Case study two rental properties plus own home plus credit cards debts

W

wexbloke

Registered User
Messages
8
Hi all,
I am near the end of the road with my debts, my fault, I gambled that properties were going to appreciate so I could have a pension fund or house for kids when they grew up as i thought it would be next to impossible to afford a new house in the future.
In hindsight I would of had more value if I peed my extra income against the wall.

I have a good paying job which is very stressful entails long hours and much travel wife has a part time job which has had days cut.
my job is not secure.


All payments are up to date but are on interest only due to revert shortly.

Summary

Description Mortgage Value Loss Cost per month rental
Home 250K 200K -50K 900
Rental 1 250K 150K 100K 1000 750
Rental 2 200K 100K -100K 900 500

we also have debts of

Credit cards
 
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obviously the credit card is the highest interest rate and paying it down should be prioritised.
Would you consider selling ppr and moving into one of your rental properties, also you didnt state how much of a cash surplus you currently have each month
 
hi

new to site so dis not finish response i edited an re posted with more detail, and yes would move into rental
 
Hi all,
I am near the end of the road with my debts, my fault, I gambled that properties were going to appreciate so I could have a pension fund or house for kids when they grew up as i thought it would be next to impossible to afford a new house in the future.
In hindsight I would of had more value if I peed my extra income against the wall.

I have a good paying job which is very stressful entails long hours and much travel wife has a part time job which has had days cut.
my job is not secure.


All payments are up to date but are on interest only due to revert shortly.

Summary
property Mortgage Value Shortfall Repayments Rental
Home -€260K €200K -€60K -€900 €0
Rental 1 -€250K €150K -€100K -€1,000 €750
Rental 2 -€200K €110K -€90K -€900 €500
CCards -€35K -900
Loans -€34K -900
Revenue1 €4,000
Revenue 2 €1,000
Rental rev €1,250
Totals -€779K €460K -€319K €1,650 Spending after loan repayments
All Mortgages are with one bank, would

cash surplus with all on interest only is 1650, cost other house insurances, fuel, heating etc leaves not a lot but survive, however,with kids going back to school we are in a bad way, when we were paying full mortgage on home we were 1000 less a month.
credit cards are cut up and paying minimum each month.
 
hi all,
I am in trouble with excessive debt and need advise on what to do, I have gone to MANS and they were not much help and because of rental properties did not assist, just told me what I know. I do not want to deal with Banks, C Union and Credit card companies direct as I am useless when they pressurise me. what do I do?
 
Hello Wexbloke,

What is your income?

You said you cannot deal with your creditors as it stesses you out too much. Could your wife do it instead? Otherwise can you post up all details of your income and what the arrangment you have come to with each creditor. The more information you give the better the advice.

Not sure yet but maybe it's time to start not paying some of the debt, particularly the credit card & loans as a starting point. Have you discussed with your bank if it's possible to sell the 2 investments?

Stress can be an awful handicap, but if you don't deal with it or cannot deal with it, then the problem and the stress will get worse. Does your wife know how bad the financial situation is and does she realise how stressed you are?
 
hi Bronte,

I have been paying everything up to date so far, but late on some.

Have been paying interest only on all properties but bank now want to put family home back onto annuity and go from there. if I do , it means I will not be able to pay c/cards/c/union as extra €1000 per month approx.

MABS suggested I reduce payment to rental to match income and pay balance to CU & CC companies. However they will not contact them, this is where I am falling down! Any recommendations on who I could use to assist in process?

Went to local Mortgage advisor and was not much help either.

I have done the financial statements etc for Bank MABS and would gladly give away the rental millstones if the bank asked.
Did ask for a mortgage break as would of cleared down c cards but rejected for obvious reasons.

€3900 monthly income after tax
€637 income 2
€750 rental 1
€550 rental 2

€5837 total income

-€950 home mortgage (Interest only)
-€1100 Rental Mortgage 1 (Interest only)
-€870 Rental Mortgage 2 (Interest only)

-€500 Credit Union 1
-€400 Credit Union 2
-€460 Credit Card 1
-€450 Credit Card 2

€1107 Balance. this has to pay for everything which means we are always struggling, on the c cards, the amount is the min payment but have about an extra €300 per month when interest is taken out.
 
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Sorry for your predicament. I wonder if you wanted to organise a payment settlement with the bank, you could speak to http://frost.ie/ who were very helpful when I called them. They are in Ireland and can help the little guys like us in reaching a settlement with the bank.
 
wexbloke said:
€1107 Balance. this has to pay for everything which means we are always struggling, on the c cards, the amount is the min payment but have about an extra €300 per month when interest is taken out.
Click to expand...

I think you should do things the other way around. How much do you need to live on. What is left over can be paid to your creditors. Mabs unfortunately will not deal with you because you have an investment property.

(Rant - the state organisation that is supposed to help people MABS should not be refusing to help people like Wexfbloke - what a cop out)

Wex how much does it leave you if you subtract your outgoings.

In essence your bank is saying to you pay us and nobody else, or pay us and reduce your payments to everyone else.

I suggest when you've all the figures and have decided how much you can pay everybody, you write one letter, to all the creditors, you tell them

Dear Creditors, x bank/y credit union/z credit card company

1 This is my income
2. These are my outgoings
3. I will pay this amount to my mortgage
4. The rest of you can have this much - also ask arrears writeoffs and zero interest - if you don't ask you won't get
5. Get them to confirm to you that what they will agree

How about that for an idea? Would you feel you had more control that way?

Munchy mentioned frost.ie. I think that's the poster who posts on here as Frostie. That's a business and will have to be paid to offer their services to you, and nothing wrong with that. That's also another option for you.
 
Thanks Bronte,

I will protect our home and do my best with the rest.

if I don't have I don't have and have kept up to date as best I can but five years of austerity and been no better in fact worse has taken its toll.
 
wexbloke said:
I will protect our home and do my best with the rest.

if I don't have I don't have and have kept up to date as best I can but five years of austerity and been no better in fact worse has taken its toll.
Click to expand...

Indeed Wex it's been going on too long. Try and enjoy what you have and really I hope you're able to talk to your wife or sister etc it will help with the stress, no need to bottle it up, in fact that's the worst thing to do. Try and have a nice weekend with your family.
 
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