Debt Write-Offs - Not Just A Fairy Tale...
Seven years after the global financial crisis and property crash, many people across Northern Ireland continue to struggle with over 68,000 homes still in negative equity. Recent news stories about the economic recovery of late offer little reassurance to those affected.
In our experience, debt has been an enormous source of anxiety and stress, with many people feeling like they will never be free of their financial burdens, and on many occasions this can manifest itself in illness for those involved. Against this backdrop, claims of debt write-offs can sound like a fairy tale. When high figure loans are forgiven or significantly restructured, it's hard not to wonder what the catch is.
The truth is that there is no catch; it's all a matter of mediation and negotiation. Debt can be managed if you tackle the problem head on and create a plan. GDP can help you find a solution. We have mediated a significant number of debt write-offs since 2011 and in the last few weeks have achieved some fantastic results.
How is this possible? Well, two clients are delighted to share their success stories. In one case, Barbara* had purchased a buy-to-let property when the property market was in better shape. Through no fault of her own, the property value dropped significantly after purchase, and the house was worth a fraction of the mortgage. She was in negative equity.
Barbara wanted to sell the house, but because of the negative equity, she would still owe the bank £40,000 after the sale. She could not afford to pay the £40,000 shortfall debt, so she asked GDP Equity Experts to help her negotiate an agreement with her bank.
GDP Equity Experts helped Barbara demonstrate that the £40,000 was impossible for her to repay. Instead, Barbara proposed making a full and final settlement payment of £500 against the debt. The remaining £39,500 was forgiven. This was clearly a better arrangement for Barbara, and we got the bank to accept the terms.
The bank understood that Barbara could not repay all of her debt, but repaying some of it was the best they could hope for in the circumstances. The bank accepted her proposal, and Barbara was debt-free. This is the crux of debt renegotiation. In our experience, a bank will accept the best offer if it is presented openly, willingly and transparently.
This is the same principle that helped us achieve £670,000 of debt write-off for another client. John* owed the bank £700,000 after the sale of 11 buy-to-let properties. After full disclosure of his circumstances, GDP Equity Experts negotiated a full and final settlement of £30,000. The bank accepted and John was debt free. This was life changing for John and his family.
GDP does not work for banks – unique in this field. We are experts at mediating and negotiating with institutions on behalf of our clients.
If you find yourself in negative equity or other debt, bankruptcy is not your only option. These two examples are real cases that GDP resolved last month. Debt write-offs are not a fairy tale, but with a bit of help, you can achieve your happily ever after.
*All names have been changed to protect the identity of the bank and the borrower
NB: A client's personal circumstances dictate the level of mediated full and final settlement achievable. Please note that your Credit Rating may or may not be affected.