It’s a tricky subject. I believe that if someone presents their case to hand the keys back, and hands their property back in liveable condition (not with the kitchen/bathroom ripped out, walls with graffiti and generally in a really bad state) then they should be able to go debt free BUT they can’t then stay living in the place. The bank should be allowed to sell the property or rent it out. If the ex owners want to rent it out then great, but if they then default for months then they should be evicted. If you hand your keys back they shouldn’t make the people bankrupt for life but change it to be similar to other european countries, isn’t the UK 5 years? Ireland is 12 years I think?
Therefore you can have people who are in dire straits thrown a lifeline. It’s so sad to see stories of people jumping off balconies etc. If you hand your keys back you also shouldn’t be allowed to just go out and buy a cheaper place, the bankruptcy time should then enable people to live in rental accommodation, keep their heads down, save up and in ten years they can start again with a mortgage if they wish so. It’s criminal to make people bankrupt for life. People make mistakes, the bankers are getting bailed out and the public get a life sentence. A bit of common sense is what is needed.
The trouble is there is a certain ‘type’ who would still get around this, the ‘i’m a person too and we deserve a house’….. (cue flamenco music……). Yes, but you also need to pay for it…. too many got too much credit and haven’t even tried to pay their way. They haven’t even paid in 10 euros in years for their mortgage so they should be evicted and forced to look for rental accommodation. Letting them stay in their own ‘home’ but only if they pay their rent on time.
Everyone should have rights, not just the rich and the bottom rung who shout the loudest. There are those in the middle who are busting a gut to pay whatever they can to keep the bank happy and they still hound for more money… they are the only ones who have to pay it seems? That is the major problem with the evictions, certain types who then block the sales of repo properties so it continues with this vicious circle with everyone not knowing what to do? Who in their right mind would buy a place which has squatters left right and centre… even if it was priced at 1000 euros I wouldn’t touch it with a barge pole…… The Government has to make some harsh decisions I think…starting with the banks.
I can only tell you that in many countries “Sweden for example” there is this sort of “help” to go bankrupt but it’s still up to the creditors to say yes or no. Often what is the case is that only the real dousche bags that creditors say yes to because they know they will never be able to get their hands on a penny of their money if they don’t approve it.
Normal people that wants to do the right thing are never allowed this because the creditors knows they will do their best to repay their debt no matter how long it takes. I have met people that still owe the creditors 200-400k euros and nothing to show for it that they have been paying of since our last crisis during the 90s. If I was in their position back then I would have just refused and left the country.
IMO a creditor should only be able to go after the underlying “resource” of the loan. In these cases the houses and then nothing else.