Mr. C had 5 properties in Belfast, with total borrowings of more than £1 Million. All of his properties were in negative equity and all his loans were on an Interest Only basis. He had to make a monthly contribution on top of rental income in order to meet his mortgage payments. Due to the downturn in the economy his situation had become unsustainable.
A local estate agent was appointed to market all the properties, which were sold for a total of £651,000.
In order to address the shortfall of £349,000, a lump sum IVA was proposed through PKF-FPM with a contribution of £15,000. This arrangement was accepted by creditors, writing off approximately 96% of his debt.
Lender: Alliance & Leicester – Informal Settlement
Our clients had an outstanding mortgage of £152,000 on a property worth £42,000, having purchased the property in 2006.
Due to a separation, they needed to dispose of the property, as neither of them were in a position to afford the mortgage on their own. They were also concerned about interest rates increasing.
We enlisted a local estate agent who sold the property for £42,000 building in estate agents fees & solicitor costs.
We then negotiated an informal settlement with Alliance & Leicester, who accepted a lump sum payment of £10,000 in full and final settlement
Location: UK & NI
Mr M had a large portfolio, with substantial negative equity in his Northern Ireland properties. This project required extensive negotiation, with insolvency and legal advice, but produced a very innovative solution.
The client was able to retain the profitable UK element of his portfolio and continue to manage these properties, which were not in negative equity.
A number of his Northern Ireland properties were sold, with the residual debt due to negative equity being addressed through an IVA proposal.
The remaining Northern Ireland properties were retained, with the mortgages being written down to current market value and the negative equity included in the IVA.
The client now has a profitable portfolio and is again solvent.
Lender: NRAM – Informal Settlement
Location: Newcastle (UK)
Mr. O is a self employed tradesman from Co.Down. He had a property in the UK (Newcastle) with negative equity of around £45,000.
The Buy to Let property was causing him financial problems, with rental income not sufficient to support the mortgage and other payments.
He needed a solution which would dispose of the property and address the shortfall, but wanted to avoid bankruptcy or an IVA.
The property was sold through a UK based estate agent for £56,000, achieving full market value for the lender, leaving the shortfall of £45,000 as an unsecured debt.
A number of possible strategies for dealing with this debt were discussed with the lender, but we were eventually able to negotiate an informal full and final settlement for £4,000.