Loans that we cannot repay

C

coleman

Registered User
Messages
78
Age: 35
Spouse’s age: 37

Annual gross income from employment or profession: 40k gross
Annual gross income of spouse: 0

Type of employment: private sector

In general we are: trying to save but dipping into our savings to pay bills

We are currently renting a 3 bed house for 800 per month.

Rough estimate of value of home:
Amount outstanding on your mortgage:
What interest rate are you paying :

Other borrowings:
9k overdraft on husbands personal current account
20k loan
8,500 credit card
2,500 credit card
14k tax bill
30k top up


Do you pay off your full credit card balance each month: No - 100e is paid every month for the 2500 cc. The other cc is with MBNA and my husband has been put into the 'hardship' file. They said that they cannot come up with a repayment plan if there is nothing to pay with. They advised that his name is more than likely going to be put on the Credit Bureau.
If not, what is the balance on your credit card: 8,500 plus 2,500

Savings : 2.5k with UB

Do you have a pension scheme: I do, however my husband does not

Do you own any investment or other property:
1 2-bed apt
1 3-bed house

Apt - Worth 225k on Daft however,I believe the more realistic figure is 180k. Mortgage outstanding is 224k. 4.5 with Start Mortgages. Recently requested to change it to Interest Only, but however am reluctant to go ahead with it as rent is covering the mortgage. Rental income per month is 1k. Also thought about moving back into it, but with 3 small kids am reluctant to do so, plus tenants are very good and have been there for 2 years now. Also there is a maintenance fee of 700 annually.

House - Worth 155k on Daft. This may hold true currently but not 100% about that. Mortgage outstanding is 161k (this includes the top up of 30k) 2.75 with BOI, but 30k is at 3.5. Rental income is 565 per month. Pays the mortgage, but not the top up. Again, tenants are quite good and have been there long term.


Ages of children: Twins - 1.5 yrs and a 4 month old.

Life insurance: to cover mortgages

What specific question do you have or what issues are of concern to you?


Everything. Our figures do not add up. Previous to this, it was fine. My husband was able to service his loans. He has now missed one 20k repayment and the 9k overdraft has not been serviced in that last couple of months at all. The bank isn't knocking on the door, but will in time.

When I do the figures up, I'm reaching the conclusion that we cannot pay the 20k loan or the 9k overdraft. Re the tax bill - my husband is due retention monies in from jobs that would cover this, but word is that the 2 clients that owe the monies will not be in a position to pay.

I am just looking for advice please. I am extremely worried about all this. We have looked at everything, even to the extent of emigrating, but we do not want to leave Ireland. I really don't know what we are going to do. I have asked my husband to get the address of the unit within BOI dealing with the 9k overdraft and 20k loan in order to write a letter requesting a meeting. My husband has gone to see MABS but didn't tell them everything. I think he is ashamed. I have made an appt to see MABS myself where I am going to go through everything with them. Appt is not for another 4 weeks as they are inundated with calls/appointments.
Even if my husband was lucky enough to get a job, there would be childcare costs for 3 kids so this really isn't viable.

Can someone please help?

Thank you.
 
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MABS is a good start. If the Credit Card companies/ banks know you are dealing with them and trying to come up with a plan it will help.

If you sold everything you would be €125'000 in debt (loans plus negative equity) plus whatever your costs would be for solicitors and estate agents, say another €15'000, so I don't see that as an option.
Your best bet is, through MABS, to pay off the credit card debt first and talk to the banks about restructuring/ extending your mortgages.

Is your husband getting any welfare payments?
 
Thanks Purple. My husband is not entitled to anything from welfare. Actually sorry, I'm lying - he is entitled to 60% of 12e so about 7 euro's a month. That's it.

He eventually got through to the guy in the Claims Dept in BOI today (he has been trying all week) and the guy there told him to get me to get a personal loan to clear the debts! I don't think the guy actually listened to my husband, when he said, we physically have not got the money. I don't know. The guy there said that if he didn't hear from my husband next week....seemed like an insinuation of something further ahead. At least now I have their address and can send a registered letter in. Looks like I might need to try to get MABS to push forward the appt date if possible.

Purple - I think MBNA is gone too far down the road now. I believe that it's just too late. He tried to come up to a repayment plan with them but they refused it by saying that we couldn't come up with a plan if there was no money.

What I am really worried about now is the banks. In particular the 9k and 20k as we just cannot service them and feed ourselves and our kids at the same time.
 
is there some sort of consolidation loan you could get for all the loans, credit cards, tax liability, etc. or at least a payment schedule agreed with all your creditors.

I hate saying it, but other people manage households on 40k - and they spend most of their lives repaying loans too because to buy anything they need to get a loan. If you husband could even get the minimum amount of hours in evening work he could help out with bills. You said his income is "zero" - there are very few people I know who are incapable of earning €100 a week.
 
Thw banks do not want to take your properties, they won't clear the loans even if they sell them so it's in their interest to come up with to an agreement with you where they get their money back over a longer term.
Use MABS, make a deal with the banks that reduces your repayments and use the extra cash to pay off your credit cards.
 
Thank you.

Would you think putting both mortgages on interest only for the moment and using the extra cash from that to pay something off would help to start with?

Also, tenchi-fan - I have thought of him getting some kind of job in the evenings. (Currently, he is still hoping to get work and goes out looking for work and his evenings are spent mostly pricing jobs, in the hope to get a job).We are based in Meath, so chances are, if anything became available, it would be in Dublin so he would have to travel up and down in order to work and pay for the transport costs involved - depending on the job and the rates, I wonder is it worth it. Also,I have thought that when I am due back to work that I would be able to take his tax credits on. I think they might be worth an extra 70e a week or thereabouts into my pay packet. I was thinking of maybe talking to the bank about this and using that extra money as a payment as well.
My mortgage in the apt is over 30 years and the one on the house is also over 30 years.
Thank you again for your advice, and if there is any more it would be much appreciated.
 
I would switch to interest only on the property investments. This will free up some cash which you need now. You can always switch back to capital payments later if your circumstances change.
 
You could ask revenue for a balancing statement for 2009. Did your husband work in 2009. If he did work the tax due is not due to be paid until Oct 10. Make sure you get all the credits incl his for 2009 - you can sort out his tax later when you know what the liability is.

Now the bad news. You have to make a return to revenue in respect of the properties rented for each year the properties were rented. See Guide from revenue concerning rental properties. You can make substantial reductions i.e. interest paid (not the repayments) assuming the properties are registered with the PRTB

Assuming you bought the properties with no or reduced stamp duty, did you own the properties for the required period before letting. The period was 5 years (I think)reduced to 2 a few years ago. If you let the properties within this period you owe the full rate of stamp duty, there may be interest and penalties also due. If this is the case you may be able to come to an arrangement with revenue. It may be worth it to talk to an accountant to help you sort this out.
 
Thanks Mongola - I agree with you! But I think he is actually being naive himself at the moment. He is trying his level best to get a job. He is right now on his way to meet a potential client and I know/think that he should just wipe the slate clean and get a PAYE job and just start concentrating on getting some kind of money in, but he is still living in hope that something will come that will pay a chunk off the debts. I don't think this is going to happen, but he is hoping it will. Maybe he is right and I'm being the cynical one. Time will tell.
ASDFG - Thank you as well for your advice. We lived in the apt for about 5 yrs before renting it. I know I have to sort it out and the sooner the better. I just dread hearing about how much more money we owe...
I was doing up new calcuations last night, based upon, me taking his tax credits, consolidating the loans and extending the term from 7 years to 10 years, and going onto interest only on both mortgages and it seems like we would still be running at a deficit. This is not including the potential hikes in interest rates, reduction of paypacket (more than likely to be included in the new budget), reduction again of child benefit, so if the government tax us any more (and they probably will) our deficit will rise up again - it's a catch 22 situation. I really do not see how we are to get out of this. What it's looking like is that we consolidate everything, try sell everything (if it sells), do the loan for a period more like 15 years. That's if we don't get hit by anything extra. Example - have had no access to our car for the last 2 weeks - needs a new engine - costing 1k. If we have another thing like that happening, I don't know what we are going to do...
Thank you to everyone for your advice and help.
 
Hi Tenchi Fan - the mortgages are over 30 yrs. Don't think if we extended them to 35 years that it would make that much of a difference.
We need to have a car - 3 kids and visits to the doctor/emergencies, stuff like that. One of our kids is an 'undiagnosed' athsmatic - they cannot diagnose him for sure until he is older,so we really do need the car. It's a diesel so not too expensive to run.
I have come up with an idea that I think might/could possibly work. If husband gets a part time job at home for say 2 days a week (he would have to bring the children with him) and if his parents wouldn't mind, if they could look after the kids for the 2 days he is working and he stays in his parents home with the kids ,I would be back at work full time - that means that there would be no childcare costs plus he is bringing in something, and he could look at the other days to try and secure work in his field. This at least would bring something in, without it being spent on childcare. It means that the kids are away from me though for 2 days and nights, but as I said there would be some money coming in. If that was a viable option, would I still be able to take his tax credits?
 
Yes - thanks, I think that is what we will do. Only issue is that the tenants are very good on both properties. I think I'll put an ad up on daft anyway and see if we get any phonecalls. I'll worry about the tenants when/if the time comes.

Thank you for your help and again, if anyone has any further advice I'd love to hear it. Thanks.
 
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Have you been in touch with revenue in relation to the tax bill. There was a lady from revenue on the radio during the week and she was basically saying that if you have or envisage having issues with paying a tax bill that you should get in touch with them and they will work something out with you. But you must get in touch with them as soon as you know/ suspect there will be an issue.
Is there any chance you could switch the 2.5k cc balance to an interest free card for 6 moths perhaps. May help free up cash short term.
What are you outgoings like in terms of household bill, mobiles, sky, shopping etc are there any cutbacks that can be made there.
Do either of you smoke? if so try and give them up.
 
Hi niceoneted,

I've done up all the outgoings - we have cut back on everything. We don't have SKY. I have a ready to go phone and I think I've put in maybe 50e into it in the last 8 months. I've literally put everything into a spreadsheet and have done for the last few months and it shows that we take approx 700 from the savings account every month to make repayments.

We don't live 'easy come easy go' - we live from paycheck to paycheck. We go home to visit family, maybe a trip to both sets of families approx once every 7 weeks. We don't go out much at all. The most I go out is to do the grocery shopping. It's very disheartening, when you are trying to get there and get things sorted, and it's impossible to see the light at the end of the tunnel.

Some good news - husband got a job to start in the next couple of weeks. He will be bringing in 3k, so at least when that comes in it will clear some of the debt. In the meantime he is looking for some part time work.
And I believe we owe revenue 1500 regarding the tax bill. That's a rough figure I've done up. I heard the lady on the radio myself, but you know, when the money situation keeps getting bigger and bigger, sometimes it's just easier to pretend it's not there. Stupid, I know, but I'm getting our asses in gear now to sort this out.

Thanks again for the help/advice.
 
Can I ask what area of construction your husband was in?
Fair play to you, you appear to be keeping a tight hold of everything. I think it is really important. I had a lot of debt before and once you get over it this time you will never let it happen again.
Best wishes.
 
I actually didn't realise how much debt there was until a few months ago!

He did mainly extensions and refurbishments. Also is part of the ESB scheme called 'Halo' - you might have heard about it - it's whereby people get a grant if they spend such an amount in upgrading the efficiency of their homes - I believe the Green Party 'forced' the ESB as such to do this. It's a great idea, the only issue is that because of the recession, people are very slow to spend money on these kinds of things, even though they would work out financially better off in the long run. They are probably right - we can't buy a penny sweet at the minute!

Would you mind me asking how much debt you had niceoneted? And what was your experience of it?

Thanks again.
 
I think at the height of it it was about 24k. This was on top of mortgage. No kids, single and permanent job so that helped. I really cut so many corners. I thought I wouldn't get out it but did.
Take one debt at a time. I have had pay cuts over last 18 months so am cutting corners again.
Is there any way family could give you a financial dig out. I know it would be hard to ask but I know my family have all helped each other out successfully when cash flow was tight for some.
 
Unfortunately, they can't. They are not a situation where they can. I'm hearing different stories from each one of them, and each story gets worse. Also, I really wouldn't like to ask. It's not as if no one hasn't been affected by the economy at present. I'd hate to ask, and then that person get into trouble themselves financially and us owing them money. I have thought about it, but I really don't see it happening. It's our own fault. Should have kept a closer eye and a tighter rein on things. Easy to say that now....I'm trying to do what you say as in 'to take one debt at a time' but it just seems, like neverending, that we can't wade ourselves through this muck. You've got me at a bad moment - sorry! Back to being positive again!

Thank you for the help again. If you have any other ideas of how to cutback please let me know! Thanks
 
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2,500 credit card
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100e is paid every month for the 2500 cc
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Savings : 2.5k with UB
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Have you considered using the 2.5k to pay off this credit card? It makes no sense to have savings earning nothing when you are paying high interest rates on a credit card.

I understand your husband desire to stay in construction work as he knows that line of work. I am guessing that his only prospect of work is bits and pieces here and there on an irregular basis. He should consider doing a PAYE job 2-3 nights a week or at weekends - even basic stuff like stacking shelves in the supermarket - will bring in some regular money. He could still continue to do some construction work, but will have the safety net of at least some regular income. A few hundred euro a month earned this way will make a big difference. And he'll be paying PRSI.
 
Would your hubby think of going around local areas advertising his construction / handyman services, most people stil have lots of jobs need doing however small. If he got some sort of Garda letter saying of good character etc especially for approaching older people it might help...... dont know if they do that

Other than that best of luck and I hope he knows how lucky he is to have married you :)....things will hopefully work out over time if you keep at it and stay positive
 
Thanks to you all for your replies.
Techni - Fan - I really don't think taxi-ing is an option. I've looked at it and thought about it. It really wouldn't be worth his while.
Also re childminding - I actually initially looked at putting our kids into a childminders (this is when we were both working) to cut costs and it actually works out more expensive. You pay more for the practical one on one care as such, plus there is extra hidden costs such as supplying the food and childminders are generally further away so cost more in fuel.
He is currently looking for p/t work - he has tried Tescos and McDonalds so far and it doesn't look good. Also when I'm back at work and when/if he got a job at night for example, it would be a case of that he would come back in at say anywhere between 4 and 6am and if he was to get up to look after the kids when I'm gone at 7.30am, I'm scared that he wouldn't be 'aware' enough. It is proving diff to get work even at the w/ends as a lot of people are in our senario and a lot of the jobs are already gone!
Gimp - he has advertised with leaflets and that - not much happening with that. He actually first did that about this time last year and got 1 phonecall from distributing 500 leaftlets...
I finally got a return phonecall from Mabs this morning - I'm going into them on the 27th May so hopefully they can show me a way out of this.

Thank you all again for your advice.
 
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