Another debt disaster

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Fester1

Registered User
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20
Age: 33
Spouse’s/Partner's age: 34

Annual gross income from employment or profession: 60000
Annual gross income of spouse:Home maker

Type of employment: e.g. Civil Servant, self-employed
PAYE worker

In general are you spending more than you earn or are you saving? YES

Rough estimate of value of home :No idea, paid 260k towards end last year
Amount outstanding on your mortgage: about 258k,paying 1100 a month
What interest rate are you paying? ECB+.75%

Other borrowings – car loans/personal loans etc
MBNA cc 15400(paying 750/month)
AIB cc 15000(paying 300/month)
car loan 6000(377/month
Friends First loan 8000(300/month)
Do you pay off your full credit card balance each month? NO
If not, what is the balance on your credit card? ~30,000

Savings and investments:
0
Do you have a pension scheme?
Yes
Do you own any investment or other property?
no
Ages of children:
2 pre-teens
Life insurance: just to cover house


What specific question do you have or what issues are of concern to you?
Currently struggling under weight of loans/repayments.
These are over 1700 month.
When I make a payment on cc, later in the month I need to use it for day-to-day living expenses.
I have an overdraft of 1200 and I currently have this at 3300.
So once I do get paid(about 3500). It's only a few hundred in credit.

I've talked to my own bank about consolidating but they told me all loan requests are done centrally so that request was refused. I asked for overdraft to be extended from 1200 to 3300 so that I'd not have the extra charges and they would not do this either.
I was looking for a loan of about 44-45k over 5 years, which would be about 910-920 a month.
The way things are going it will take me probably 10 years to come out the other side as I have extra charges no matter where I turn.
Appreciate any thoughts
 
I guess its hard to consolidate your debts in the current crisis with banks as every one wants to play safe...you can try to raise more money on your mortgage if the value to loan ratio is high.... the next best thing you can do find ways to generate additional income from part time jobs etc
 
brazen_dude said:
I guess its hard to consolidate your debts in the current crisis with banks as every one wants to play safe...you can try to raise more money on your mortgage if the value to loan ratio is high....
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not a runner, they paid 260k last year and have a mortgage of 258k -therefore they are in negative equity (as the place can't be worth anywhere close to 260k now)

OP, have you done a full analysis of your day to day spending? it's probably worth writing down everything you spend over the course of a month or two and then analsysing your expense to see where you can make savings?

re. the mortgage, have you investigated:

negotiating a payments holiday?
extending the term?
going interest only for a period?

any of these would free up some income to tackle the really expensive debt on credit cards, car loan etc

Do you need a car? i.e. can you sell it and pay off the car loan?

Can your spouse work? If the kids are in school, could she work in the mornings?
 
thanks for replies guys.
We have started a review of our expenses and have started to pull in savings(reductions in sky,broadband,WoW :( and some other small bits) of about 100-115 a month. So I'm hoping by the end of this month that we'll see the enlarging OD start to slowly retreat the other way.
We've become real bargain hunters in the likes of Tescos and Dunnes and do most shopping in Lidl/Aldi but always using offers where available(50c bread in Superquinn 2 weeks ago for example-stocked up well on that!)
Also trying to make an impression on ESB and oil bills.
Looking at meter reading last night makes me think this months bill will be about the same or a little less than the last-Which would be a great acheivement for us)

My OH can not work at the moment due to some personal issues, so for the time being that is not a runner.

Regarding mortgage options
Going interest only for a period could be useful. How long a term is this usually over? We have a 30+ year mortgage so maybe this isn't a runner.

We have one old(8 year old) car so trading it down isn't really an option and we do need it.

I have both c/cs at 10.9%..I was pushing to get them down to 9.9%

What really eats at me(other than getting in this mess) is that with a consolidated loan and cancellation of C/C cards we could relax slightly on the tight spending restrictions, save some money and have an end date to our current debts, which currently seem to go on for ever!)
 
Fester1 said:
What really eats at me(other than getting in this mess) is that with a consolidated loan and cancellation of C/C cards we could relax slightly on the tight spending restrictions, save some money and have an end date to our current debts, which currently seem to go on for ever!)
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no you actually can't afford to relax spending restrictions or save at a lower rate than you have to pay back. Sorry to be blunt but lumping the loans into one over a long period just to allow the good times roll is silly.
 
As you are a Civil Servant (job security and all that),most banks should welcome you with open arms. Have you trie to bring your affairs to another Bank ? Tell them you require a loan to amalgamate the CC debt and then work on repaying a bank loan which should be cheaper. If you are trying to reduce your ESB, try changing the 100 watt bulbs for 60 watts and the 60 watt bubls for 40 watts.
 
pennypitstop said:
no you actually can't afford to relax spending restrictions or save at a lower rate than you have to pay back. Sorry to be blunt but lumping the loans into one over a long period just to allow the good times roll is silly.
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Perhaps I should expand a little. At the moment with the spending restrictions in place means that I pay bins late, don't pay TV licence,late on ESB payments.It's getting these back in to line. There is no rolling on of good times on the cards here. Far from it. Just getting outgoings under my control.
 
mercman said:
As you are a Civil Servant (job security and all that),most banks should welcome you with open arms. Have you trie to bring your affairs to another Bank ? Tell them you require a loan to amalgamate the CC debt and then work on repaying a bank loan which should be cheaper. If you are trying to reduce your ESB, try changing the 100 watt bulbs for 60 watts and the 60 watt bubls for 40 watts.
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Thanks for the feedback Merc.
Job security is good but not civil servant secure!
I am currently trying to consolidate with another bank so should know in the next few days.It was interesting talking to my own branch. They told me that there was no point in looking for loan centre to consolidate cc loans as they had forwarded several cases and all were refused. Just something they are not doing. Is the CC debt more of a VISA/Mastercard issue if it's not paid?

Moved all lights to 7w/11w energy efficient ones about a year ago,
 
By my calcualtions your repayments are 2827 per month (incl. mortgage.) You say income 3500. Is that per month? If so, you have only 700(+ maybe CB) per month to feed, cloth, heat a family of four! This is too low. The CC debt is your most expensive, even at 10%. You'll need to consolidate that debt. What about visiting MABS for advice?
 
It sounds like you're doing pretty much all you can. If I were in your position I'd ask the bank if they would switch my mortgage to interest only for a while, or maybe allow me to take a mortgage payment holiday, until I could get on top of other bills. I'd also consider getting a Saturday job.

I get paid on the 28th of the month and my mortgage was coming out a few days later(start of the next month) - one time I went into the bank (1st of month) and had them change my payment date to 28th, saving me one mortgage payment by pushing it into the next pay cheque (from a cash flow point of view). Something like that may free up €1100 cash flow for you to catch up on some of your utilities.
 
Have you tried going to the Bank where your employers Bank ??
 
Welfarite said:
By my calcualtions your repayments are 2827 per month (incl. mortgage.) You say income 3500. Is that per month? If so, you have only 700(+ maybe CB) per month to feed, cloth, heat a family of four! This is too low. The CC debt is your most expensive, even at 10%. You'll need to consolidate that debt. What about visiting MABS for advice?
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Hi Welfarite,
You are correct, that amount isn't enough, which is why I've had to use the c/c for day-to-day. The only saving grace is that the 1st loan finishes in just over a year and the second one a year later, so if I can't consolidate but can stay afloat for another year things will start to improve.
I know we will come through it but it's going to take a long time.
michaelm said:
It sounds like you're doing pretty much all you can. If I were in your position I'd ask the bank if they would switch my mortgage to interest only for a while, or maybe allow me to take a mortgage payment holiday, until I could get on top of other bills. I'd also consider getting a Saturday job.

I get paid on the 28th of the month and my mortgage was coming out a few days later(start of the next month) - one time I went into the bank (1st of month) and had them change my payment date to 28th, saving me one mortgage payment by pushing it into the next pay cheque (from a cash flow point of view). Something like that may free up €1100 cash flow for you to catch up on some of your utilities.
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Yeah, I'm considering a payment holiday for a month or two or perhaps even interest only for 12 months.
The Saturday job is something that I have also been thinking about...time to put some action with those thoughts though.
mercman said:
Have you tried going to the Bank where your employers Bank ??
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My employer is based in the UK so even that isn't a runner...although these days I don't think that would matter(see my comments earlier about loans been decided at a central location)
 
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Thanks for all the advise,sometimes it's good to discuss things out loudly with others.
I hope it's okay but I will give some updates over the next few days or weeks. Might provide useful to others.
 
I'm looking at your finances and simply cannot see any way for you to reduce your debt burden. The only thing I can suggest is that maybe you can transfer the balance of some of your credit cards and avail of the 0% interest free for 6 month offers that many banks have. That might save a few Euro's off every month. Have you a credit union account? Maybe it's possible for you to take out a loan and swap a high interest rate for a low rate?
Fester1 said:
thanks for replies guys.
We have started a review of our expenses and have started to pull in savings(reductions in sky,broadband,WoW :( and some other small bits) of about 100-115 a month. So I'm hoping by the end of this month that we'll see the enlarging OD start to slowly retreat the other way.
Click to expand...
If you get sick or go through a crisis, you have no savings or insurance. Your situation is extremely dangerous. You need to eliminate much of your debt, as quickly as possible. I think you need to maintain a spending diary.
 
Raskolnikov said:
If you get sick or go through a crisis, you have no savings or insurance. Your situation is extremely dangerous. You need to eliminate much of your debt, as quickly as possible. I think you need to maintain a spending diary.
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My aim is to reduce my debt as quickly as possible. God forbid I was sick long term I would be covered by my employer(up to 5 years I think!) which is good to now. The worst think that could happen is to be made redundant, the best is to be killed outright-this would clear mortgages,loans and employer would provide nice lump sum and pension to wife!
 
Keep a daily diary of your spending counting everything. I'm sure you're cutting back as much as you can but there may be small areas where savings could be made. (i.e. mobile phone credit, takeaway coffees, etc..) with foodf, make stews and cassroles from cheaper cuts of meats, for two days dinners. Get rid of sky if your paying monthly. Get rid of house phone if you have mobile. Go for walks in the park instead of cinema with kids (if ypur doing that). You know the stuff I mean. Main thing is for both of you to do it together and look at it as challenge not problem to overcome this. As you said yourself, one loan will be gone in a year so light starting to peep in....!
 
jaybird said:
Have you seen the price of candles? Won't be any saving to be had there! What about short term, a second job, bar work, odd-jobbing, delivering pizzas? Might be difficult to get or fit in, but thats what I did in the past when I was struggling. It has the added advantage of giving you no time at all to spend any money!
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yeah, someone suggested that earlier. I'm going to do some looking around in places at the weekend and see what's available.
 
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