Old Loans coming back to haunt me

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stayorgo

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Hi All

We would have gotten into trouble financially with our mortgage around 2008. My husband is a plasterer and all work dried up.

We eventually wound up with arrears of approx €25,000 in 2016 and we made the decision to move back into my family home with my dad and we have since rented out our house and gotten things back on track with the mortgage - BOI capitilised the arrears and extended the mortgage term.

In 2008 we had 2 loans in my husbands name - 1 with GE Money and 1 with BOI. We dealt with MABS at that time and they looked at my finances as I was the only earner and advised that I pay €32.17 to the BOI loan and €25 to the GE money loan per month. We have continued to do that since then with very little communication between us and them.

Our BOI loan was moved onto a solicitors called Ivor Fitzpatricks and our GE Money loan was sold to Cabot Financial. There is €13500 outstanding on the BOI loan and €9500 outstanding on the GE loan. Twice in recent years I have gotten our credit reports from the ICB and we would have seen the mortgage problems on it but they have now obviously disapeared from our ICB report, we never saw anything other than the mortgage arrears.

We recently applied for a credit union loan and they have come back to us saying that my husband owes these 2 loans and they are showing on our credit reports that they get from the Central credit bureau. This will sound really stupid and naive but I thought that these loans were agreed and we would pay back the amounts agreed over time. I never thought it would be appearing as defaulted on a credit report. Has anyone any advice here. We will obviously need credit in the years to come and I need to get this sorted. Do we just pay extra off these loans until they are gone or how do you sort out these old historic loans?

Many thanks all,
 
Fair play to you for engaging and continuing to pay the loans.

You owe €13,500 to BoI and are paying €32 per month

You owe €9,500 to GE Money and are paying €25 per month

So you owe €23,000. If the interest rate is 5%, then that is about €1,000 a year.
You are not even paying the interest.

If MABS did an agreement with them that they would stop charging interest, you are paying €700 a year off the capital, so you won't have paid off the loan for 33 years.

So it all depends on what MABS agreed with them. Did MABS not write to you telling you what agreement they had reached?

I presume that you can now pay your mortgage and this reduced payment and that you are in positive equity?

If not, it's possible that you might be able to do a Personal Insolvency Arrangement to get the debts written down. But it does not sound as if you would qualify.

1) Check what deal MABS did.
2) Talk to MABS again to see if you would be able to do a PIA to sort out the debt.

If you can borrow family money to settle the €23k debts for say a one off payment of €10k, they might go for it. But your credit record will remain impaired for 5 years after you clear the debt.

Brendan
 
I see that you were advised to go for a PIA 5 years ago.

Advice needed re negative equity mortgage with arrears

Hi All, Would really love some advice as we really seem to be up the creek without a paddle. I know very little about these matters and my husband is as bad. I will give all the details as I don't want to leave anything out that may be needed. Bought house in 2006 when we were 24 and I was a...
www.askaboutmoney.com

In that thread you didn't tell us anything about the unsecured debt.

Had you gone for a PIA back then, the unsecured debt would have been written off and you would have a clean credit record by now.

Brendan
 
Thanks so much for your reply Brendan. Yes when I posted re the mortgage in 2016 these 2 loans weren't even on my radar as I thought they were sorted with MABS.

We had the mortgage, 2 credit union loans, a car HP and these 2 loans which had gone what was called 'legal' I think? I thought that they were sorted as in they agreed that we would pay X amount. I know that sounds a bit stupid. I dont think we would qualify for personal insolvency now. I will inherit the house we share with my dad and our mortgage is almost fully paid by the tenants and we both work.

We've worked really hard in recent years and we've paid back all the other short term debt we owed and sorted the mortgage so I want to get these 2 things sorted so when we look to borrow in the future we will be able to. Im just wondering what is the best approach to take. I'll go back to MABS and see because I had so much going on I couldnt tell you what the arrangement was.

Thank you so much for your time I really apprecaite it.
 
Brendan sorry I rang Cabot Financial there as I tried ringing MABS and I was on hold. Basically what he told me over the phone is that our current balance is €9492.62 and he could accept a settlement over the ohone of €7600. We are not being charged any interest on this balance. They might accept lower if you wrote into them with supporting documentation. If they write down the debt it will appear as settled on our credit report for 5 years as opposed to appearing as paid in full. As we want to repair our credit report to be able to borrow would we be looked more favourably in option 1 or option 2 below in relation to banks/credit unions ect? Many thanks

Option 1: Offer them a lump sum of say €5000 and have it apprear as settled on our credit report for the next 5 years - ??? If we would be able to borrow in these 5 years?

Option 2: Pay €158.21 montly for the next 5 years and then in 5 years it'll appear as paid in full. I presume that in these 5 years our credit report will say waht it curently says which I think is defualt?
 
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If you go for Option 1, your 5 years will start today. A credit union during the next 5 years will see that you don't owe this money but that it was settled.

If you go for Option 2, your 5 years won't start for 5 years. In other words, you will have an impaired credit record for 10 years.

So if you can do Option 1, go for it.

But don't agree anything without sitting down with MABS. They will have experience dealing with these lenders and will have a good idea of what is acceptable.

Brendan
 
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