PERSONAL AND CORPORATE INSOLVENCY EUGENE MCDARBY 05022016 An
PERSONAL AND CORPORATE INSOLVENCY EUGENE MCDARBY 05/02/2016 An independent member of UHY International www. uhyinsolvency. ie
AGENDA SUMMARY • Background • Case Study • Creditor Information • Points of Interest • New case Live life free from stressful debt An independent member of UHY International 2
INFORMAL / FORMAL BANK PROPOSALS Ø Historical Debt Landscape: Ø Creditor Linear approach to debt. Ø “Whoever shouts loudest get paid first” – unsecured creditors Ø Interest only or restructured deals on mortgage Ø Legal route Ø hard to achieve debt write offs with banks preference of banks was to ‘park residual debt’ or judgement mortgage. Ø Core reason for High level of Mortgage arrears. Ø Central bank/ MARP/CCMA Ø The new Personal Insolvency Act now represents an opportunity to enter into informal/formal settlements with lenders on all forms of debt. Ø The psyche is beginning to change-Debt write off now accepted – other jurisdictions Ø The new insolvency structure can act as a baseline for any agreement with the bank. Ø Possible Asset Disposal Strategy-perhaps with DSA/PIA to complete (multiple creditors) or multiple variations of same based on affordability. Live life free from stressful debt An independent member of UHY International 3
CASES Practical approved examples: • Michael and Sarah – Dublin – PIA − Car Retailer − Family home is now a BTL − € 189, 000 unsecured debts – debt with brother!!! • Christy – Dublin – DSA − Haulage Contractor − 4 properties including family home − € 278, 000 unsecured debts Live life free from stressful debt An independent member of UHY International 4
PERSONAL INSOLVENCY ARRANGEMENT § Secured debts: −UB Loan € 349 k on property valued at € 300 § RIP € 1200 pm agreed at a reduced interest rate of 1. 5% −Various Unsecured total € 189 k § 6 year dividend agreed at 16. 37% ( € 640 pm ) § VS Bankruptcy at 0% ? ? ? return for unsecured creditors and sale of property Live life free from stressful debt An independent member of UHY International
DEBT SETTLEMENT ARRANGEMENT Secured Debts of € 1. 238 M on 4 properties all sustainable Unsecured debts of € 279 k Deal agreed at 18. 6% dividend over 5 years ( € 980. 52) Vs Bankruptcy at 0% ? ? for Unsecured Live life free from stressful debt An independent member of UHY International
INFORMATION Typical Information for bank agreement Proposal to include: ØCurrent financial position and history of debtor ØPresentation of options to the debtor including formal insolvency vs Bankruptcy ØPreparation of the Statement of affairs and estimated Outcome Statement of Various Options ØPresentation of outline proposal and demonstration how it is better for bank (both financially/non financially) ØFull traceability of assets (supported by independent valuations) Live life free from stressful debt An independent member of UHY International 7
POINTS TO NOTE • Repossession cases: § Loan sustainability § Land Conveyance act • PIP Fees • Debtor change of Circumstance • RLE’s – guideline • System needs to be less onerous Live life free from stressful debt An independent member of UHY International 8
NEW CASE Widowed Lady 67 • • • Family home and rental property on same site in Wicklow: Similar valuations circa € 600 k each Loan € 1. 4 k million tracker at 2. 4% Disabled son living at home Circa 40 k unsecured debts Earning circa € 3500 pm, mainly widows pension. • PTSB had issued demand notice and want sale of both properties to clear debts. • What options would you negotiate? ? Live life free from stressful debt An independent member of UHY International 9
CONTACT DETAILS Eugene Mc. Darby Personal Insolvency Practitioner Specialising in personal insolvency and debt issues: Many years experience in providing people in financial difficulties with practical advice Contact Eugene at eugene. mcdarby@uhyinsolvency. ie Live life free from stressful debt An independent member of UHY International 10
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