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Advice Needed - Take out loan or go for multiple credit cards to raise 40K to buy back home
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Hi all,
Any advice would be very much appreciated - my situation is complicated, and here's a potted history. I am British but have lived in Ireland for many years. In 2005 I bought a house in Ireland, on 1.6 acres of land. In the crash of 2008, my finances and work went belly up, and after a long, drawn out battle with the banks, they took me to court in 2014 to repossess the house as I could not pay mortgage. I'd had enough, and agreed. I moved everything, knew I was facing financial ruin but anything better than facing the stress of dealing with banks, so I walked away from it, and moved into a tiny, rented studio apartment which is grotty but cheap. Anything but have the debt collectors breathing down my neck. I heard nothing more, until January 2018.
I got a phone call, form the bank, asking if I wanted to negotiate. I'd been thinking about financial insolvency etc, and thought they'd contacted me about debt repayment after selling my house (it was in serious negative equity after the crash). But no, it turns out that due to a bank error, the house was never repossessed. It's still in my name, massively damaged, squatters etc (I got rid of them with help from neighbours and police). I went to see a PIP, who suggested that the best thing to do, is to offer to pay the bank off at the current value of the house (I and then the bank had it valued at €50K), that they'd be likely to accept this, and walk away, debt free, with damaged house etc, but end of story with bank.
In the meantime, during the dry weather, I had percolation tests done on the land (it's off grid so no sewage system), and land passed, meaning I now have a site with 3 potential sites on it that I can sell and will pass the tests required for new builds. The local auctioneer has valued these at 50K each and 65K for the site with the house, so actually, the land is now worth €165K, though the bank don't know this and I won't be telling them.
If I manage to raise €50K, I can pay off the bank and be done with them. I can then sell off one site of 0.5 acres at 50K, which could take up to a year to sell, and pay off any debt from a loan or cards. I'll still be left with my house, and another site to sell if needed to pay for repairs etc.
I am trying to raise 50K, or 40 sterling to do this. I can raise €10K from my own funds, and am looking to borrow the rest, so probably £30K sterling.
In Ireland my credit rating is shot, but in the UK, I've been building up my rating, I'm on the electoral roll, I have one credit card with a limit of £3K (0% period is over though so can't use that) which I've been repaying regularly, and have just been approved for another one with a 0% rate for 36 months, with a limit of £4800. So I'm thinking I could raise the cash with cards, or try for a bank loan?
IF bank, should I go to my bank (Lloyds) and ask for a home improvement loan or tell them what's happening - surely not!? Is there a way of doing this with multiple credit cards? It's risky of course but I am fairly certain that the site would sell pretty fast as land to build on in this area in Ireland is hard to come by - although I'd need to factor in the risk.
Also, rather than paying back monthly instalments on a loan, it'd obviously suit me better to pay nothing until the land is sold, then the £30K in one go.
I know this is complicated, but after going through hell with the banks, repossession, facing bankrupsy etc this feels like a chance to pay off the bank, and still walk away with my albeit very damaged home, and be able to start again, debt free and never get into such a mess again. I'm 44 and realise that being off the housing ladder, and with a repossessed house etc, it's very very hard to get back on and the thought of living in rented accommodation for ever is not appealing.
Thanks for reading, if anyone has any advice or thoughts on the scenario I'm facing, I'd love to here from you.
Cheers, Cat
Any advice would be very much appreciated - my situation is complicated, and here's a potted history. I am British but have lived in Ireland for many years. In 2005 I bought a house in Ireland, on 1.6 acres of land. In the crash of 2008, my finances and work went belly up, and after a long, drawn out battle with the banks, they took me to court in 2014 to repossess the house as I could not pay mortgage. I'd had enough, and agreed. I moved everything, knew I was facing financial ruin but anything better than facing the stress of dealing with banks, so I walked away from it, and moved into a tiny, rented studio apartment which is grotty but cheap. Anything but have the debt collectors breathing down my neck. I heard nothing more, until January 2018.
I got a phone call, form the bank, asking if I wanted to negotiate. I'd been thinking about financial insolvency etc, and thought they'd contacted me about debt repayment after selling my house (it was in serious negative equity after the crash). But no, it turns out that due to a bank error, the house was never repossessed. It's still in my name, massively damaged, squatters etc (I got rid of them with help from neighbours and police). I went to see a PIP, who suggested that the best thing to do, is to offer to pay the bank off at the current value of the house (I and then the bank had it valued at €50K), that they'd be likely to accept this, and walk away, debt free, with damaged house etc, but end of story with bank.
In the meantime, during the dry weather, I had percolation tests done on the land (it's off grid so no sewage system), and land passed, meaning I now have a site with 3 potential sites on it that I can sell and will pass the tests required for new builds. The local auctioneer has valued these at 50K each and 65K for the site with the house, so actually, the land is now worth €165K, though the bank don't know this and I won't be telling them.
If I manage to raise €50K, I can pay off the bank and be done with them. I can then sell off one site of 0.5 acres at 50K, which could take up to a year to sell, and pay off any debt from a loan or cards. I'll still be left with my house, and another site to sell if needed to pay for repairs etc.
I am trying to raise 50K, or 40 sterling to do this. I can raise €10K from my own funds, and am looking to borrow the rest, so probably £30K sterling.
In Ireland my credit rating is shot, but in the UK, I've been building up my rating, I'm on the electoral roll, I have one credit card with a limit of £3K (0% period is over though so can't use that) which I've been repaying regularly, and have just been approved for another one with a 0% rate for 36 months, with a limit of £4800. So I'm thinking I could raise the cash with cards, or try for a bank loan?
IF bank, should I go to my bank (Lloyds) and ask for a home improvement loan or tell them what's happening - surely not!? Is there a way of doing this with multiple credit cards? It's risky of course but I am fairly certain that the site would sell pretty fast as land to build on in this area in Ireland is hard to come by - although I'd need to factor in the risk.
Also, rather than paying back monthly instalments on a loan, it'd obviously suit me better to pay nothing until the land is sold, then the £30K in one go.
I know this is complicated, but after going through hell with the banks, repossession, facing bankrupsy etc this feels like a chance to pay off the bank, and still walk away with my albeit very damaged home, and be able to start again, debt free and never get into such a mess again. I'm 44 and realise that being off the housing ladder, and with a repossessed house etc, it's very very hard to get back on and the thought of living in rented accommodation for ever is not appealing.
Thanks for reading, if anyone has any advice or thoughts on the scenario I'm facing, I'd love to here from you.
Cheers, Cat
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Comments
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Whats your annual income?0
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Did you get a CCJ (or Irish equivalent) or file for insolvency?
I don't think any lender would want to lend you £30k if they knew your true circumstances, so I suspect you won't be able to loan the money legitimately.0 -
Since it's still all in your name, is there any reason why you cannot just instruct the auctioneer to sell it, either as one plot or 3 separate plots, then pay the bank out of the proceeds?
Maybe set realistic reserves if this is a possibility?0 -
Thanks for the reply. Buying it back at 50k would mean the bank writing off years of arrears and negative equity. My current debt with them is €260k (90k of that clocking up whilst I was unaware the house was still in my name), they valued the house at 50k, due to crash and property losing so much value etc. so if they knew I had done percolation tests (increasing the value by €115k) and was selling plots of land they’d want any profits to put towards the debt. The only way out of that is an official write down and settlement with a PIP., which I’ve been advised I should my best bet as it means they have no hold in the property from then on.0
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No, nothing at all, though I’ve been waiting for it. I think there were so many of us in the same boat after the crash the banks are taking their time getting round to everyone, the fact that the house is still in my name with 210€k worth of bad debt associated with it means for sure my credit rating in Ireland is shot. I’m amazed that this hasn’t followed me to the uk, trying best to sort out by getting write down of debt and pip to arrange this, but need the 50k for settlement. Tricky. Thanks for your reply0
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Annual income is around 20k0
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You dont have a credit rating, well you do but lenders dont see it, lenders see your history. Cant see you getting the money you need on your annual income. Your wanting to borrow doible your income.0
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The Irish government should have taken some of the many billions of bailout funds provided by the EU and the UK to compensate people in your situation (of which I know quite a number) who are there due to a complete lack of regulation and greed (not yours) and naivety (possibly yours).
Unfortunately they did not. Sadly the government and the banks are only now starting to address this situation. This is typically the worst possible timing as they are about to slide into another crisis of the same magnitude for a different set of reasons with exactly the same outcome.IF this goes belly up again not only are you ruined in IRE but also in the UK - can't you move on, walk away?
This is a very good question. I can't help thinking you are throwing good money after bad.The views expressed here are my own. I am not a Solicitor nor am I affiliated with any of the parties I mention. If you disagree with any of my comments please say in whatever way feels most natural to you. No one self improves in a bubble!0 -
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