Struggling to keep up loan repayments

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Mazie1

New Member
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5
Personal details

Age: 44
Spouse’s/Partner's age: 45

Number and age of children: 2 aged 8 and 9


Income and expenditure
Annual gross income from employment or profession: 26k
Annual gross income of spouse: 31k

Monthly take-home pay: €4240

Type of employment: e.g. Civil Servant, PAYE

In general are you:
(a) spending more than you earn, or
(b) saving?
not saving just have enough

Summary of Assets and Liabilities
Family home worth €310k with a €50k home loan from credit union
Cash none
Defined Contribution pension fund: none
Company shares : none


Family home mortgage information
Lender: credit union
Interest rate: 4.3%
Type of interest rate: tracker, variable, fixed.
If fixed, what is the term remaining of the fixed rate?
If tracker, what is the margin e.g. ECB + 1%

Remaining term: (Original term is not relevant) 7 years
Monthly repayment: €512

Other borrowings – car loans/personal loans etc
car loan: €15200
personal loan €9970



Do you pay off your full credit card balance each month?
If not, what is the balance on your credit card? no credit card


Buy to let properties
Value: NA
Rental income per year:
Rough annual expenses other than mortgage interest :
Lender
Interest rate
If fixed, what is the term remaining of the fixed rate?

Other savings and investments:

Do you have a pension scheme? no

Do you own any investment or other property?no

Other information which might be relevant

Life insurance: cover with spouses job but this might change


What specific question do you have or what issues are of concern to you?
recently due to job changes we may not be able to continue to make our current repayments we are afraid of a judgement mortgage being placed on the family home. we have no savings no rainy day fund and we will have education costs in the future for third level. it is all very stressful im not sure where to start any advise would be great
 
You have €75k in loans which is a lot.

It suggests that you are not living within your means and you are borrowing to fund day to day expenditure.

The first thing you need to do is to get good budgeting advice from MABS. And to try to live within your means.
 
You don't need to worry too much about a judgement mortgage.

Are you in arrears at the moment?

What is the interest rate on the car loan and the personal loan?

Are you making repayments on them? How much?

Is your credit union loan secured on your home? Or is it just a personal loan?

A lot of people face difficulty with their loans. The first thing to do is to talk to the lenders. They might be able to extend the term and thus reduce your repayments.
 
yes in arrears with the personal loan and the car loan of about 3500
the credit union made a new agreement so that is ok for now we are not in arrears with that but this may change as my husbands jb is at risk.

we are making repayments as follows per week after consultation with mabs:
credit union 118 per week 4%apr
bank car loan 133 per week 8.65%
personal loan 70 per week 8.65%
the credit union loan is not secured on the house
 
Who are the car loan and personal loan with?

You are in good hands with MABS.

Where is your concern about a judgement mortgage coming from?

One of the lenders will have to give up on any chance of getting payment from you and then get a court order against you.
Then they would have to register it as a mortgage.

Very unlikely to happen while you are still paying.

And even if they do, it's the same as any other mortgage. They will not be able to take your house from you.

If you reach a situation where you can't pay your debts and you are under pressure, there are plenty of protections for you. You could get a Personal Insolvency Arrangement or a Debt Settlement Arrangement as your lending is all unsecured. But I don't think you are near that yet.

Brendan
 
You should also consider doing a full tax review to ensure you are making proper and best use of all of your allowances and are also claiming for everything such as health expenses that you can.

Is an additional part time job feasible?
 
You are €78.5K in debt, all unsecured with a mortgage free house (if I am reading it correctly). You have €2933 per month after paying loans for family expenses, childcare, food, utilities, fuel, insurance, etc. I am assuming with Mabs you have done a breakdown of all the expenses so you know where your money is going each month.

Your main concern is loss of income if your spouse looses his job. So I think your main goal for the next while is to get a new better job. What is the potential for better paying work? Can you work evenings/weekends at other jobs to supplement your income? Your spouse probably has 20 years of experience so would have loads of skills to offer a new job and you the same. Growing your income is the best way to secure your future, a rainy day fund etc.

If your husband does loose his job, then look at family income supplement, redundancy, jobseekers etc to tide you over until a new job. You probably would be entitled to medical card etc if income remains at €26K pa. Mabs will help you renegotiate your loans.

The main thing is to have an iron fist on spending, watch every penny, make sure it is working for the family as a whole. Do you have subscriptions you can get rid off, basic packages on phones and TV/broadband. Any bad habits like smoking or gambling that can be reduced/stopped. The main thing is not to get into any more debt, so mind the car, stop any more home improvements for the time being, don’t be tempted to splurge on Christmas/birthdays etc.

Don’t worry about saving for third level, in-still a work ethic into the kids, encourage them to get part time jobs, get them to save for college themselves, or study to get a scholarship. Make them understand money and loans and they may be able to self fund themselves in third level with part time work and student loans.
 
Your debt load is fine (just about) for your age and income level.

The problem is that your interest rates are too high and/or you are paying down debt too quickly. Perhaps both you and MABS are focussing on the loan conditions right now and not looking at the bigger picture.

As I said your level of debt is not too high. Could you consolidate your debts into a mortgage on your property? Re-paying €75k over 20 years at 4.3% would mean weekly repayments of a little over €100 which would be manageable.

Would the credit union be open to this?
 
The car loan is pretty high percentage of income and i am assuming the car was even higher purchase price. Could you manage without the car for sometime or sell existing car and buy cheaper one? Use that loan repayment to fire off against the personal loan?
 
Can you extend the terms on the bank loans? It will cost you more in the long term but it will reduce the monthly repayments and give you a bit of breathing space on a week by week basis.

Or can you sell the car and buy a cheaper one and use the difference to pay down some debt?
 
Thanks sue I'm just trying to understand if that means you must sell the property ir if you pay it like a mortgage
 
Mazie1 said:
Can anyone tell me how a Judegment mortgage works ?
Click to expand...

I have asked before. Where is your concern about a judgment mortgage coming from?

Nothing in the information you have given has suggested that anyone will seek a judgment mortgage, much less get one.

Brendan
 
Clamball said:
So I think your main goal for the next while is to get a new better job. What is the potential for better paying work? Can you work evenings/weekends at other jobs to supplement your income? Your spouse probably has 20 years of experience so would have loads of skills to offer a new job and you the same. Growing your income is the best way to secure your future, a rainy day fund etc.
Click to expand...
I agree with this. I find it's a lot less painful to increase income rather than cutting costs.

Also, do you have the option to let out a room in your house, even on a part-time basis? Student / AirBnB etc?
 
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