# EBS refusing to extend interest only; net income €5,100 per month



## frosty (29 May 2013)

Would be most grateful for advice/help.*

Personal and income details
*Net (i.e. after tax) Income self: €3,400per month approx., public servant
20+ years service, worked my way up through the grades. Income has been hit over past 2 years with pay cuts, pension levy, croke park etc.
Net income partner/spouse: €1,700 per month, public servant
Secure, permanent employment, part-time
We are both in our mid-40s, 3 children, €390 per month childrens allowance

*Home loan
*Lender: EBS
Amount outstanding: €369,000 in total.  €230,000 on main loan + 2 top-ups of €92,000 and €47,000.  Approx. 21 years outstanding on 30 year loans.
Value of home: approx. €300,000
Interest rate: 1.74% tracker on main loan and €92,000 top-up, 4.33% SVR on the €47,000 top-up
  Monthly repayment:  Full payments approx. €1,750 per month.  Have been paying interest plus a small amount of capital approx.. €1,000 for 2 years
Amount in arrears approx. €10,000

  We went on interest only initially for a period of 6 months as we were going further and further into short term debt trying to make full payments on all 3 loans.  This has been extended 3 times to a period of 2 years in total.  Standard Financial Statements submitted for each renewal period.  EBS have rejected our most recent request for an extension.  They want us to return to full payment on all 3 loans with arrears capitalised, no other options given.  We appealed through the MARP process.  The appeal was rejected.  Again, no alternatives offered other than to return to full payment and “significantly reduce” our payments on unsecured debts.  I’ve written to them again requesting a meeting to discuss alternatives.  If that’s unsuccessful I will have to appeal to the Financial Services Ombudsman as there is no way I can make full payment on all the loans currently.  I've explained that we are in a position to pay more than interest only but not the full payments.

  Unsecured debts are outlined below.  All have been renegotiated over the past 2 years.  I've really made a big effort to tackle our debts and get out of trouble.  The Credit Union extended our term to 10 years, all credit cards have been cancelled and payment plans put in place (with great difficulty) at 0% interest.

*Other loans and creditors - *delete those which don't apply to you
Overdraft:  2 current accounts.  Approx €5,000 owed in total.  Interest approx. €60 per month
Credit Cards (All cards have been cancelled with the following payment plans in place):
  Santander - €7,600 owed, paying €100 per month, 0% interest
  AIB - €5,400 owed, paying €50 per month, 0% interest
  PTSB -€5,500 owed, paying €60 per month, 0% interest
  MBNA/Avantcard - €4,500 owed, paying €85 per month, 0% interest
Credit Union e.g. Loan of €18,900 against shares of €1,500.  Net balance of €17,400 owed. Payment is €285 per month over 10years (7 years and 4 months remaining)

*Other savings and investments 
*None*

How important is retaining the family home to you? 
*I really want to keep the family home but I cannot sustain large mortgage payments for years to come. I really need to clear my short term debt first. I think it's possible to get back on track and I've gone a long way towards doing that with my short term creditors.  I need more co-operation and assistance from my mortgage provider though.

*What is your preferred realistic outcome? 
*We know our income is good and our employment is secure.  We have cut our expenditure to the absolute minimum but we are still struggling to pay our debts and we are always in dire straits to sustain payments.  We are in big trouble if a car breaks down (we have 2 old ones) or if there are repairs to the house etc.  Outgoings in connection with the (3) children are also very high i.e. various medication, orthodontic treatment, college fees coming down the road etc. etc.  We are constantly broke!!

Ideally if the building society agreed to park the top-up loans for a period of 5years (split mortgage ?).  That way I could make full payment on the main mortgage and reassess the situation in 5 years when my shorter term debts are cleared.  I intend to put this to them if I can arrange a meeting but I am not hopeful that they will accept it.


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## manninp2 (29 May 2013)

You'll be grand.

You've a net monthly income of 3400+1700 = 5100

Reasonable living expenses (incl. Childrens Allowance) for 2 Adults + 3 Children + Vehicle = 2460

Full Mortgage Payments = 1870

Leaves you 770 a month to service the unsecured debt via a Debt Settlement Arrangement

Relax in the comfort of two public sector pensions coming your way, the fact that your home has a cheap tracker and never, ever touch a credit card again!


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## Codogly (29 May 2013)

*Crippled by mortgage arrears and short term debt...*

Am i missing something here ...Monthly

Total Income    5,490.00
Total Debt 
servicing cost    2,390.00

Excess             3,100.00

Surely 3,100.00 is more than enough to live off ...?


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## Brendan Burgess (29 May 2013)

Hi frosty

You have a net income of €5,100 per month - before childrens' allowances 

According to the Insolvency Service of Ireland, the [broken link removed] would be



couple with One car necessary for work| €1,360
3 children (assuming 3 at secondary )|1117.79 after child benefit
Total|€2471.79This would leave you around €2,600 per month towards your creditors. 

It seems to me that you can comfortably afford your repayment of €1,750 per month towards your mortgage. 

You then have €45,000 of unsecured creditors which you have €850 towards.

I really don't see why EBS should be asked to extend credit to you at 1.74% so that you can pay off your unsecured loans.  EBS seems to have been very  reasonable:



> We went on interest only initially for a period of 6 months as we were  going further and further into short term debt trying to make full  payments on all 3 loans.  This has been extended 3 times to a period of 2  years in total.


They have foregone significant payments of capital which is in effect giving you a cheap loan so you can pay off expensive loans. 

*I suggest the following 
*Check out the ISI's Reasonable Living Expenses 
Go to MABS to get help with budgeting 
Get rid of one of the cars 
Forget college for the kids - you can't afford to send them to college.
I note your spouse is working part-time. Could this be increased to full-time?


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## alica (29 May 2013)

jusy made a calculation nd 2 more people jumped before- we are surely missing something ? 
even considering childcare for 3 kids ( 1500 ?) and petrol, if you commuting ( eg. 2* 300), you still have at least a 1000? 
why are you on interest only?


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## Brendan Burgess (29 May 2013)

manninp2 said:


> Leaves you 770 a month to service the unsecured debt via a Debt Settlement Arrangement



Is a Debt Settlement Arrangement necessary? 

€770 x 12 x 5 years = €46,200 not far off the €48,000 of unsecured creditors. 

I wouldn't waste €7,000 on a Personal Insolvency Practitioner.


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## manninp2 (29 May 2013)

Brendan Burgess said:


> Is a Debt Settlement Arrangement necessary?
> 
> €770 x 12 x 5 years = €46,200 not far off the €48,000 of unsecured creditors.
> 
> I wouldn't waste €7,000 on a Personal Insolvency Practitioner.



A formal one via a PIP wouldn't be.

They've effectively already negotiated an informal one themselves.


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## STEINER (29 May 2013)

On the face of it your current net income of ~ €5.5k per month is generous enough to live on and pay your mortgage.  You apparently had much higher income until two years ago as you have since endured pay cuts, pension levy and croke park.  You need to perform a complete analysis of all your current expenditure and change your lifestyle radically. Eliminate waste completely, no more luxuries and treats.  A mortgage would be a person's main financial liability, but you have spent another €92k loan and also a €47k loan.  What was this spent on?  What did you use the credit cards to buy?  It appears to be excessive spending.  Also, I am shocked with the CU loan of €19k.  As a CU member myself, I find it shocking that you were able to get that loan with €1.5k of shares.

You are where you are.  Itemise all your spending.  Draw up a budget.  You need to buy essentials only.  Overspending has got you into this situation.  Prudence and a disciplined approach will get you over this temporary obstacle and you can enjoy your life with your kids.


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## emeralds (29 May 2013)

Sounds like your spending is out of control and you are unwilling or unable to stop it...Be ruthless - write down every single cent that you spend, see where you are still spending needlessly...


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## ashambles (29 May 2013)

> You apparently had much higher income until two years ago as you have since endured pay cuts, pension levy and croke park.


Pedantically, the ps pay cut was 2010, the pension levy 2009, CPA was also 2010. In the last two years - general taxation has been the problem for everyone.


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## demoivre (30 May 2013)

> I've explained that we are in a position to pay more than interest only but not the full payments.



Do this without their agreement and call their bluff.


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## Bronte (30 May 2013)

demoivre said:


> Do this without their agreement and call their bluff.


 
But she can afford to pay it, unless there are facts that are missing,  so why is this necessary?


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## demoivre (30 May 2013)

Bronte said:


> But she can afford to pay it, unless there are facts that are missing,  so why is this necessary?



Clear up much more expensive short term debt/raise emergency money. The op has a 1.74% tracker on the bulk of the mortgage debt and should use it to her advantage. The two overdrafts are probably at 13% and the CU loan at 10%. Personally would pay nothing on the mortgage for a year( if real pressure comes on from the bank resume payments) , and use the €21000 saved as I saw fit. Most typical couples will have their kids sorted by the time they are in mid to late fifties ( the parents that is !! ), so plenty of working life time remaining to sort out the mortgage.


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## frosty (30 May 2013)

*Thanks for feedback, options*

Hi all,

Thanks a lot for comments and feedback on this.  It has really been an eye opener.  I would ask that people not judge the situation we find ourselves in. Yes, our income was (and still is) good with only 2 children to support.  We were very careless with money and extravagant at times for a long period of time. We never missed payments but we were constantly borrowing, topping up and using credit cards to keep on top of an ultimately unsustainable situation.

The situation came to a head approx 2 years ago when all credit avenues dried up, our pay was cut and we simply couldn't go on the way we were.  To give a bit of further information and to address some of the points raised:


2 of our childen are teenagers (secondary school), the 3rd has just started Pimary school.  My wife works part-time (mornings) which means we don't incur childcare costs. The cost of returning to work full time would currently outweigh the after school childcare costs.  She intends to return fulltime once our youngest is in secondary school.


With 3 children at school and both parents working, getting rid of one of the cars is not an option.  One car is 10yrs old and the 'good' car is 5yrs old.  Neither is an extravagant make or model.
If any of my children get a place in college (down the road) I will move heaven and earth so that they can go.  They will be restricted however to the local area and they know this already.
Most posters suggest that €3,000 or thereabouts (gross of Childrens Allowance) should be more than adequate for a reasonable standard of living.  I have revisited the figures I submitted with my EBS Standard Financial Statement and I reckon we must be overspending in the region of €400-€500 per month.  My budget is outlined below.  Please note fairly high medical and dental expenses as children are asthmatic and one is receiving orthodontic treatment.  The headings used are the EBS SFS ones.  Would be grateful for comment on these but would appreciate if people could just help without being judgemental (thanks):
         Utilities   
      Electricity   130        Gas   127        Phone   50        TV/Cable   26        Mobile Phones (x4)   90        Refuse Charges   35        TV Licence   14        

      Household   
      Childcare   0        Elderly Care   0        Food/Housekeeping/Personal   Care   1,000        Clothing & Footwear   200        Household Repairs/Maintenane   100        

      Transport   
      Petrol   303        Insurance/Tax/NCT   137        Rail/Bus/Taxi   0        Car Maintenance/Repairs   50        Car Parking & Tolls   10        

      Mortgage Costs   
      Mortgage Protection   0        Payment Protection   0 (incl in Mortgage payment)       House Insurance   34        

      Education   
      Books, fees, uniforms,   activities (x3)   200        

      Medical   
      Medical Exps &   Prescriptions   200        Health Ins   0        (deducted from salary) Dental Exps   200        

      Social   
      Family events, birthdays, Xmas   etc.   100        Club Memberships   50        Birthday gifts, Xmas gifts   etc.   100        Haircare   50        Property Tax   20        

      Contingency (always   something!)   200        

      TOTAL   3,426

Even based on the above figures, I realise now that it should be possible to return to full payment on the mortgages.  demoivre makes a good point about clearing expensive short term debt first but I wouldn't dream of simply not paying the mortgage for a year.

If I returned to full payment on the 2 smaller ones I'm wondering if I could just pay a small amount (interest basically) to the main one and make an effort to clear the credit card debts over the next 12 months.  Once that's done I could realistically return to full payments on all 3.

All 4 credit cards (Santander, AIB, PTSB, Avantcard) are cancelled (I'll never again own one!) and payments to all are on 0% interest arrangements.  The Avantcard one was recently acquired from MBNA and I've just received notification that the Santander one is being sold to Arrow Global Management Limited.

I could for example offer €1,500 to Avantcard (34%) but I could only pay it at say €500 per month over the next 3 months.  If that was successful then 3 months later I could offer say €2,000 to PTSB at €500 over 4 months and so forth.  I've seen a lot of postings on this forum about settling credit card debt but I'm afraid to offer anything at the risk of jeopardising my existing arrangements which I am adhering to.  If final settlements are on a final payment up-front basis then this would not be a runner for me as I simply don't have the cash.

Finally, thanks once again to people for their advice and help.  Once again, I acknowledge the 'sins' of our past.  I just want to put things right, to get back on track and to get on with the rest of our lives.


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## DrMoriarty (31 May 2013)

I'm not going to cast any stones; I too am a public sector employee whose take-home pay is already down about 20% compared to two years ago, and with a further cut to come from next July, so while I don't have large debts I do know about declining disposable income and rising overheads. I'm also the sole wage-earner so pay more tax.

If you don't have a way of increasing your income, you simply have to reduce your expenditure. A euro saved is two euro earned, etc.





frosty said:


> Utilities
> Electricity   130        Gas   127        Phone   50        TV/Cable   26        Mobile Phones (x4)   90        .


I see scope for some savings right there for a start. Small, but very easy to achieve without having to "give up" anything.


Check you're getting the best value electricity/gas on www.bonkers.ie, and change if you're not. I did (again!) recently, and saved myself nearly €180pa, or €15/month.
€76 a month is a lot for landline & TV. You could easily get that down to €45/€50; see www.uswitch.ie.
We have five kids, and the seven mobile phones now cost me a flat €10/month each with www.48months.ie (so €40 down from €90, in your case). 
There's close on €100/month in savings straight off. €1,200pa saved (= about €2,100 of your gross earnings) just for shopping around and filling in a few forms online? Apply the same principle to your car/home/health/life insurance. Switch to a fee-free current account, if you're paying for one now. Spend a bit less on presents/socialising/"luxuries". Walk to the shops instead of using the car. A penny here, a penny there...

I'm sure others here will be able to offer more expert advice on the question of debt restructuring. If the four credit card companies are leaving you on 0% interest I'd be reluctant to mess with that. Try to build up a contingency fund in case that turns sour and, as demoivre says, target the overdraft and the high-interest loans first.

And remember — as I do when I start feeling sorry for myself — that you both at least have secure employment. Many don't.


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## Bronte (31 May 2013)

frosty said:


> I would ask that people not judge the situation we find ourselves in. We were very careless with money and extravagant at times for a long period of time.
> 
> Electricity 130 Gas 127 Phone 50 TV/Cable 26 Mobile Phones (x4) 90 Refuse Charges 35 TV Licence 14
> Food/Housekeeping/Personal Care 1,000 Clothing & Footwear 200 Household Repairs 100 Petrol 303 Insurance/Tax/NCT 137 Car Maintenance 50 Car Parking & Tolls 10 House Insurance 34 Education (x3) 200 Medical Exps 200 Dental Exps 200 Social/Family events,100 Club Memberships 50 Xmas gifts etc. 100 Haircare 50 Property Tax 20 Contingency 200
> ...


 
To be honest Frosty I wasn't going to post in reply to your first post but now that you've come back with more detail and acknowledgement it might be worth the effort. But there will be some hard questions and suggestions.

Where's the life insurance? I suppose public servants get a death in service benefit and a payout monthly so it wouldn't strictly be necessary, but it's something that is important to look at when there are 3 children etc. 

2 kids not 3 to support - you said this in post 1?

Health insurance, you're apparently covered for this by your employer, why then is there still annual costs of nearly 5K? Is there anything that could be put off for a couple of years, or any chance of getting it done on the public system. 

Is any of the credit union money going into shares? What's the interest rate?

Very glad to hear that you will never have a credit card ever again. There are options for prepaid cards, because nowadays it's nearly impossible to live without some kind of card.

How is the money withdrawn to pay bills? In cash, daily weekly, is it a set amount? Who is managing the cash flow? How are lunches at work handled. You ABSOLUTELY need a daily spending diary for everybody.

Justify 5 phones for 2 adults (who have work phones ) and 3 children?

One of you is going to have to become an ESB nazi. This means changing the attitute to electricity. There should be a target set to get that and the gas bill down and everybody has to get on board. For the heating, put on sweaters and don't heat some rooms. Use hot water bottles and duvets as needed. 

The vague 1000 grocery bill is going to have to gone through line by line? Where do you shop would be the first question on this?

1200 a year on haircare is outrageous by anybodies standards ( it reminds me of the 'professional civil servant' lady). I got a child's of mine's hair cut for 8 Euro's in Ireland in the last month, and a couple of years ago my husband got all of their hair cut for 4 Euro's apiece. Other than that I cut the kids hair myself (badly it has to be said). 

Just to clarify the above which might seem extreme to you is based on your predicament. 

*Settling credit card debt*

While this is a good idea, to settle for less than the debt, you do not have the money to do so.

*Spouse on part time*

Would your spouses salary be double if full time? If so then I don't see how it's justified her staying at home. What ages are the children. Would an au pair not be a much better option, your youngest must be at a minimum going on 5 or 6 if already in primary?

How much exactly would after school care cost? You're suggesting another 7/8 years before she works full time, while sinking under this burden of debt. With that extra income you would be able to make real inroads into tackling the debt in no time and getting some kind of life back.

*Not paying mortgage to EBS *

You mentioned that you would like EBS to park the mortgage for a few years on interest only to suit the fact that in essence you don't want to really tackle your debt, I do realise you've made a lot of progress, but you've not gone far enough it seems to me. The EBS have been more than good to you already. If you even think of not paying them as per Demoivre's suggestion I could see you losing that valuable tracker, them ordering you to pay no other creditors and the creditors going after you for instalment orders or judgement mortgages. 

*Negotiation skills*

It has to be acknowledged that you've done an amazing job in getting all your debts to zero interest. Well done on that, and how did you do it, it would be of benefit to others on here to know. Did you have professional help or a good friend help you? Maybe the person that managed to negotiate that would be able to 'persuade' the EBS to keep you on interest only. But with that tracker and those incomes I cannot see EBS going for it. If I were them I wouldn't go for it either.

*Finally*

Being a curious creature and I just have to know, but you don't have to reply to this question, please tell me that the good times were really good, that you saw the Taj Mahal, that you bought a wow car, that the kids went to Disney, that you have an amazing house, that Diarmuid designed your garden and that you lie in a fabulous jacuzzi in the back garden.  I probably shouldn't ask you that last question but it's in my nature.


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## frosty (31 May 2013)

*Thanks DrMoriarty*



DrMoriarty said:


> Check you're getting the best value electricity/gas on [bonkers.ie], and change if you're not. I did (again!) recently, and saved myself nearly €180pa, or €15/month.
> €76 a month is a lot for landline & TV. You could easily get that down to €45/€50; see [uswitch.ie].
> We have five kids, and the seven mobile phones now cost me a flat €10/month each with [48months.ie] (so €40 down from €90, in your case).



Thanks very much DrMoriarty for this really helpful advice.  Our landline contract runs for another 6 months. At that point we are going to go broadband only (no landline) which should cut €20 or so off that bill.  Will definitely check out 48months and bonkers re mobiles and electricity/gas.

Thanks again.  Much appreciated.


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## demoivre (31 May 2013)

Bronte said:


> If you even think of not paying them as per Demoivre's suggestion I could see you losing that valuable tracker, them ordering you to pay no other creditors and the creditors going after you for instalment orders or judgement mortgages.



Nope they can't take her off the tracker to put manners on her because she goes in to arrears. 

They can do all the ordering they like, it would be 100% unenforceable. Op enters in to MARP and repossession proceedings can't be instituted for a year. In practice it will be a lot longer and in the meantime repayments will have been resumed. No chance of bank looking to repossess imo.

Unsecured creditors will be still getting their money only faster so no issues there !

The op is in a strong position given affordability and cheap tracker and She should use these to her advantage. The only downside is a shot credit rating but that's already the case. In the overall scheme of things an extra year on the mortgage will make little difference in nominal terms and very little difference in real terms.


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## ashambles (31 May 2013)

I think the OP should figure out why things got tight around 2 years  ago. While it might be comforting to blame an external factor such as  the pay cut and pension levy, the timings seem to be wrong. As stated before the cuts mentioned have been in place longer than this. The pension levy came in around march 2009 - over 4 years ago.

Time flies but there seems to be a collective amnesia as to when  the cuts happened, let alone as to how much it cost workers.



> Income has been hit over past 2 years with pay cuts, pension  levy, croke park etc.





> You apparently had much higher  income until two years ago as you have since endured pay cuts, pension  levy and croke park





> approx 2 years ago when all credit  avenues dried up, our pay was cut





> I too am a public  sector employee whose take-home pay is already down about 20% compared  to two years ago


I live in a household where there is a public sector salary, so know  that all the above statements aren't accurate. In our case we're  fortunate due to where we were in the increment scale and the 4 years of  increments have largely reversed the pay cut and pension levy - the last two  years alone saw a net increase of around 4% - and this isn't uncommon in my experience.


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## frosty (31 May 2013)

*Reply to Bronte*

Bronte,

As briefly as possible:

Life assurance which I pay for is deducted at source from my salary so is therefore not included as an expense item.  It's arranged (along with an income continuance plan) at a good price via my trade union.  We also have minimum life cover on the mortgages of course.

Yes, 3 kids to support.  What I said was that our income was good while we were only supporting 2.  Our 3rd is much younger than the other 2.  See subsequent bullet point.

I pay health insurance to the VHI.  It costs €1,700 per annum and again, it's deducted at source from income so isn't included in the expenditure list.  It's a basic package primarily for hospital cover if needed and I shopped around a lot for good value this year.  It doesn't (like most basic packages) cover a lot of the expenses in relation to asthma, orthodontics or other conditions.  Without going into any further personal detail there is nothing that can be "put off".

No money going to shares in the credit union. Interest on loan is 7.99%

We use Visa Debit Cards now which are effectively prepaid credit cards.

Most bills are paid online with a few by direct debit.  They're closely monitored.  We bring our own lunches to work.  We manage the cashflow between us and communicate about everything.  We would have been a bit weak on this up to 2 years ago.

2 adults and 2 teenage children = 4 mobiles plus a landline.  There is only one workphone (me).  Phone credit = €20 x 3 plus 1 bill-pay €30 = €90.  Will be looking at very helpful advice given by DrMoriarty to reduce this a bit.

We shop primarily in ALDI now.  €1,000 is actually a bit under the standard recommended in the Guide to Reasonable Living Expenses 2013

Haircare is €600 per year or estimated at €50 per month. Read again.

Salary would be far from double on resuming fulltime as all additional earnings would be at the highest rate of tax.  Neighbours and friends have had au pairs in the past.  They rarely work out.  Our children now have a parent at home every day after school.  This to us is worth any money.



Bronte said:


> *Not paying mortgage to EBS *
> 
> You mentioned that you would like EBS to park the mortgage for a few  years on interest only to suit the fact that in essence you don't want  to really tackle your debt, I do realise you've made a lot of progress,  but you've not gone far enough it seems to me. The EBS have been more  than good to you already. If you even think of not paying them as per  Demoivre's suggestion I could see you losing that valuable tracker, them  ordering you to pay no other creditors and the creditors going after  you for instalment orders or judgement mortgages.



Quite the opposite and quite an offensive comment actually.  I'm asking my long term lender for a little more leeway (another 12 months or so) in order to clear short term debt and get back to paying what I should be paying them for the next 20years.  Might be worth your while to take note and reread the following:



frosty said:


> Even based on the above figures, I realise now that it should be  possible to return to full payment on the mortgages.  demoivre makes a  good point about clearing expensive short term debt first but I wouldn't  dream of simply not paying the mortgage for a year.



I went to MABS and sought advice on clearing the credit card debt.  I cancelled all cards, wrote to all of them using MABS templates, filled in their Standard Financial Statements and negotiated payments down to the minimum bearing in mind that the mortgage is more important in the long term.  It will take 6 to 7 years to clear what I owe. If I had breathing room on the mortgage for another year.  I think I could clear the bulk of the debt via settlements particularly seeing as 2 of thedebts have since been sold on.  Do you still think that I "don't want to tackle [my] debt"?



Bronte said:


> *Finally*
> 
> Being a curious creature and I just have to know, but you don't have to  reply to this question, please tell me that the good times were really  good, that you saw the Taj Mahal, that you bought a wow car, that the  kids went to Disney, that you have an amazing house, that Diarmuid  designed your garden and that you lie in a fabulous jacuzzi in the back  garden.  I probably shouldn't ask you that last question but it's in my  nature.



The "good times" meant that we were able to trade our way up from a 3-bed semi to a modest 4-bed detached in a nice area.  Were we careless along the way?  Certainly. Did house prices spiral? Was credit too readily available?  Did banks lend wrecklessly?  All true.  Mostly our own doing but they played a hand in it too.  We didn't see the Taj Mahal mind you and the "wow car" was a 3 year old MPV that we traded down when the kids got a bit older.  They haven't been to Disney and the postage stamp garden is maintained by myself thankfully.  No room or requirement for a jacuzzi.

You certainly are a "curious creature".  I appreciate your input though despite the fact that you appear to be quite judgemental at times.  Perhaps a final word of advice from me to you though.  Consider taking some time off work to spend with your kids - it won't cost that much and they'll value it more than time spent with an au pair.  If they are teenagers get them some decent haircuts and a couple of cheap mobile phones.  If they need braces, glasses, retainers etc fork out for them.  Image is everything in their world whether we like it or not and I would imagine you're frugal enough to afford it.

Thanks again.


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## alica (31 May 2013)

hello frosty,
I hope you won't get offended my post,
but your post looks really more showing off then looking for advice...
let explain what I mean on my family example , our combined salary is *3700 BEFORE* mortgage 1300, childcare for 2 kids 1000 and 600 diesel expences ( we are living in country side with no prospects of work around and have to travel 50miles each in opposite directions),
what left us with 800 net for everything... +260 child benefits...
yet we are still managing and we do not think , that our mortgage is "unsastainable" , it is tough, yes, but not unpayable yet... maybe we should start to think so ...

When I see your budget and see expences like - €200 for books and uniforms (every month?) , €200 - xmas and birthday presents (every month?) and MISCELANIOUS €200 (every month as well!) that makes me feel...mmm... a little annoyed...

you kids are having HUGE advantage already having* you* home half-time, so there is no need to spoil them with additional €400 ...

by the way, you did not include your child benefits in income...


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## pebbledash (31 May 2013)

Hi Frosty

Well done on putting your figures up. It's hard to have your figures analysed by others and be open to misperceptions and judgement. I have often thought that as people compare their figures to others that they can miscalculate their own minimum spends. I've often taken the high moral ground reading figures here only to realise that I spend a bit more than I think I do sometimes.

Here is my honest assessment of what we live on as two adults.
Our combined income after mortgage & life insurance is €2188.
We run one car and my spouse has opted to use public transport and has an annual travel ticket deducted at source from wages - making use of the tax break for transport.
For the last few years my own training expenses have brought our monthly income down to €1,950.

We do a monthly shop spread across Tesco, Aldi & Lidl =€240.
We top up with fruit, veg, milk to about €160 a month. So €400 max a month on shopping for 2 adults. Given that some of this would be non food items I'm confident I could keep 5 of us in groceries and personal care for €700 a month.

Every month I check the price of our shopping list online at Tesco's site. I note the prices and then go to Aldi online to see what their offers are and do the same for Lidl. Automatically doing a full shop in Lidl or Aldi can mean you are missing offers in other places. I then go to lidl, aldi and local veg shop with price checked list and only buy what is actually cheaper there. I plan all of our meals and freeze meat in portions on a monthly basis. I throw out nothing and freeze everything that is in danger of going off.

I still prefer branded products for things like cereal, pasta sauces, yogurts etc. I have also found many brands that I prefer in Lidl and Aldi. I bake and keep a good stock of scones etc to always have something nice to hand. We eat really well and have found that the monthly shop does not have to be a major expense. I refuse now to buy branded hair care products, face creams, toiletries, household products. By trying different brands you can do just as well. I think a lot of people are reluctant to give up branded personal products but once you do there'll be no going back! I love telling people that I only use the Cien brand when they tell me my hair / skin are looking great. Time was I would have spent ten times the amount on skin care etc.

I was struck by your house repairs at €100, car maintenance at €50 and contingency at €200. To me that is total contingency of €350. Perhaps it is really needed for a family of 5.

€1200pa gifts. If you cut out gifts for you and your wife and limited birthday and Christmas gifts for children to €50 each could you bring this down to €300? You might be teaching them a valuable lesson on affordability. 

€1200pa family gifts etc. If you are really in trouble financially perhaps you need to tell extended family that you cannot afford gifts at all for a couple of years. Hard to do but I've done it.

€200 per month on prescriptions. Are you signed up for the drugs repayment scheme as a family? Do you ask for generic drugs to keep your costs down? Do you shop around for your prescriptions? Might it be worth a trip across the border or a Ryanair flight to spain just to stock up? I don't know because it's not an issue for me. Are you claiming all of the medical expenses you can at the end of the tax year?

€50 a month of hair care. I think that's pretty realistic. I could shave a little bit off it myself because I have an excellent hair dresser who comes to my house for €40 a cut. If all the family were done together you could really negotiate a good price with a self employed hair dresser.

Are you Dublin based? Check out the Dublin Event Guide for free events. Every week it lists loads of free things for families to do in Dublin. I can rarely do anything that I have to pay for and I still have a nice life and can really de-stress at the weekends.

I also keep a monthly budget spread sheet. Every cent I spend is put down on it. It really does take the stress out of dealing with unexpected expenses. Fill in the monthly spread sheets three months in advance detailing all known regular expenses. When you get an unexpected expense of €100 instead of dipping into the contingency fund see if you can shave it off weekly expenses over the next few weeks. When you see that you have a little extra left over at the end of a week/month you can really enjoy doing something nice because you've been so careful not to overspend. Having treats mindfully is so much nicer than blind anxious stress spending that you know is putting you in the red.

It is stressful and limiting to have to work on a really tight budget, but I do feel very proud that we have no debt other than our mortgage and can still lead a happy life. I do look forward to having a higher income again in the years ahead. When I read the income guidelines set out for debt forgiveness it really gets me because I'm already living pretty close to them and have never missed a mortgage repayment. I'm not suggesting that you yourself haven't woken up to what living on a budget means, but I think there are loads of people out there who need to get a grip and not abandon their mortgages for me to pick up the tab because they refuse to live within their means.

Best of luck with the budgeting and rebalancing. Hang in there. The future will be easier and hopefully we'll never forget how bloody awful it is to have less!


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## pebbledash (31 May 2013)

PS. I should add that due to the recession we've gone from 2 strong public sector salaries to one significantly cut salary and one of us on just €9k a year. Our income used to be more than double than what it is now. I still work in a voluntary capacity in a professional job trying to get back to full employment. I have to maintain a professional appearance for my job. I've had to swallow my pride and rotate just a few outfits and not buy new things all the time.

In our house we spend money on good shoes, keeping our hair nice and a good foundation makeup/powder - other cheaper makeup products can give the same effect. Women can get trapped into believing that personal products have to be really expensive.  It doesn't cost a fortune to stay looking good. I still have to keep up with my professional colleagues and professional friends who are still doing well. It hurts sometimes to be the poor relation but no one realises we are as broke as we are!


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## frosty (31 May 2013)

Thanks a mil. pebbledash. Some really good points and helpful advice there.

You  take a really good approach to your grocery shop getting as much value  as you can from each store.  We adopt a similar approach across the main  retailers and I've been tracking my spending via spreadsheet too in  recent times.  Costs do mount up when you add in 3 children but I'll  certainly examine things in more detail over the coming months and try  to cut things further.

We have found that being in the house with  a family for nearly 10 years or so has lead to wear and tear,  appliances breaking down, repainting, reflooring etc. thus the €100  there. Note - I would do most of this work myself.  The cars are old but  get a thorough service, new tyres etc. once per year for NCT purposes.   works out at about €300 each = €300x2 = €600/12 = €50 per month on  average.  After that, I do try to put away that €200 contingency  although more often than not it isn't left over.

I take your  point about gifts.  We cut out gifts for ourselves ages ago and we would  spend around €70 on each child for birthdays and Xmas.  They never ask  for anything for the rest of the year but 3 children will receive gifts  from friends so the rest is budgeted for godchildren and return gifts.  A  "no present parties" trend has started with our youngest and this is a  good thing.  There's certainly more we can do here.

Yes, we're on  the drugs repayment scheme. We pay €144 per month max on this for  prescription medication and we submit our Med1 and 2 at the end of the  year.  Will look into generic drugs.  Good advice there.



pebbledash said:


> Best of luck with the budgeting and rebalancing. Hang in there. The  future will be easier and hopefully we'll never forget how bloody awful  it is to have less!



Thanks a million. Best of luck to you too


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## pebbledash (31 May 2013)

I totally get that it must be harder with kids. I know I can ration my fruit, juice, coffee etc. but explaining that to a hungry teenager must be very hard. In reality we all over spend.

My biggest learning and saviour has been the projective budget and writing down every single thing spent and every projective spend.

I still give in to Godchildren gifts. I'm afraid they'll think I don't love them if I don't!


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## Bronte (3 Jun 2013)

frosty said:


> Life assurance which I pay for is deducted at source from my salary so is therefore not included as an expense item. It's arranged (along with an income continuance plan) at a good price via my trade union. We also have minimum life cover on the mortgages of course.
> 
> 
> I appreciate your input though despite the fact that you appear to be quite judgemental at times.
> ...


 
So you have at least 3 types of life insurance. Are you sure you need them? Can savings be made there?

The information you gave about Mabs is good to hear and that you managed it so successfully is even better.

Apologies if I came across as judgemental, I'll go back and look at that. Actually it took me a few years to unlearn being frugal, my family tell me I've chilled out no end. My kids while they do not have expensive clothes or haircuts will have the best of braces, glasses and education (and their hair is beautiful !). My point was about priorities and it was also because on the trip of the 8 Euro haircut, at around 8.30 am I was waiting for a hairdresser to open with said price and noticed Peter Marks was open and packed busy but they quoted me 35 Euro's and it was full of kids, I thought it was for a wedding maybe but no it was 7 year olds for first holy communion. Couldn't get over that.

Unfortunatly I don't see your lender allowing you leeway in order to pay off the personal debt first.  If anything they have all become much more clear in that they are ordering people to pay them and not pay the short term creditors.


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## Bronte (3 Jun 2013)

demoivre said:


> Nope they can't take her off the tracker to put manners on her because she goes in to arrears.
> 
> They can do all the ordering they like, it would be 100% unenforceable. Op enters in to MARP and repossession proceedings can't be instituted for a year. .


 
I can completely see the logic of what you propose.  But I do believe there is built into Marb a get out clause for the bank if you mess around with them.  OP would risk that if he followed your strategy.  

In other words if the borrower abuses MARP then the bank can put you out of MARP and you risk losing the tracker in Froty's case.   People have to be very careful on this.


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