Money very tight where should my priorities lie?

D

doubledeb

Registered User
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224
Age: 37
Spouse’s/Partner's age: 38

Annual gross income from employment or profession:- 40k gross
Annual gross income of spouse: -self employed but very volitile approx 10k

Monthly take-home pay - €2896 net approx
(inc 260 childrens allowance
200 maintenance)

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

In general are you:

spending all we earn borrow from peter to pay paul during the month but saving 50 euro a week to cover maintenance on home and emergency car repairs bdays xmas etc (€420 in this account)
(a) spending more than you earn, or
(b) saving?

Rough estimate of value of home €120k
Amount outstanding on your mortgage: €265k
What interest rate are you paying? 2% (tracker)
Arears €2,500

Other borrowings – car loans/personal loans etc

Credit union loan 1 (joint names) - 21k outstanding €300 pm (resturctured 6 years left)
Credit union loan 2 (my name) - 6k outstanding €336 pm (not restructured as may need to access cash for daughters college until grant comes in (if approved)) This loan will be finished if I don't borrow from it in 16months time. Recently borrowed 5k to clear the majority of CC.

No other loans

Do you pay off your full credit card balance each month? no just minimum payment
If not, what is the balance on your credit card? 1130 (hoping to move to 0% interest CC soon)

Savings and investments:
as about 420 euro
Do you have a pension scheme?
Public sector pension
Do you own any investment or other property?
no
Ages of children:
17 and 4
Life insurance:
150 pm (loaded for insurance due to illness on my side, have shopped around but no one is cheaper)

monthly household exp
Mortgage - 864
Life ins - 150
food - 500/600 (inc food for 2 dogs)
diesel - 200
gas - 100
esb - 100
sky - 40
phone - 34
mobile - 20
home ins - 40
car ins - 30
13 - tv licence
300 - creche fees (finishing in june) but loosing 130 CA due to daughter finishing school.
200 - savings
26.50 - waste collection
20 - mobile phone



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

I have submitted SFS forms for the last 18 months to our mortgage provider and had been granted int only for 12 months. We have been making full payments since last october but with OH's job we are living week to week. If the mort gets paid esb doesn't etc. We were told to stop paying off any unsecured debt and to pay the mortgage in full. I have explained that in 18 months time i will have an extra €450 pm that I will give to them on top of what we are trying to pay now and that should bring the arrears down too. I have also told them that I will have college fees in sept but they really don't care.
They just don't want to know. Im physically worn down from waking every morning and going to bed every night thinking about money.

If you were in my situation what would you do

Thank you for any advice you may have.
 
Hi,

You have options available looking at your cashflow. You should decide what is worrying you most about your predicament and draw your priorities from this. Firstly your homeloan is what your bank would want you to focus on and they will be looking at it like this. You owe 265k and you are paying 864 eur per month off a secured family homeloan versus paying €636 off unsecured borrowings of €27k ! your bank want you to prioritise your homeloan. Have you asked the bank to restructure your mortgage over a longer term ? what have they said. Have you spoken to MABS about your credit union ? If it is eating into you that much you should further restructure this to an affordable level. I hear what you say about the Daughters college fee's it is an important event. As I see it your unsecured borrowings are what is causing your problem, €636 per month is a hefty chunk of cash, you could seriously reduce this to help your income. your mortgage at 864 if that is cap + interest seems affordable.
 
Thank you for your reply. Yes 864 is cap and int. Its a very affordable amount. I agree the problem does like with the CU's. One of these has already been restructured and if we were to default on this I don't think I could cope with solicitors letters coming in the door. As its already restructured I doubt they would drop the repayments much further even if we tried.

The other one is secured against a car but will be finished in 16 months time. I presume if we default on this they will want the car sold and them paid?

This on top of finishing with childcare costs this July, will reduce the monthly outgoings by €466 pm From July 2014. I intend to increase the mortgage payment by €130 this July and then by a further €336 in July 2014. I want to honour all of my debts but I need the Bank to back off until then.

Restructuring probably isn't an option as there are 29 years left in our mort and we are 37 and 38 respectively.

I have to be able to access cash in an emergency if necessary therefore I really don't want to default on the CU loans. Especially as in 16 months time we should be in a better position. And will be able to make all the repayments plus extra (hopefully)

I have discussed this with the bank and they have in no uncertain terms told me to stop paying everything 2 CU's and credit card and to default on them. I would end up ill or dead if I had all of them chasing us for cash also!
 
Hi,

Have you asked the bank to capitalise the arrears as I take it this is why they are chasing you ? "you say you want them to back off". I would put your request to them in writing to capitalise the arrears . If you are now paying full interest and capital each month have you consistently made your full repayments at this since October? this would help your request. You are paying a very excessive amount each month to your credit union and credit to you for wanting to honour your debts but restructuring them over a longer term is a different story to defaulting or ruining your credit rating you could give this consideration. Are both loans with the same credit union ? I understand you want to remain able to transact with them in future but what is more important to you, having a sustainable repayment or maintaining an unsustainable borrowing to them.
 
ASK12 said:
Hi,

Have you asked the bank to capitalise the arrears as I take it this is why they are chasing you ? "you say you want them to back off". I would put your request to them in writing to capitalise the arrears . If you are now paying full interest and capital each month have you consistently made your full repayments at this since October? this would help your request. You are paying a very excessive amount each month to your credit union and credit to you for wanting to honour your debts but restructuring them over a longer term is a different story to defaulting or ruining your credit rating you could give this consideration. Are both loans with the same credit union ? I understand you want to remain able to transact with them in future but what is more important to you, having a sustainable repayment or maintaining an unsustainable borrowing to them.
Click to expand...

They have given us the option of re-capitalising the arrears but for a relativly small amount I would prefer to pay it off next year when I have more cash, because you can only use this option once in the lifetime of the mortgage. We have been making full repayments since october but this month we may not meet the full payment. Our fridge broke and we had to get this fixed.. There are other unexpected things cropping up also like debs tickets grinds etc for my daughter.
I am not going to let her education suffer because we are in debt.
We can manage when we have nothing unexpected cropping up. My OH has ill health also and some weeks he is unable to work. So we basically live month to month.

My OH also has another loan with another bank that he has stopped paying completely as he was sold a PPI (a condition of the loan being granted) and was unable to claim from it when he lost his job. He should never have been sold this in the first place.
The bank refunded the PPI payments, but failed to cover the loan.

I appreciate that there are others out there with a lot more debt than us and at least our outgoings are just about covered by our income.
Both loans are with different CU's.
I can't wait to look back in ten years and reminise about the memories of my 30's when all we did was pay bills!

One of the CU loans has already been restructured over 10 years so extending this is not an option.

The mortgage is whats worrying me most but if i don't pay the CU's there will be solicitors letters in the door in the space of a month.
I want to pay as much as i can off the higher interest loans now and then focus on the mortgage and give them above what is due.
I will continue to pay as much as I can to them and will ring them to let them know if we are going to be short any month. Thats all we can do i suppose.

Thanks for your advice. Its always good to get an unbiased opinion.
 
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