Case study Social Welfare Payment Due to Cease - Don't know what To Do

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KitKat

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Just a wondered what people think of our situation.

Personal and income details
Income self Not working. Currently receiving Illness Benefit.
Income history: Was made redundant in June 2008. No work since. Was placed on Illness Benefit following an operation 2 years ago. IB Payment due to cease in a couple of weeks.

Income spouse
nature of income: Employed – Take home pay €22360 per annum
Income history: Was in full time employment but hours reduced to 4 day week in July 2010.

Number of children: 2
Amount of Mortgage Interest Supplement received: none

Home Loan Lender: AIB
Original Mortgage Amount: Property purchased in 2006 for €210,000 we paid a 15% deposit so actual mortgage was €178,500
Amount outstanding: €171,000
Value of home: Somewhere between €100,000 and €120,000 (that’s the opinion of 2 estate agents)
Interest rate: SVR approx. 4%
Monthly repayment: €450 (interest only) Full amount would be €1096
Amount in arrears: unknown

Summary of discussions and agreements with the bank
Have been on interest only since 2010, reviewed every 6 months, each review has been initiated by us. Have a meeting with the bank next week to discuss the forthcoming change in my circumstances, as I/O arrangement only runs until May when it is due to switch back to full repayments.

Other loans and creditors: AIB €9,500
Other savings and investments: None

How important is retaining the family home to you?
At this moment in time, I really don't know how I feel about keeping the family home. I’m tired of worrying about the finances at this stage.

Any other relevant information:
As mentioned above my Illness Benefit is due to cease in a couple of weeks. However, I feel I am ready to return to the workplace and I am considering asking GP to sign me off. I asked Social welfare for their opinion and was advised that if I did this, I would only be entitled to claim the means tested Jobseekers Allowance. However that could take a few weeks (???) to sort out. SW advised the community welfare officer should help out in the meantime, but he has advised he cannot help as my husband earns over the “threshold”.

I would consider doing a commute to the UK if it meant being able to pay the mortgage and all other bills.


What is your preferred realistic outcome?
Obviously I would like to get work so we can pay our way.
 
Hi KitKat,

Would it be possible that while you wait for your Jobseekers allowance to come through you request a moratorium to the bank for 3 months? This option should be available to you if you haven't used it yet. Maybe it is something to consider on your next week's meeting with the bank.

Good luck!
 
The means test for jobseeker's allowance where there is income from employment is explained here:

http://www.citizensinformation.ie/e...e_payments/work_and_jobseekers_allowance.html

As Cashier said, if you don't qualify, make sure to ask about signing for credits, as this will maintain your PRSI record while you're out of the workforce.

Your spouse may have an entitlement to Family Income Supplement (FIS). Information on that scheme can be found here:

http://www.welfare.ie/en/Pages/275_Family-Income-Supplement.aspx

It is possible to qualify for both payments (Jobseeker's Allowance and FIS), subject to the means tests for each. If you qualify for a Jobseeker's payment, the amount of that payment is included as income when deciding on any FIS entitlement.

If your spouse qualifies for FIS, then you would be eligible to apply for the Back to School clothing scheme during the summer.

Do you have a medical card? Mortgage payments are allowable as part of the medical card means test (they aren't allowable for any SW means tests). If you don't qualify for the full medical card, you may be eligible for the GP visit card (the income limit is approx 25% higher for the GP visit card).
 
Hi - Thanks for your input Malenka, cashier and gipimann.

Apologies, I should have mentioned in my original post that we had availed of a 3 month moratorium before going on the interest only, and at a previous meeting with the bank, they advised that we were unable to go down that route again.

I will certainly look into those links posted, my prefererence really would be not to make any claims at all :( but get back into the workforce.

We'll see how the meeting goes with the bank next week and I'll see if I can get signed off by the GP and at least get the ball rolling with the jobseekers allowance.

thank you all again.

KitKat
 
Confused as to next step

Hi – just an update ….

I was thankfully signed off by my GP and have now been means tested by the SW. My claim went through very quickly and I’ve been awarded (if that’s the right term?) €115 per week. So my total monthly income will now be €460. (Job applications proceeded with immediately).

I met again with the bank manager this week to inform him of this “news” and he wants us to “have a think about how we want to proceed”, as he informed me that we are now borderline unsustainable. He said there could be various options going forward. Such as:

1. Re-apply for a further 6 months interest only (this option can’t go on forever – my opinion not his);

2. Voluntarily sell the house and work out a deal with the shortfall - either turn shortfall into a loan at mortgage interest rates over the remainder of the term (18 years remaining).

3. Try to work out a part write off and pay remainder (again as a loan at mortgage interest rates);

4. See if bank will write off the whole shortfall amount (highly unlikely);

5. Split mortgage (if I understand the workings out of this Split Mortgage thing, then if I’m honest I’m not really keen on this idea).

He said this wasn't an exhaustive list......

We really don’t know what we should be proposing at this stage…… My thoughts regarding turning the shortfall into a loan is that in principle that’s OK, however, if I cannot get immediate employment then that too would be unsustainable what with having to rent somewhere to live as well as paying the shortfall and all other bills/loan. Is my thinking clouded???

I hope this post makes sense…. I’m getting confused now as well as fed up. Obviously pay our way is the most important thing to us.
 
KitKat said:
My thoughts regarding turning the shortfall into a loan is that in principle that’s OK, however, if I cannot get immediate employment then that too would be unsustainable what with having to rent somewhere to live as well as paying the shortfall and all other bills/loan. Is my thinking clouded???

I hope this post makes sense…. I’m getting confused now as well as fed up.
Click to expand...

Glad that it's worked out with social welfare. 1 is only more can kicking which is a waste of time in my opinion unless you've a specific reason for staying in the house. 2. to sell is your best option and agree to 'pay' the shortfall and in essence this becomes unsecured debt and then you'd most likely have an easier time going down the insolvency route (when we know how that works) but you'd be well suited for that it seems to me if you sell. You could also chose to live somewhere that is more suitable to employment for you both. 3. bank write offs, they say they are not doing these. Same for 4. For 5, split mortgages, I'm personally not a fan of these as I think it's just people signing up to debt forever with no light at the end. Sometimes it may work out but it has too many variables and I think a clean break is better.

Has the bank manager actually said that all those options are available to you?

Don't worry about agreeing to pay the shortfall if you sell and then worrying about how you will pay that off. In essence you take your income including rent and see what's left to give the bank, if there is nothing they may actually ignore the shortfall, but they will not put this in writing to you. It's something you could discuss with your bank manager to suss out what the bank is actually thinking.
 
YOu are only just back on the job market. What are your prospects like? If you have a reasonable prospect of a job would you stick with the I/O for a set length of time and then examine your options again afterwards.

Also is how many hours a week does your spouse work? If it is less than 30 hours did you ever apply for mortgage interest supplement? As you have been in an arrangement on your mortgage for more than 12 months you will qualify if you meet the means test.
 
Thanks Bronte – The bank manager was more "suggesting" the options than saying they were actually available to us. We will try and discuss this further with the manager and like you said try and suss out what the banks take is on this.

ClaireM – I have applications in for jobs (and continuing searching) at the moment, however where we are living it is fairly quiet on the jobs front so I am having to look farther afield for work, so Bronte’s suggestion about moving to where the work is looks more like a solution.

Staying on interest only while looking for work was one of my thoughts but we really don’t want to be going down this route for too much longer and God only knows when/if a job comes along. Other half works 34 hours/week so CWO said we didn’t qualify for mortgage interest supplement. Thankfully where he works is remaining fairly consistant as far as his hours are concerned.

We have got to the stage now where our thoughts are divided, other half really deep down doesn't want to loose the house, whereas I'm now so fed up, loosing it to me doesn't really matter any more. Maybe if I'm lucky enough to get work then maybe my feelings will change.

Thanks for your thoughts on this guys.
 
The banks are having lots of meetings with distressed borrowers.
In the main they are offering very little in the way of workable solutions.
They are ducking and diving, presenting everything in a vague cloud and waiting for the borrowers to checkmate themselves.

If I was you, I would

1) Hold on tightly to my home. Don't allow anyone to persuade you to give it up until first discussing with a reputable financial advisor.
2) Make your decisions based on current income. No one knows what the future holds. If you are successful in getting employment later, thats a bonus.
3) Continue paying interest-only on your mortgage. As long as you are regularly paying interest on your mortgage, You're unlikely to come under the spotlight in the short term. Your mortgage should be paid in priority to your loan.
4) Your negative equity is not that big at around 60K. If house prices come back a bit over the next ten years there's a good chance that this will disappear in time.

Overall, keep calm, dont do anything drastic. Pay whatever you can. I think your situation will improve and once again Id advise you not to give up your home easily.
 
Hi all, was just wondering if anyone had any idea as to how long AIB are taking to assess the SFS figures and come to any conclusions for assistance in restructuring mortgages.

Our figures were sent in about 3 weeks ago and we advised the branch manager at the time that we would "try" to add another €130 per week from my husbands wages to top up my payments and try to cover the mortgage/bills etc.....

That would leave us with €300 per week for the usual day to day outgoings. To be honest after 3 weeks, we're struggling with that already (maybe we're doing something wrong).

The mortgage payment this month (the last under the current Interest Only arrangement) has been returned unpaid along with one or two other DD's bringing us into an overdrawn situation and incurring unauthorised overdraft fees.

I've a couple of interviews lined up and hoping something comes of them but I know there's no guarantees. Apologies but I'm feeling like we've started on the slippery slope down now.
 
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Still No News From AIB

Hi sorry to bump this up but as per last post it's now been 6 weeks or so since we submitted our SFS to AIB and still not heard anything back from them.

Our last interest only payment was returned unpaid for May and the payments are supposed to revert back this month (June) to the full amount. I enquired yesterday at the bank and the manager said he still hadn't heard anything back from Dublin. The revised payment is due in a weeks time and we are already overdrawn, I'm getting really stressed about this now.

We are still struggling to pay the extra 130 per week from OH's wages to try to "top up" my SW payments and we're now coming into "silly season" what with the kids school tours coming up, school friends birthdays (which all seem be May/June/July :eek: ) and the summer holidays coming up, I'm going to feel bad not being able to do much with them over the summer :(.

I've had 3 interviews in the space of 2 weeks (a miracle in itself) and have heard nothing from them at all - still looking (and hoping) though.

Surely we have given them enough time to come up with some sort of an answer but I also appreciate that they have "a million" other applications to process too.

Apologies for the "rant" type post but needed to get this off my chest.

Thanks

PS: Apologies for thread title - I don't know how to change it.
 
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KitKat said:
I enquired yesterday at the bank and the manager said he still hadn't heard anything back from Dublin. .
Click to expand...

And did he not ring Dublin there and then and sort it out? If not go back today and get an answer.
 
Bronte said:
And did he not ring Dublin there and then and sort it out? If not go back today and get an answer.
Click to expand...

Hi Bronte

No he didn't ring them. I actually didn't speak to him directly (it was one of the counter staff who went in to his office to ask him). I was kinda hoping he'd call me in - but there you go!!

I tried ringing him today but he was out of the office.... I'll try again tomorrow. I know I should go in but it's a 20 mile round trip and I'm watching the petrol :eek:
 
I've found AIB immensely hard to get direct contact with in the past couple of weeks.
All calls to direct branch numbers now go to a contact centre who simply leave a trail of messages back to the bank.

Had a face to face meeting which was entirely unproductive and involved being told we would not be approved currently (to move) for the existing value of the (relatively small) mortgage we already hold.

Just for people's information AIB now expect a family of 5 to have 2800 in disposable income before any mortgage payment is made. But I am guessing (perhaps unfairly) that this is not the amount allowed for SFS's which would be much less?

Finally, no clue of any innovative new products coming down the pipeline for movers, trade-up or downs, which are being mooted in various articles in media.

My advise would be actually go in and wait to see someone if you want to have a face to face, but also not to expect to be given any real or useful information. As a previous poster suggested, pay what you can and keep the head down. Best of luck.
 
Mrmr said:
I've found AIB immensely hard to get direct contact with in the past couple of weeks.
All calls to direct branch numbers now go to a contact centre who simply leave a trail of messages back to the bank.
Click to expand...

Thanks Mrmr - yes I have to agree regarding contacting by phone - numerous messages left/not passed on. All changed since they shut the various local branches and amalgamated them :(

Will try and get in tomorrow then and see what I can find out.
 
Bronte said:
And did he not ring Dublin there and then and sort it out? If not go back today and get an answer.
Click to expand...

OK, so got to speak to the manager (finally) and he advised that he "hasn't heard a dicky bird from Dublin."

He didn't know what the situation was or why there hasn't been any responses, but "after this length of time, it's possible that our case has been passed on for an executive write-off" not sure what that means to be honest.

I told him that our return to full C&I payments were due this month and we wouldn't have enough in the account to cover it and will subsequently go further overdrawn, to which he replied "don't worry about that, it'll just come back unpaid" (easy for him to say).

What more can we do? Do we now consider cancelling the direct debit and just paying what we can into the mortgage account?

Any thoughts on this one? Thanks for all replies so far.
 
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Change in Interest Rate - Already Struggling

Just received a letter today (13 June) from AIB dated 6 June (a week in the post!!!!!) advising us that from 12 June they are kindly increasing the interest rate from 4% to 4.4% a lovely increase of 60 euros a month.......

Feel like the downward spiral has started :(
 
KitKat said:
Just received a letter today (13 June) from AIB dated 6 June (a week in the post!!!!!) advising us that from 12 June they are kindly increasing the interest rate from 4% to 4.4% a lovely increase of 60 euros a month.......

Feel like the downward spiral has started :(
Click to expand...

Complete shower of c#nts they are,,, your not alone....
 
KitKat said:
OK, so got to speak to the manager (finally) and he advised that he "hasn't heard a dicky bird from Dublin."

He didn't know what the situation was or why there hasn't been any responses, but "after this length of time, it's possible that our case has been passed on for an executive write-off" not sure what that means to be honest.

I told him that our return to full C&I payments were due this month and we wouldn't have enough in the account to cover it and will subsequently go further overdrawn, to which he replied "don't worry about that, it'll just come back unpaid" (easy for him to say).

.
Click to expand...

Well he's less than useless, why did you not get him to ring Dublin? And if he tried and didn't get through say you would have no problem waiting until he did get through? I'd have stayed there all day and the next if necessary. With a sign saying 'I'm waiting until this branch gets an answer from Dublin'

Imagine Irish taxpayers money has gone into saving the well paid job this man has. For doing absolutely nothing of benefit to his customer. And then they have the neck to say we're not paying the top guys enough with their 'imaginary' cap on 500K salaries.
 
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