I have a property in Ireland in negative equity. Would bankruptcy be an option? What are the consequences?
Properties in negative equity are not lost in bankruptcy provided mortgage payments are maintained. The Trustee / Official Receiver registers his interest in the property on the Land Registry, then reviews the position 27 months later.
On the other hand, Irish properties are often in serious negative equity and you may wish to forfeit the property and include the shortfall in the bankruptcy. The Insolvency Service would advise the Irish mortgage holder and they would be obliged to comply under EU law.
Please note that the insolvency laws in Northern Ireland and the Republic of Ireland are very different. In Northern Ireland, the laws are almost identical to those in England and Wales i.e. 12 months in bankruptcy, but in the Republic of Ireland bankruptcy lasts for 3 years. For this reason, people considering bankruptcy in the Republic of Ireland often choose to relocate north of the border or to England / Wales.
Provided it is clear that this is a permanent move and that the ‘Centre of Main Interests (COMI)’ is now in the chosen area, it would be possible to proceed using the more lenient insolvency laws. We have helped countless people from the Republic of Ireland over the years, so give us a call and we’ll talk you through it. We weren’t clear as to whether you had already relocated or were simply considering it.
Bankruptcy UK has been helping people with bankruptcy since 1998 and will guide you through the process step by step. We will avoid jargon and confirm all discussions by email within 30 minutes. Call us for a chat about your circumstances on 01425 600129.