Severe personal financial debt

Hi,
I am in severe finacial difficulty and I have decided to post up my problem here to see what advice people can offer.

I was travelling for a year or so and then when I came home I didn't cut my cloth to measure and I have being living beyond my means for the last two to three years......

This is the situation I am in and I have accepted that so I would appreciate if people didn't lecture me about getting in the situation...spilt milk and all that....I want to work on getting out of the situation......

Debts.....
Bank Of ireland 11,186.82
Bank Of ireland 7,386.23
Visa BOI 4,308
Visa MBNA 8,106
Credit Union 11,000
Total 41,987.12

Money Saved....
Credit Union: 6,000
SSAI(MAturing next May/June) 15,000

Monthly Outgoing
Loan 1 Bank Of Ireland 187.82
Loan 2 Bank Of Ireland 396.37
Credit Union 250
Rent 400
SSAI 254
VISAS9min Payment) 250
TV 35
Phone And Internet(needed for job) 65
ESB 35
OIL 50
PETROL 250
GYM 58
Misc 24
Sum 2255.19
Monthly Income

Income 2500 (In to hand after pension and VHI taken out)
Partime Job(Varies but on average about 1000 in to hand)

I don't have a house or morgage. I asked BOI last Thurs for a all in consolidated loan for about 38,000 and they said they wouldn't support my MBNA CC or credit union loan.

I would like to get a consolidated loan at low interest rates over 5 to 7 years.....Pay 10,000 of my ssai in to it next year. Try and save money at the same time and lump it in off the loan if I can as I go along.

Any feedback would be greatly apreciated. I understand that I have to stop living beyond my means and get my act together.
Thanks in advance,
TomThumb1
 
Re: Severe financial debt

Have you read some of the other threads about dealing with debts, budgeting and living within/below your means? There are some useful debt/budgeting resources linked in the key topics at the top of this forum too.
 
Re: Severe financial debt

Launched thread again with information split better.
Adminsitrator can you delete this one.
Thanks
 
I've merged the two threads. Please don't duplicate posts as per the posting guidelines. If you want to change a post you can edit the original yourself.
 
Err, why the credit union savings when you're getting nailed with credit card debt? Use one to pay off the other and possibly give up the oul gym. You still seem to have E1250 in hand at the end of the month.
 
TT,

It doesn't make sense to have 6K in savings, with over 12K of credit card debt on which you're probably paying a very high rate of interest. Use your savings and clear the card with the highest interest rate first.

Sell your car, use public transport, save on petrol.

Cancel your gym membership. Surely at this level of debt, gym becomes a luxury, not a necessity?
 
Here's a suggestion. Maybe not ideal or not even possible but a suggestion
nonetheless.

Go to the Credit Union and try your best to borrow enough to get rid of the
Credit Card debts. I know it seems like a long shot, but explain to them that
you'll up your payments and that the interest on these is crippling you at the
moment (it probably is?)

If you can get a low interest consolidation loan from the Bank to tidy these two
loans into one then do it.

Basically, get rid of your high interest loans ASAP whatever way you can do it.
Otherwise you'll have these debts forever.

Also, do the lotto once a week.....you never know?
 
kramer2006 said:
Sell your car, use public transport, save on petrol.

Cancel your gym membership. Surely at this level of debt, gym becomes a luxury, not a necessity?
Click to expand...

That's an excellent point. Sell your car and trash your gym membership.
Walk or cycle to work so you get your exercise and save a small fortune,
and it's better for the environment.

Sounds extreme, but desperate circumstances call for desperate measures!
 
nacho_libre said:
Also, do the lotto once a week.....you never know?
Click to expand...
I strongly disagree - even if it's only €2 it's a waste of money. If you insist on playing lotteries buy some Prize Bonds instead. At least that way you get your nominal sum back.

€250 p.m. on health insurance is a bit much as well when you have such significant debts. If you are generally in good health and not likely to claim on private health insurance perhaps think about ditching it for a while and taking it out again when you can afford it. Obviously there are implications for waiting/qualification periods on rejoining and you should apprise yourself of these before making any decisions.
 
Firstly I'd just like to say........... If I were in your position, I would look to transfer at least some of the credit card debt to a 0% interest card so that I'd have some breathing space. Check out the hidden flaws in doing this (another thread on AAM).

Ask BOI to consolidate the loans at a better interest rate. Try at any rate. I presume the credit union are holding onto your money because you still have an outstanding loan??? If they will allow you to withdraw your cash, take 5K and pay it off the cc with the highest interest rate. This will at least make you feel like you are getting somewhere. Keep 1k for emergencies (dire only). Do not renew your gym membership.

Even if you have managed to pay 5k of cc card debt and transferred the rest to 0% , continue to pay the same amount until debt is cleared. Once cc card debt is cleared check out which loan rate is higher, BOI or Credit Union. Start making extra payments into this account. Hopefully you will lower your debt substantially. When SSIA comes in, pay it off the highest interest loan. Then take the 254 you were saving a month and use it to reduce your debt further.

At the moment, you are a few quid away from being unable to service your debts. Better do something and fast. Good Luck
 
ClubMan said:
€250 p.m. on health insurance is a bit much as well when you have such significant debts.
Click to expand...

ClubMan, I think VISAS refers to both of his Visa credit cards, not "Vivas"! I made the same mistake on looking at this post. That would be some health plan: VHI Plan Z.

K.
 
Thanks for the advice so far....
A few points to make to clarify my position.....
The CU savings are tied in to the loan I have with them.
Selling a car is not an option. I live and work in the country and there is no public transport option. The car is only worth a 1000 euro at a push.....
The gym is what keeps me sain when I don't drink etc....due to having no money..........my health is my only wealth at the moment......
I think I will take up bank of Ireland on there consolidation offer and take a different loan possible with Bank of Scotland to pay off the credit union and credit card.
I noticed that the sickness/redundancy loan protection is very expensive. Is there insurance companies that specialise in insuring this instead of using the banks own one?
Thanks again for the advice, much appreciated.....
Tom
 
TT, when do you get the proceeds from your SSIA? When get it, don't hesitate to put the entire balance on your debts. Ditto the 6K CU savings. At the risk of repeating myself, there's no point in having savings when you're losing so much money just servicing debt.
 
Did you buy stuff with all that money?
Maybe you could sell some of your stuff. Use car boot sales & ebay. Proceeds could be used to pay off debt.
 
TT,

Although no substitute for this great website, have a look at www.fool.co.uk its a great website for advise in getting out of debt and all things financial. granted it is uk based but nontheless alot of it does apply!! as previous posts have mentioned, there is great advise on snnowballing debt etc.

Keep your chin up and make sure your ssia goes directly to service credit cards etc

good luck
 
Well something's gotta give. You really need to identify areas where you can make savings and where you can either clear expensive debt or replace it with lower cost debt. There's no point in just saying that you cannot forego this, that or the other.
I noticed that the sickness/redundancy loan protection is very expensive.
Click to expand...
Why take it out at all? It's usually very poor value for money due to premiums inflated with commissions/charges and the limited circumstances and timeframes in which it pays out.

Have you considered approaching MABS as per the debt/budgeting key topics that I mentioned pinned at the top of this forum?
 
TomThumb1 said:
Credit Union savings are tied in to the loan I have with them.
Click to expand...

The staff in a credit union can be very understanding. Ask them if you can take out 5k to pay off the credit card with the highest interest. If not ask if you can take any amount out. Should they refuse, ask if you can pay the 5k off your existing loan with them. They don't like to do this but they will if you insist.

Tom said:
The gym is what keeps me sain when I don't drink etc....due to having no money..........my health is my only wealth at the moment.
Click to expand...

I tend to agree with you and you do need some form of recreation to stave off depression.


Tom said:
I think I will take up bank of Ireland on there consolidation offer and take a different loan possible with Bank of Scotland to pay off the credit union and credit card.
Click to expand...

Don't forget to negotiate a rate with BOI. Also if you go to BOS (assuming they'll give you a loan) make sure their rate is better than the credit union.

Tom said:
I noticed that the sickness/redundancy loan protection is very expensive.
Click to expand...

Are they forcing you to take this out?

Try not to get too down.....remember at the moment you owe almost 42K but by May next year you will have 21K in savings so you have done something right. Now is the time to get smart and you may be in a much better position by May next year if you tackle the high interest issue now.
 
I agree - don't get down about your debts; but do make sure to do something constructive about dealing with them and rectifying the spending/budgeting patterns that lead to this situation in the first place. Posting here is one first step but make sure to read the other budgeting/debt management links and maybe seek advice and assistance from MABS.
 
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