Debt Problems

Things do go wrong in life. No matter how well you plan your household finances or a business project, the unforeseen can happen.

In Ireland at present, the massive problem is negative equity on homes. Houses and apartments bought at the height of the building boom in Ireland with 100% mortgages are now worth half their value. The mortgage lending structure in Ireland is totally in favour of the banks and building societies in that the loans you take out with your home as the security are known as “recourse” loans. In most of Europe and USA, home loans are “non-recourse” which means the lender has only got recourse to repossess the security in the event of default. In Ireland however, if the value of the security is less than you owe on the property, the lender can chase you personally for the balance and make you bankrupt. It is not a case of just giving the keys back to the bank or building society and walking away.