# €8k debt, servicing it at €100/mth not making any dint on capital, unemployed €80/wk.



## TheOnlyWay (18 Apr 2011)

Hi All.

Just quickly bring you up to date!

I have a 8K debt.

I have been servicing it at €100 a month for 2 yrs and it has not decreased at all! In total I have paid almost 4k in payments and interest in 4 yrs!

I am now unemployed and getting €80 a week.

I wrote to the bank to ask them to stop adding interest and charges and I also asked them to stop dipping into my current account as they are now running that into a debt as they are continuing to take out €100 every month from it that I was paying from my loan account. Any money that was in my current account has been gobbled up by the loan account............is this even legal??

I am currently reviewing my financial situation(literally what is below!) and trying to negotiate with them.

They rang and said that there was no way they would do either.....freeze the interest or stop running my current account into debt.....as in making it overdrawn! 

I have looked at the MABS website. Where I originally got the letter to request them to stop interest and charges on my account.

I have no savings, I have €100 cash and income of €80 a week and I have no other assets.

They said I would need to pay a minimum of €150 a month to start cutting into the capital. I requested a final settlement figure for the loan and was told they could not do this.

I know I am in a financial disaster but it is impossible to get blood from a stone! 

I also do not want to default on my responsibilities.

Any advice much appreciated.

Many thanks in advance.


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## Kaz2512 (19 Apr 2011)

What bank are you dealing with?


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## TheOnlyWay (19 Apr 2011)

Hi Kaz,

Thanks for your post. My debt is with AIB.

I was just reading your post on MBNA. I have learned alot!

Do you think that debt recovery is the same method used with every financial institute?


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## Kaz2512 (19 Apr 2011)

MBNA are a complete nightmare!! 
I am quite surprised that AIB aren't more helpful. Have they threatened you with legal action? 

I actually went to MABS and they are fantastic, it might be something to think about, basically they will deal with the AIB for you and make an offer of re-payment on your behalf that will be affordable to you.


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## TheOnlyWay (20 Apr 2011)

Hi Kaz,

Thanks for your post.

No they have not threatened legal action on me. We are only at the start of the process so I am trying to educate myself about it.

I want to pay of the debt as it is something I want to be free of in the future.

They want me to continue paying off interest until i am in a better position financially but as I have read here its just pouring money away. I need to start paying off the capital but I cant do this without charges and interest being added all the time.

Maybe I should make an appointment to see MABS. 

Thanks for the advice.


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## Kaz2512 (20 Apr 2011)

Have you asked the Bank if they would consider freezing your interest the allow you to catch up with the actual loan?


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## TheOnlyWay (20 Apr 2011)

Hey.

Yeah I did write to them and asked them and they refused. They said all that I could do was pay between €150- €200 a month (which is an increase on what I am currently paying) for 6 months and then review it again.

What I have learned from here is that they will continue to take your money and add on interest and charges so therefore I will never actually get to start paying into the capital amount.

I am going to write to them again. 

They are also continuing to take €100 from my current account for the past two months and are overdrawing it which is adding to my debt!!!

I am only getting €80 a week income now which I can prove to them!

Anyway I will see what they respond.

Debt recovery process must be similar in every bank?

Do you think I should get their refusal in writing as I was only told it verbally by them?

Hope your enjoying the sunshine!

Thanks for the suggestions.


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## truthseeker (20 Apr 2011)

OP - can you clarify some things here.

I dont understand where you say you have been paying 100 a month to the loan for 2 years, but then say you have paid 4k in 4 years. Were you paying less to it originally? 

Also - what is the interest rate on the loan? It must be around 15% if you serviced it at 100 a month for 2 years yet didnt make any dent on the capital?

How much was the original amount and how much is left on it now and what were the original terms and interest rate and how much did you pay back from the beginning?


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## TheOnlyWay (20 Apr 2011)

Hi TS,

The loan was for €8500 in 2007. This loan was given to me although I was a student at the time with no guarantor.

I paid €220 a month for 9 months with APR of 8.2%

In October 2008 I decreased payment to €70 a month for 12 months as I was studying and not working.

Then it was reviewed then gain and I could only pay €70 again for 6 months.

Then it was reviewed again and I paid €100 for 6 months.

Then it was reviewed again and I paid €100 for 5 months.

I just got all the credit agreements in the post today! So didn't have the proper figures when I first wrote the post.

Every time the loan was restructured charges and interest was added on to it.

APR now is at 12.147%.

The amount left to pay is €8,600 as my current account is now also in debt!

Surely there is something wrong.

They want me now to pay between €150 to €200 a month for 6 months and then review it again.

I think its time I arranged something to pay off the capital or I could be servicing it forever by the looks of it. I never really questioned it before as I was happy to pay but its going no where and someone pointed that out to me which made me think!lol!

I think as people have said that MABS is a good option.

Just wondering of any other options before I go to them.

Thanks for your post.


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## skyblue1 (20 Apr 2011)

MABs are very good but only give you budgeting advice and helpful solutions. They are well worth ringing.


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## cmrm (20 Apr 2011)

definitely go to MABS asap, my credit card company would not even deal with me until I went through MABs and we wrote the exact same letter!
MABs will assess what u can realistically afford and send them a letter with that amount with a financial statement. they will ask to stop all interest and charges too. It took alot of stress off me.


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## TheOnlyWay (21 Apr 2011)

Skyblue1 and cmrm,

Thanks for the posts.

You are right. I will make an appt with them next week.

Enjoy the sunshine.


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