Unsustainable Debt Repayments

C

Cmd1611

Registered User
Messages
16
Hi,

I have a query re personal finances and what avenue to take to resolve. I have multiple debts, due to trying to maintain living expenses.

I have spoke to MABs previously, and through pride, tried to resolve this myself, but in turn only made the situation worse.

However it is no longer sustainable. I am not in arrears on any of my debts, but fear it is about to begin.

I am 41, have 2 kids, 11 and 13, and a wife who earns €22k pa. She is not listed on any debt other that the joint mortgage.

My net pay is €4200 approx, with motor expenses in addition.

My repayments each month are below:

An Post Loan 1: €491.50 (until Apr 29) Bal €17252
An Post Loan 2: €410.51 (until Dec 32) Bal €26887
An Post Loan 3: €171.22 (until Aug 29) Bal €6408
Revoult Loan: €368 (until Oct 30) Bal €17651
AIB Visa : €290 (balance of €7.6k)
AIB Mortgage: €954 ( until 2044) Rate 3.55%
AIB Overdraft: €2500

Is a PIA my only option here?

I have made many judgement errors and buried my head in the sand, but need to try to take ownership of my situation as best I can, and reduce the mounting stress I am feeling.

Apologies if a query similar to this has been covered previously.
 
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I think you probably need to do a Money Makeover and include full details of the loans including, type (e.g. credit card, personal/car loan, overdraft etc.) remaining balance, term, interest rate, etc. in order for others to offer useful feedback.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
What did MABS suggest? Why don't you go back to them?
 
Thank you for your response. It was a difficult message to write as I am coming to terms with the reality.

Their initial suggestion was to call all creditors and try to reduce repayments.

I find the whole situation quite daunting in all honesty.
 
I would encourage you to do a Money Makeover so that people can get the full picture and offer useful feedback based on that.

One key thing is to ensure that you're meeting your mortgage repayments and if you are in difficulties with that at any stage to talk to your lender as soon as possible.
aib.ie

I am... Worried about payments

aib.ie aib.ie
 
Cmd1611 said:
I have made many judgement errors and buried my head in the sand, but need to try to take ownership of my situation as best I can, and reduce the mounting stress I am feeling.
Click to expand...
As others have said you'll need to do a full post, you may need to sit down and think it all out, you are 75k in debt outside of the mortgage , in multiple smallish loans , how did that happen, are you living beyond your means month to month or something else? Is your wife aware?
 
Hello,

Could you rent out a room, in your house, and earn up to €14k tax free, per year ?

Do either you, or your wife, have the ability to increase earnings, even on an occasional or irregular basis ? Is there the possibly of a promotion, overtime, a additional part time job for a while etc. ?
 
This all resulted in a years of mismanagement, and a couple of investments that went south.

My wife is unaware of the gravity, hence the constant smaller loans to keep things ticking over.

Renting a room is not an option unfortunately, given kids are both sexes and need their own rooms.

Additional income is possible on given months/ quarters, however I am far below what is needed for a household month on month.

I am in no way familiar with processes that can be used to make this more affordable, but from what I've researched a PIA seems to be an option for someone with my circumstances?

Thank you for taking the time to respond.
 
The first thing is that you need to try to live within your means. If your wife is not aware of the problem, then she will not know that she is supposed to be cutting back.

You both need to go to MABS and find out about budgeting.

They can probably talk to your creditors for you.

What is the value of your home and how much is left on your mortgage?

The general advice in situations like this is to try to pay off the highest interest rate loans first.

The fact that you are not in arrears is good. You may have to reduce your mortgage payments to interest only for a period to work on clearing the most expensive loans.

The credit card is probably the most expensive. You have to tear that up and try to clear it.

Brendan
 
Cmd1611 said:
I am far below what is needed for a household month on month
Click to expand...
How much is needed for the household? If you come out with a net pay of 4200 and your wife with about 1700 as well as child benefit, it's over 6k a month. Do you know how much you spend each month?
 
Thank you for the response.

Its the lack of disposable income is most pressing issue. After going through some issues, I am out the other side, and wish to clear this mess up.

Our home is valued at €415K approx, with €167K remaining on the mortgage.
 
My debts alone leave me with €1200 approx per month. There is health insurance of €200, car tax, insurance, diesel, property tax and groceries.

This does not leave any room for manoeuvre, or no emergency funds unfortunately.
 
Please do as suggested:

1: Submit Money Makeover using the template

2: Contact your local MABS office. They have templates which they ask you to fill out too.

MABS Money Tools

Piece-mealing information in this thread will not help garner reasoned, well-laid out responses.
 
Folks

Money Makeovers are one of the best features of askaboutmoney but...

they are not required for every financial question.

He has given the key information here with which we can answer his question.

It might seem very easy to people here to populate the Money Makeover format but not everyone has the information so it requires a lot of work.

It is different if someone asks "I have €50k, where should I invest it?".

Brendan
 
Brendan Burgess said:
He has given the key information here with which we can answer his question.
Click to expand...
I disagree but...
Cmd1611 said:
I am 41, have 2 kids, 11 and 13, and a wife who earns €22k pa. She is not listed on any debt other that the joint mortgage.

My net pay is €4200 approx, with motor expenses in addition.
Click to expand...
Let's assume that that's €72K p.a. net household income ignoring motoring expenses and child benefit (€3,360 p.a.). That's €6K p.m.
Cmd1611 said:
My repayments each month are below:

An Post Loan 1: €491.50 (until Apr 29) Bal €17252
An Post Loan 2: €410.51 (until Dec 32) Bal €26887
An Post Loan 3: €171.22 (until Aug 29) Bal €6408
Revoult Loan: €368 (until Oct 30) Bal €17651
AIB Visa : €290 (balance of €7.6k)
AIB Mortgage: €954 ( until 2044) Rate 3.55%
AIB Overdraft: €2500
Click to expand...
And that's €3K p.m. ignoring the overdraft.

In which case there's €3K left for other expenses.

Maybe the situation isn't so grave and the debts aren't "unsustainable"?
Or maybe there's key information missing that a Money Makeover would provide?
 
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Hello @Cmd1611

Thanks for the reply, above, I appreciate that revving a room may not be an option, but keep an eye out for occasional overtime etc.

You really need to tell your wife about the cashflow position. It's not the end of the world, lots of people have made far greater mistakes, and the most important thing here is that you see the problem, and want to tackle it, before any loans fall into serious areas etc.

Between yourself and your spouse, you coukd take a few steps to help reduce spending on the household bills.

Take a look at the grocery shopping, can you buy better by avoiding convenience stores and only shoping in supermarkets, or moving to a different supermarket feel the one you usually go to, possibly using the likes of the Dunes Stores money off vouchers, or by getting your fruit and veg in Lidl or Aldi, for example ?

Can you cut back on nights out, or take aways delivered to the house, a little, perhaps ?

How about utility bills, can you save money by switching suppliers on such things as electricity, gas, TV, broadband ? Take a look at Bonkers.ie for opportunities to save money on these services.

Likewise, look at your house insurance, and motor insurance, when due for renewal and price around to ensure that you are getting the best deals.

Have you life assurance, and / or protection policies ? If so, explore the possibilities of replacing the cover with new, cheaper policies, offered through different companies and / or brokers.

Do you currently have a pension and if so, are you making personal contributions into it ? If so, could they be deferred for 6-12 months, to free up some cash, for use elsewhere ?

You might read this post and thing that these are all relatively small potential savings, but they are all regular outgoings and all add up.

You may quickly find that you can save €100 - €200 per month, and that's net of tax (so equivalent to about €400 per month in gross earnings). Anything you can free up, asking these lines, should be used to help pay off debt, faster.

As the old TV advert used to say, every little helps, so don't leave anything behind... ;-)
 
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