How likely is it that we can persuade Mars Capital to write off a small portion of our debt?


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Almost 15 years ago my parents took out a 15 year €220,000 mortgage to renovate my fathers old family home after my grandfather passed away. They used the proceeds of the sale of our family home to buy out the shares in the house of my fathers siblings inheritance.

During the recession they ran into arrears. 5 and a half years ago the EBS did a deal where my father paid X amount per month, it the mortgage would finish a year early but with an estimated outstanding balance of €99,000. In the interim dad managed to over pay now and again and the EBS sold our mortgage account to Mars Capital. So it was under Mars Capitals watch that the 5 year deal ended about 6 months ago but the outstanding balance at the end date turned put to be €88,000. Dad has continued to pay the same amount per month after the deal officially ended while he negotiated some kind of new repayment schedule. I think the balance right now 6 months after the deal ended is €85,000.

Mars new repayment offer was a 7 year term with an APR of 6.9% where he would end up paying €121,000 including interest.

While initially there was relief when he told us that Mars weren’t demanding the outstanding balance straightaway in one lump sum, ironically we quickly decided that we should actually help dad to do just that. He’ll be in his 80’s in 7 years! After all the interest he’s paid on this mortgage and the arrears over the years, it sticks in our craw to think of him having to pay another €36,000 in interest!

So one of my brothers made the very generous offer of loaning dad €45,000 interest free for 3 years and the max I can borrow is €33,000 over 5 years at 6.9% APR from An Post Money. Dad will have paid my brother back in 3 years with the same monthly instalments Mars were looking for. Dad then starts paying me those instalments. Now I’ll be able to make 3 monthly payments every month and clear the 60 month term load early by about month 43 and also save a grand or so of interest. Dad continues to pay me those instalments for another 21 months till I am paid back in full too.

So basically doing it this way means we get the house deeds back within weeks (ironically a few months earlier than if the mortgage had run its normal 15 year course.), dads finished paying everyone in just over 5 years and finally and most importantly he’ll have paid about €5,000 in interest on my An Post loan instead of €36,000 in interest to Mars Capital. Even if dad decided to then pay my brother a few more months of instalments at the end as interest for his €45,000 loan, we’d still have saved him €25,000 in interest.

The elephant in the room of course is that myself and my brother can only come up with a max of €78,000 but the current balance is €85,000.

So the question is do Vulture Funds like Mars want to close accounts they bought at huge discounts ASAP to get them off their books just like the originating banks did, in which case the might be amenable to some write off of part of the debt if the account holder can pay them a large lump sum quickly. Or would that not be an incentive to them and they’d actually prefer if we took the 7 year deal that earns them another €36,000 in interest over the full term?

If you think they would prefer it to be cleared straight away and are likely to be prepared to write off a portion of the debt, can you suggest any negotiation tactics to help us maximise the write off.

For example considering they probably bought the account from the EBS for 50c on the Euro and are already probably in profit, whats a realistic starting point for us? Tell them we can source €65,000, they counter offer a write off of €5000 to €80,000, we say we can maybe push it to €70,000, they say no but counter offer €75,000, we say….’DEAL!’ LOL

Is hoping for a €10,000 write off realistic or are we dreaming?

[EDIT 1] Thanks for all the advice yesterday folks. Now maybe the following is almost exactly what some suggested and I just misunderstood it yesterday, but the seeds were definitely planted by what many of you suggested. The idea I had today, was if they say NO to any significant writedown despite us leveraging a significant available lumpsum and immediate payment of same, is to then ask them to change the 7 Year Term to a 3 year Term where the total interest would be about E9,300. Dad pays them what he was going to pay them, I pay dad what I was going to be paying on an An Post loan anyway and my brother pays the same amount as me. He doesn't hand over any of his savings at all and I haven't taken out a new loan in my name. Combined those three amounts are the full monthly repayment of a 3 year E85,000 loan at 6.9% APR.

Mars fully paid back in 3 years instead of 7. Mars get to hold onto the deeds for another 3 years though. At the end of the Loan Dad owes both me and my brother about E23,000 each. He starts paying us back 650 each per month which takes him another 3 years. He's totally done and dusted in 6 years.

Compared to yesterdays plan/idea, we still saved about (36000-9300) E27,000 in interest as opposed to yesterdays plan which saved (36000-5000) E31000 in interest, , get the deeds back in 3 years instead of within weeks. However, didn't have to hand over savings or take out more loans and knocked 1 year off the amount of time dad would be paying back that monthly amount from 7 to 6 years. The only way I see that not being a goer is if Mars won't take me and my brothers monthly contribution to the repayment of the proposed 3 year loan into account because its not official income of dads and not guaranteed. What do you folks think of that alternate idea??

Theres Pro's and Cons to both plans. I've taken on board a lot of your concerns. Perhaps on balance it only makes sense to persue yesterdays plan where my brother is handing over a significant lump sum of savings and I borrow up to 33 grand to hand over, if we can use that significant combined lumpsum and immediate payment potential to leverage not just the shortfall from the 85000 we might have had but to leverage 15 or 20 grand of a write off......and most of you thought a 7 or 10 grand write-off was dreaming.

[EDIT 2] Unless Mars actually would prefer the likes of €65,000-€70,000 right now rather than €94,000 in 3 years earning them €9,000 interest or €121,000 in 7 years earning them €36,000 interest (unlikely I know), tbh they probably give an immediate definitive NO to a write off of anything knowing we have X amount to help dad out with over the next few years anyway. Upon further thought we’ve probably come full circle back to accepting the 7 year €85,000 loan and assuming there is no over or early payment fee, simply give dad €650 each per month which combined with his official payment would reduce the term to about 3 years and the interest paid to €9,000 anyway. Functionally the same as asking for an official 3 term but without them saying NO because our contribution wasn’t formal income of dads or guaranteed by us and it also gives us the freedom to skip a months payment to dad here or there if need be which wouldn’t be possible if we were to set the term as 3 years from the getgo.

[EDIT 3] The downside of talking to a 77 year old man with hearing issues. LOL. I arrived at a figure of E36,000 interest by multiplying the repayment amount dad said Mars wanted for the 7 year E85,000 loan of approx. E1,450 x 84 months = E121,800-E85,000=E36,800 in interest. However when I found a loan calculator that let me select more than the E75,000 limit most calcs had and also select my own interest rate figure (Turns out its 6.52% not 6.9% according to dad), for E85,000 loan it gave the following numbers, E1,263 per month, Total payable E106,094 and E21,094 interest. I validated the result of that calculator by running the same numbers through the An Post Money loan calculator too and the resulting repayment, total and interest figures where the same.

Probing dad further to try and reconcile this, I think whats happened is he said they told him according to their review of his financial statements given to them, they've worked out he can afford to pay them up to E1,450 per month (not that the repayments of E85,000 over 7 years at 6.52% would necessarily be that high.) He seems to have interpreted it as them telling him thats what the repayments would be. Anyway, this will be cleared up when they send him the 'loan offer' via post.

In the interest of not letting ourselves get too optimistic and trying to prepare in advance what to say when we ask for some write off, we've been running hypothetical scenarios, trying to put ourselves in their shoes. "If we say X and they say Y, we say A, however if they say Z we instead say B etc etc. After doing this running of scenarios, we had kind of convinced ourselves again that we didn't have a hope in hell of any write off at all.

EG. If we are coming out the gate asking for 20, 15 or 10 grand write-off by saying we have access to a 65- 75 grand lump sum, they might reason that they don't have to offer Dad any write off because his sons can just help him with repayments with that money instead and they still get their (corrected) E21,000 in interest over 7 years and considering Mars seem to be one of the Vulture funds in for the long haul, they might be happy to wait 7 years to get that full E106,000.

So we went to bed last night still planning to chance our arm (because it costs nothing to ask) and still ask for a write off of some of the balance owed, but with the expectation that there was a 95% chance they say No, and thus if we can't leverage a large lump sum for a write off, we definitely then proceed with the plan to just accept the E85,000 over 7 years loan offer and my brother and I don't hand over savings of and get loans for 10's of thousands to give to dad, instead we give him E500-E650 each a month to over pay the loan every month reducing its term to about 3 years and interest from E21,000 down to about E8,000.

....and this morning I woke up and my subconscious must have been still working on the problem while I was asleep, because my very first thought when I woke was the following: If dad at age 77 walked into any financial institution and asked for an E85,000 loan over 7 years he would get laughed at to his face. Frankly its amazing he even managed to secure a 15 year mortgage at an age of about 62 15 years ago!! So why 15 years later are Mars prepared to let him refinance that E85,000 outstanding balance owed to them over 7 years by the end of which if he lives that long he'll be 83 or 84 years old......because they think they have no other option to get their hands on the outstanding balance while he is still alive!! Their actuarial advisors/calculations are surely telling them that theres a reasonable chance dad will die before the loan is fully paid back. Surely they also know that dads kids can delay and stymie the sale of the house they are inheriting from dad in probate or court that this loan is secured on and where the loan to value ratio is by now probably, but definitely soon in single digits, for god knows how long. My point is, they may very well take all that into account and think to themselves that 1 in the hand is worth more than 2 in the bush so to speak. ie. Better to get E65,000-E75,000 within a couple of weeks and be done with this 77 year old 'Customer', than risk forcing him to take out the refinancing loan and risk have him go senile or die within the 7 year term and then suffer all the headaches and delays and potential legal costs in leveraging their 'Security' of the loan and trying to force the sale of the house to get the rest of the money back. (2 of us might actually want to get a mortgage on it to buy the other two siblings out of their inheritance and stay in the house ourselves (Kind of like dad did with his siblings when Grandad died)
@nyeung The elephant in the room is actually what happens if your dad can no longer come up with the new payments part way through the arrangement. All this work and in the end somebody might fall out with somebody else, while the third person is left holding the bag. Your dad is no spring chicken and you don't mention plans to retire (or to be retired). Who inherits the old family home that everybody sacrificed so much for? How will this impact you and your brother's own housing and credit needs?
@ivan57 3 of us and a partner are back living in the house after Mum died 18 months ago. The Mortgage life insurance policy only paid out what would have been left owed at the date of her death had the mortgage run its normal course, not what was actually still owed with all the arrears. That money was used to clear higher interest debt rightly or wrongly. We weren't exactly thinking straight at the time.

1 brother and his partner want to move into their own place as soon as financially possible for them so we've left them out of it. Myself and the other brother have no plans to move out for the next 5+ years and have no other loans or major outgoings. 1 of us more responsible with money and large with savings and one less responsible and with old legacy debt that needed to be cleared so no savings. Guess who was who? LOL.

House will be willed to the 4 of us equally which presents zero complication at all if both of us are paid back before dad dies. If heaven forbid he died before then, we can take what we are still owed into account when the inheritance value for each of us is calculated.

The reason dad hasn't retired is its a family business in which 3 of us also work. He' really doesn't have to do much at all any more. Retired in all but name in other words. Can't hand the business over officially where his reported income would drop to his pension amount with all this Mortgage shite still hanging over him. Our finances and fortunes are already tied together. If things got so bad he couldn't pay us back it means we'd probably be out of jobs too and we'd still be f%$ked for a while even if we hadn't loaned him the money.

Brother wouldn't have enough for a deposit as a currently single guy within 3 years anyway which is why doing this for dad as a thank you for everything he's done for us over the years and living rent free for years really has no implications on timelines. ie. He’ll have gotten his money back before potentially being able to afford to move back out i to his own gaff.
@nyeung I think that this is a really bad idea (reasons below), but if you do do it, you should have a legal document covering all of this attached to the will.
  • if a sibling suddenly meets "the one" and needs their own house
  • if a sibling is doing their own business and needs to not be in debt
  • if the business goes tits-up (happens all the time)
  • if anyone even quits the family business
  • if a verbal agreement about the will isn't honoured in writing or in practice
  • if anybody falls out with anybody else
@brightsky Thanks Mate. F*cking Covid induced Heart Attack and poor dad blames himself somewhat because he brought it into the house but it could have been any of us and was inevitable really. Vaxxed and Boosted and everything but her health issues didn't help.
@nyeung Unfortunately I’ve felt the same, when my mum passed after struggling with illness. You said yourself you weren’t exactly thinking straight, and this takes years to pass. Covid is like glitter in the air and there’s no guarantee it was him who brought it in. This guilt coupled with financial burden is not good for your dad. I hope you resolve it. I think the worst that can happen with the numbers you’ve crunched, is that they say no. But I bet there’s wiggle room. There must be. I hope you all get it resolved & well done for sticking together and looking after him. It will work out.
@brightsky Whos cutting Onions around here!! LOL. Thank you again for these amazingly kind words mate! Sorry about your Mum too. Our Ma's really leave a huge void in our lives when they go no matter what age we are when it happens.

We've always stuck together and been there for each other. Was just telling a brothers partner my future SIL about this thread and all the 'What Ifs' about falling outs throwing a spanner in the works that so many respondants seem to be worried on my behalf about. I was saying, these people just don't know us and how unlikely it is we could ever fall out and is it really that common for family to fall out with each other because none of us ever have. Future SIL laughed and said that we are the abnormal family where everyone gets along, are always fair and equitable to each other and who easily resolves differences without drama and always has. She said drama is much more common in other families, so peoples concerns about this arrangement I propose is merited based on most peoples experiences. She then reminded me about all the drama and fallouts in her family, my other brothers partners familes and families of all our friends. She said, you brothers and your mum and dad are the weirdo's that have never fallen out!! LOL.
@nyeung That may all be true, but maybe your parents came from a history of this and ensured you were raised to care for each other. Also, there’s no sisters involved 😜/s

Even the most well-intentioned families can fall out when money’s involved. It might be no harm to document what you’re doing so that confusion never sets in, especially down the line when people’s circumstances can change abruptly. I know you say she a future SIL, but only time will tell, and I assume she’ll be involved financially so you need to be clear (as I’m sure you are). It’s always good to have clarity.

As you’ve seen with your father’s circumstances, things can change even when you’re doing well, it’s no harm to make sure you’re all on the same page.

Your mum would be proud of you all, I’m sure. I once read a quote that said there’s a special place in heaven for a mother of three boys and I’d well believe it. We had 1 and ran for the snip. I sincerely hope it all works out well for all of you.
@brightsky My mum had 5 Sisters and 2 brothers and she always said she was so happy to only have sons knowing what it was like to live in a house full of girls!! LOL.

She'll be my SIL early next year. One of the reasons myself and my other brother didn't ask them to be involved in this with the wedding coming up and them likely being the first to want to move back out into their own home which they are saving for. Another brother Married 5 weeks before Mam passed (So glad she got to witness at least one of us tie the knot) and already owns his own home with his wife. They are renovating soon which is why we didn't ask them if they wanted to contribute either. Its the two of us currently single brothers with the least obligations and financial commitments or plans to move out in the next few years that are going to do this.

Someone asked what if one of us singletons meets 'The One' and wants to move out or buy a, we tell 'The One' that that won't be happening till 2027 at the earliest till we get our loan to dad paid back and I clear my loan in order to help the man that worked the last 60 years to provide for his family. Others ask, what if your dad can't pay you back?? I'd take a bullet nevermind a financial Hit for that Man!!
@nyeung Just out of interest, as you’ve moved home, are you all paying token rent? Are you covering the bills etc?

We returned from America a few years ago, during a housing crisis, and the best option for us was to move in with Dad, we paid him ‘rent’ and covered the bills during our time at home. By the time we moved out he had gone on several solo trips with the extra cash & was delighted (until the kids completely took over the gaf lol). I’m assuming here that with the wedding coming up times are tough for the engaged couple, but (please don’t take this the wrong way) they could pay ‘rent and bills’ which could be say 700 a month, in the 10 months l to the wedding, you’ve made up the deficit you need to pay off the Mars balance.
@nyeung They can be slow to offer write offs at all regardless of the price they bought the loan when they can get the full amount from the security. You never know though they may want a quick injection so worth while making an offer about the 70k. More than likely they will look for a financial statement to show where the money is coming from and so they know there isn’t more for them to go after.
@nyeung What you need is efficiency. If I were you I'd suggest to explore the situation where you and both your brother give money to your dad under the capital gains threshold (group B, also remember you get another 3k on top of that every year tax free. If your mother is still around, that would increase to 6k). It doesn't make sense for you to borrow money to pay another borrowed money when the rates are the same. The most efficient way is for all three of you to pay your dad's mortgage off as soon as you can without further borrowing. Your dad continue to pay the same amount he pays today.

You probably don't even need your dad to pay you back (if he is no longer capable by that age). Then just split it from your inheritance later on. If he can, you can work it out with him to pay both of you back evenly using the 3k tax free limit every year.

That way you minimize mortgage interest for everyone involved .
@sydwell Hadn't considered CGT at all. Even when its a loan from child to parent and not a gift?? So while my E33,000 loan is just about at the Group B threshold, my brothers is over it and has tax implications?

I know my An Post loan and the proposed Mars Capital Loan is the same 6.9% APR, but my rationale is that this way we get the deeds back straight away and no one can ever take the house from us. Its a Psychological thing I know but it means something to me to have that reassurance that finally after all these years of stress of this feckin mortgage, dad will finally have the deeds back in his hands now rather than in another 7 years. Also, because I am prepared to wait for 3 years before I start getting paid back unlike Mars Capital, it means the other brother gets his E45,000 back first in only 3 years. So whats the difference between borrowing the balance after my brothers E45,000 from Mars at 6.9% APR or An post via Me at 6.9% APR? Well dad can only afford to pay back X per month. Mars obviously want repayments started straight away meaning my brother doesnt start getting paid back for another 3 years. I can wait 3 years to start getting repaid in order for my brother to get paid back first.

As for paying off dads mortgage without further borrowing. Only one of us has a lump sum to loan to dad at hand remember. We're borrowing for the remainder regardless, its just a question about whether its from Mars Capital themselves or from AN post via me as discussed in the previous paragraph.

I thought what I am proposing to do WAS minimizing Interest??

Unless I am misunderstanding something, and taking the CGT thing into account, are you saying we should limit my brothers contribution to E32,500 (Group B Threshold), Borrow the remaining E52,500 from Mars at 6.9% APR and I pay dad what I would have paid An Post per month for that loan? Brother gets paid a lesser amount per month by dad to get the 32,500 paid back in the same proposed 3 years??

I mean if it has to be done that way because of CGT then maybe thats what we need to do instead alright. Means not getting the deeds back for another 5-7 years though depending on the term we need from Mars for 55 grand instead of 85. I won't have a loan in my name but its not like I could afford to take out a big loan for something else while I was paying my contribution anyway. The way I looked at it was that another successfully repaid term loan in my name would help my credit rating anyway. Point is, I am not sure I understand what benefits there are doing it this way unless mandated by the CGT issue.

Remember, its no longer a Mortgage at 3.x percent. its an E85,000 outstanding balance at the end of a Mortgage deal that ended the MOrtgage 6 months ago and which Mars propose to let us refinance with a 7 year term loan at 6.9% APR that sees us pay a total of E121,000 with E36,000 interest. My way we got the deeds back immediatlely and its no longer security for anything, dads finished paying everyone back by about 5.5 years instead of 7 and it meant we'd pay about E5,000 interest instead of E36,000.

[EDIT] I think you misunderstood we aren't still talking about a mortgage at 3.x % but a 7 year 6.9% APR Term loan and then I misunderstood your advice based of the initial mistunderstanding. I thought you were saying there are CGT implications to us loaning Dad all this money. After googling it seems CGT would not be due no matter what amount we loaned to dad but there would be income tax implications if he paid us interest on the loans. (Which he isn't) What I know understand you to be saying is to both pay dad E32,500 (Group B Threshold) and Pay Mars the remaining E85,000-E65,000=E20,000 via their loan facility. Thats 3 loans though (my Brothers cash loan and my loan because I have no cash in hand and then the balance from Mars. Thats more complicated, leaves the deeds in Mars Capitals hands for another few years and means more interest, because I am borrowing the same amount from whomever in any scenario, but the Mars portion would have interest too.
@sydwell Can you have a look at my EDIT in Bold in my Original Post and tell me what you think. Is that basically what you were suggesting . I think I was confused by all the CGT talk where I focussed more on that than,

"The most efficient way is for all three of you to pay your dad's mortgage off as soon as you can without further borrowing. Your dad continue to pay the same amount he pays today."

Actually still confused a bit by the CGT stuff. Unless the rules have changed a quick google seems to indicate that a loan between child and parents is not subject to CGT at all. The only involvement with revenue would be if my brother and I charged dad interest on the loan (which we aren't) in which case we'd need to declare it for our income tax purposes. (effectively we are loaning dad about 650 a month each for 3 years and start getting paid back 650 a month by dad 3 years later)
@nyeung What I initially thought was that you and your brother have some money at hand. That is why I was suggesting that you look at Group 2 of CGT to give to your dad tax free (then get it back as inheritance later on).

Even without money at hand, there is not much point to borrow from An Post to pay Mars when it is the same rate. The only thing is you transfer the liability to yourself and your brother (like musical chair but without clearing it any quicker). Now, that being said if you can get a lower rate than Mars, then certainly do it by all means.

What I suggested was just to give your dad money on regular basis (monthly) between you and your brother. So that means your dad is paying what he is paying currently. You and your brother effectively top up for him as overpayment, less paperwork but same effect (Mars new 7 years allow overpayment at any time right?).
If overpayment is allowed without penalty, just because they give 7 years doesn't mean you would use the full 7 years, the overpayment top up you and your brother give will naturally cut down the years as long as your dad's paying monthly doesn't change
@sydwell Yeah I realised that myself after posting today too. As long as there is no penalty fee for over and early repayment and it reduces the ultimate interest payable, it actually makes sense to go back to square one and take the full €85,000 7 year loan from them as long as us supplementing dads repayments ends up with functionally the same result with the term being reduced to 3 years and the interest being reduced from €36,000 to €9000 odd. If we asked for and got an official 3 year term on the loan from the getgo it would mean me and my brother would be 100% committed to having to hand over 2x€650 every month without fail…and tbh like I pondered in my edit, they might not even have agreed to an official 3 year term for the loan anyway because our €1300 monthly top up was not part of dads stated income or 100% guaranteed to Mars. If the end result is the same we actually have more leeway in the repayments accepting the OG 7 year term from Mars.

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