Looking for advice on Financial Mess please

R

Rois

Registered User
Messages
673
I have just started facing up to the financial mess I am in. I haven't gone to MABS yet but am considering it. Would appreciate advice on which debts I should tackle first. Here is a broad outline of my current situation. All advice appreciated.

Age:
44

Spouse’s/Partner's age:
None

Annual gross income from employment or profession:
6,000
600 pcm from 2 lodgers rent-a-room scheme

Type of employment: e.g. Civil Servant, self-employed
Retail Part-time employed 10 hours per week
Other self-employed 10 hours per week @ €10 per hour
New Internet business (partnership) no profit as yet

In general are you spending more than you earn or are you saving?
Spending way more than I earn

Rough estimate of value of home
380k

Amount outstanding on your mortgage:
No mortgage

Other borrowings – car loans/personal loans etc
Credit Union loan €14k
3 UK Credit Cards £12k STG
Irish Credit Card €4k
4,000 owed to family, accountant etc.

Do you pay off your full credit card balance each month?
No, can only afford mininum payment but even miss this some months and have to suffer the charges.

If not, what is the balance on your credit card?
12k Sterling
4k euros

Savings and investments:
SSIA 5,000 (losing money)
UK ISA 20k sterling (losing money also)

Do you have a pension scheme?
2 small pensions from UK employment

Do you own any investment or other property?
No

Ages of children:
None
3 dogs cost approx 140 euros per month for food,
insurance, vet bills

Life insurance:
None
UK endowment policy, I pay 34 STG into each month. Matures in 2012.



What specific question do you have or what issues are of concern to you?
My main concern is to start clearing my debts, especially the credit cards and money owed to family and accountant. I am transferring some money to UK cards now that euro/sterling rate is better.
 
Hey the great news is no mortgage!
I would say cash in the SSIA and ISA and pay off the credit card and visit MABS to create a payment plan to pay back the rest that your owe- live within your means thereafter.
Perhaps a small mortgage against your house could be the way to free up €€ while you have the lodgers paying it back for you.
 
As stated, you have no mortgage which is superb.

Use your savings to pay off a large chunk of the debt and try to get a job which will bring in more income/increase your hours in your current job.

I run a couple of websites myself so I can tell you it may be a long time (years) before your website starts making a profit.
 
Thanks for replies and I agree not having a mortgage is a lifeline. I am reluctant to cash in the SSIA/ISA as maybe they will increase in value when the stock market improves (they're both in equity funds not deposits). But, if you think it's best, then I will do that.

I am interested in the suggestion that I could get a small mortgage against my house - how would I go about this and over what period of time? I will have about 35k STG when my endowment policy matures in 2012.

I have asked work for extra hours over Christmas & New Year sales, but nothing definite yet as business is slow. Having problems getting a second job - started one last Friday and lost it on Monday!

The web business not likely to bring in rewards for a good while yet. We have financed the set-up and marketing ourselves so it's costing us money at the moment.

The lodgers are a god send, I only advertised the rooms in September on daft.ie and got loads of replies, plus they pay me in cash. However, this really just covers bills eg car, ESB, Gas, insurance, sky, etc etc.
 
If I were you I'd immedately use my savings to clear most of the debt, and I would definitely not get more debt (especially long term debt!) by getting a mortgage.

As someone who has been reading this forum for years, people who take on more debt rather than remove their existing debt normally end up getting in a bigger mess...

Good luck.
 
I love my dogs ..... they eat better than I do at times!

Don't underestimate the use of dogs .... great company, great excuse for a walk etc.

Suggesting the OP sells his dogs is like asking him to sells his children .....

Looking at what some children cost to bring up ... the €140 he spends on his dogs is cheap in comparison!

One thing I would ask the OP to check out is the possibility of sourcing cheaper dog food .... I get all mine in Lidl ..... dog nuts, treats, sausage type chubs ... the lot ... and it's quite reasonable. €50 keeps my two large dogs fed for 2/3 weeks.
 
I’d cash in your UK ISA. This will enable you to clear both credit card debts, pay back your family and take a lump off the Credit Union loan.
What’s the current value of the endowment policy?
You have very low expenses as you have no children and no mortgage so any extra income will make a big difference. Therefore I’d look for any part time work, even at minimum wage, you are only working 20 hours a week so it’s not as if you couldn’t find another 10-20 hours.
 
Get rid of the dogs - no way, that is absolutely non-negotiable. I am also kind of reluctant to put them on cheap dog food (full of additives and meal) as I plan to breed from 2 of them in the future.
I am looking for extra work all the time, but hard to come by here.
So is cashing in my UK ISA the best option, rather than getting a mortgage - am inclined to agree. Not sure of the current value of my UK endowment, will check it out, but on maturity (in 4 years) it's about 35k sterling so I would rather keep that going than cash it in now.
Thanks for replies and giving me options to consider.
 
You're spending nearly a third of your earnings on your dogs though... as a result you've gotten yourself in debt!

I agree you should keep your dogs, but you need to start looking after yourself too. :)

Don't get a mortgage... seriously, don't do it!
 
Flax said:
Don't get a mortgage... seriously, don't do it!
Click to expand...

well - he has credit card/credit union loans totaling €36,000.
I'd rather have a 36k mortgage @ 4.5% over 10 years rather than 36k @ 15% over many more years !!

OP - how are you managing the payments on your credit cards/credit union at the moment ? The interest alone on those must be around €400 a month ?
 
I have DDs set up to pay minimum on each of the credit cards, though often no funds, so I end up with late fees etc. I have stopped using the cards now, but the interest payable is:

Irish Credit Card: €51 per month
3 UK Cards: £250 STG per month

That's just the interest part.

Payment on my CU loan is €310 per month.

Other posters are advising strongly against getting a mortgage.
 
Have a word with your Credit Union. You may be able to extend your existing loan enough to clear the credit cards. You could then use what you're paying off the credit cards to repay the loan. Or you may be able to negotiate making a lower payment on your CU loan for the time being. It's worth asking, at least.

Failing that, try switching your credit cards to ones (or even a single one) that offer an interest-free period. If you take a look at www.itsyourmoney.ie, they have a section that shows all the current credit card rates and offers. Not paying interest for a few months might give you a little more breathing room.
 
Might he have difficulty getting any type of mortgage with little income coming in and some missed repayments on his cc.
 
PaddyBloggit said:
Suggesting the OP sells his dogs is like asking him to sells his children .....
Click to expand...

I find it repulsive and offensive to even compare children with dogs. I hope you meant this tongue in cheek but to be honest its gross.

i think the op should sell the dogs and get out of debt.
 
Selling my dogs is not an option. I would rather sell my house and down-size if necessary, than the dogs.
 
Rigoletto said:
I find it repulsive and offensive to even compare children with dogs. I hope you meant this tongue in cheek but to be honest its gross.
Click to expand...

In fairness I dont think Paddy was comparing dogs to children. He was inferring that his dogs were very important to the OP.
 
Rois said:
Selling my dogs is not an option. I would rather sell my house and down-size if necessary, than the dogs.
Click to expand...

As others have pointed out you should look into cashing th UK ISA or if this is not an option go down the loan consolidation route through your local credit union.

I wouldnt sell the dogs either, they offer so much comfort at a time when one might be stressed...
 
Are you or your partner claiming any social welfare payments such as Jobseeker's Allowance?
 
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