Taylor Solicitors Cork: The official word coming from virtually all banks is there is no “debt forgiveness”… mortgages have to be repaid in full.
But our experience at Taylor Solicitors Cork is that banks are open for negotiations.
In the past few days, a Bank of Ireland customer has secured a settlement on mortgage debt allowing her to repay the bank €18,000 – at a rate of €250 a month for six years – to settle an outstanding debt of €170,000. Under the agreed settlement the customer will not have to repay the remaining €152,000 but she will be prohibited from borrowing for six years and faces a €120,000 judgment if she fails to make the repayments.
Bank of Ireland has confirmed it doesn’t have a policy of debt forgiveness and deals with borrowers in arrears on a case-by-case basis. And in reality it is not as simple as handing back your keys and walking away. Having said that, there is no doubt that banks will increasingly be forced to accept less than they are owed on residential mortgages.
The key to success is to engage with the bank rather than waiting for legal action to commence. If you ignore the situation the bank will eventually find a solution through the Courts – but not a solution that will necessarily be in your favour.