# In trouble with borrowings



## lilred1 (18 Feb 2009)

Has anyone had the experience of having gone down the MABS route of writing to your bank advising them that you can no longer meet mortgage repayments due to changed circumstances, and will contact them with a payment proposal once you have determined how much you can actually afford to pay once you've reviewed your financial situation?

I am asking this question specifically in relation to Bank of Ireland and would be grateful if anyone could share their experience, as I am actually terrified at the moment.

Some background context: my husband and I have been in and out of work for the past 2 years (me due to ill health and husband due to the economic meltdown) and we have been really struggling to keep up our repayments to:

BOI Mortgage
GE Personal Loan
BOI Personal Loan
Halifax Credit Card (x 2 - one each)
BOI Credit Card
AIB Credit Card

However, we have managed till now by making changes to our lives and by keeping to a tight budget, by using our savings to make up the deficit each month and by ensuring to claim entitlements etc.  We have not missed any payments to anyone yet - but by the end of this month we will not be in a position to pay everyone.  We are now both existing solely on Social Welfare and have nearly exhausted all our other resources.

We are meeting MABS in just under a month from now, there is a backlog of appointments and this is the soonest they can see us.  Meantime we are using their extremely helpful booklet and are planning to write to each of the above creditors advising them of our circumstances and asking them to hold off until we submit a proposal to pay them - albeit much less and over a longer period.

Anyone with direct experience of this route?  Did it work, how did the creditors behave etc?

Very important question:  did it affect your credit rating?  We are a young(ish!) couple with no family as yet but we do hope to start a family once our situation improves so we will need to maintain the best record that we can.  We have never ever defaulted on any payment and have no intention of not dealing with our debts no matter how long it takes.

Would be grateful for any info.


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## PaddyW (18 Feb 2009)

*Re: If you can't meet your mortgage payments...*

Are you claiming mortgage interest supplement?

As regards your credit rating, well, best to ask the companies that themselves directly, although I imagine, that as you are making an attempt to pay them something each month, they might look more favourably on you, as you are not just turning your back to the debts. Make contact with them asap before you run into difficulties.


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## lilred1 (19 Feb 2009)

Thanks for the advice PaddyW.  We're in the process of waiting for the mortgage interest supplement at the moment, forms went in last week and we hope to get it.

We have decided to hold off on letting our creditors know for another month as a family member has insisted on helping us this month.  This is totally unexpected and we're obviously very, very grateful.

Perhaps it will be easier when we have actually sat down with the people at MABS and talked to them about their experiences.  All we want is to have enough information to make informed decisions about our future and about how to deal with this.  Life goes on and we know that these tough times will pass - in the meantime its about how you deal with it that is character forming (apparently!)

I will aim to keep this updated, as I think it might become a valuable source of info for people who may be in the same situation in the coming months.


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## dusmythb (19 Feb 2009)

Hi lilred1,

Would it be possible to consult with your mortgage provider about the idea of rolling the personal loans and credit card bills into your mortgage? (In effect to re-mortgage the existing arrangement.) The interest you are paying on the Credit Cards and personal loans is no doubt excessive.

Further to this do you need four Credit cards? My thought would be to break up three of these, keep just one, and have the credit limit reduced to a realistic amount.

Best of luck.


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## nai (19 Feb 2009)

OP - it would appear from media etc that financial institutions are encouraging people to get in contact with them before falling into an arrears situation allowing them lee way to talk to you and come up with a payment plan to suit you both - with this in mind would you not go speak to the various instutions now and let them know your situation ?

at least then they see how sincere you are about managing your debts and may be in a position to help.


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## lilred1 (19 Feb 2009)

Thanks for the posts!  They are much appreciated.

PaddyW: regarding consolidation of debt into the mortgage, we have indeed considered it and it may be something we revisit after we go to MABS and get their opinion on putting a proposal together for all our creditors.  At this stage, we don't know if BOI would be willing to lend us more money to pay off other creditors.  Neither are we sure that this would be the best way to handle it as we don't know if we'd be able to make the type of payment that they would realistically require. Once we talk to MABS we will have a better handle on this.

The interest on the personal loans and credit cards is a huge factor I know and it makes sense to get rid of these debts in any way possible, including consolidation if we have to.  We have minimised the interest as much as we can.  Of course we don't need 4 credit cards, no one does - we initially had one each (mine with my bank and his with his) and then we each got a Halifax one to take advantage of the 0% interest deal for six months.  We transferred as much as possible from our existing cards (but not the total balance as we didn’t have the credit limit to do so on the new cards) to these two and put as much money as we could afford at the time to paying the higher interest ones whilst chipping away at the 0% interest ones as well.

Our income then took another hit due to my illness so the whole idea of paying off the cards within the 6 months had to be scrapped.  Currently, we are paying the minimum balance on each of the cards.  A ridiculous situation I know.  We have secured the lowest rates possible with each one.  Believe me, whenever we get out of this mess we won't even have ONE card!  We obviously do not use them now, nor have we used them for a long time.

And we do reduce the ridiculous limits we initially held on our old cards as we go along so I have every confidence that we have finally learned our lesson with credit cards!
Thanks again.


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## lilred1 (19 Feb 2009)

NAI:  thanks for your post.
It would indeed appear that financial institutions are encouraging people to contact them prior to falling into arrears. We will most definitely be going to our creditors to tell them we can't pay prior to falling into arrears.  The issue is that before we do, we wondered if many other people have actually done this and what the reactions have been?
We don't really want to do this until we know if they really are sympathetic or is this just the usual rhetoric from companies who pretend to care about their customers?  ( Although, wanting to or not is no longer an option.  In less than 5 weeks time we will just simply have to do it.) It would be nice to know though what we are facing into and if anyone has had this experience and how they found the whole process.
Thanks so much


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## bertson (20 Feb 2009)

You are having a tough time, so hopefully things will improve.
You should really try and meet MABS as soon as possible, is there a waiting list at the moment?. Try you best to get a meeting next week. the sooner you tackle this the better. They will give you very practical advice and help you prepare a plan of action and how to talk to the bank.

Bin your Credit Cards


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## lilred1 (20 Feb 2009)

Awh, thank you for the sympathy Bertson. 

Yes, we have an appointment with MABS in mid-March.  There is a six week waiting list in our particular area.  We did try to get to see them earlier and we knew they would be busy, we just didn't realise how busy.  They can only expedite appointments for those who are going to be evicted from their homes or some other very serious issue, which is understandable really - we are just not an urgent enough case YET as we are not yet in arrears.

Their book is very helpful though and we are working our way through it - its just back the orginal question - has anyone actually been down this route, how was it and did it affect the credit rating?  that I really wonder about...

Thanks again for the post.


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## WaterSprite (20 Feb 2009)

For what it's worth, you sound like one of the most sensible people to ever have mailed this board about your debts.  You are not panicking and seem to be very clear thinking about your situation.  If anyone can manage to get a satisfactory solution from the banks, it sounds like you can.  I wish you the very best of luck with it.


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## ivor james (21 Feb 2009)

I Have been down and am still going down this road. I f there is one thing I can advice you of its this,DO NOT REMORTGAGE YOUR UNSECURED LOANS TO YOUR FAMILY HOME, I put this in bold print because I cannot emphasise it enough, I did and now my mortgage is 60k higher than it would have been,remember there is SECURED AND UNSECURED debt. Yes you will lose your credit rating when you offer your lenders less make no mistake about it,but that is the least of your worries now,try to hold on to your home at all costs,if you want more info PM me.


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## adonis (21 Feb 2009)

ivor james said:


> I Have been down and am still going down this road. I f there is one thing I can advice you of its this,DO NOT REMORTGAGE YOUR UNSECURED LOANS TO YOUR FAMILY HOME, I put this in bold print because I cannot emphasise it enough, I did and now my mortgage is 60k higher than it would have been,remember there is SECURED AND UNSECURED debt. Yes you will lose your credit rating when you offer your lenders less make no mistake about it,but that is the least of your worries now,try to hold on to your home at all costs,if you want more info PM me.


 
Excellent advice.


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## horusd (24 Feb 2009)

Hi there, sorry to hear the problems you are facing. I did get into debt and happily am back out of it a few years. I had to write to banks and phone them as well.  It wasn't pleasant and I was worried sick - but in the end they accepted the payment plan that I offered. I have since got my credit rating restored and its fine now - a bad credit rating isn't forever. One thing that helped was to ask the CC companies to freeze the interest, they may not do it, but its worth asking - you could check this with MABS as well. Best of luck


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