they, the Banks, have the customer on the hook for another 20 or 30 years! Do not let this happen to you EVER!