# Help: seriously ugly Credit Card bill!



## SMcD (4 Jul 2006)

Hi,

Same old story as a million others, I'm afraid!

For a couple of reasons my spending the last 2/3 months has had to be way above the norm, thankfully that spell is over and I'm back to normal - ie living as frugally as possible!

But I ended up with a seriously ugly Credit Card bill so had to take out a loan to partly sort it out.

The (rough) figures:

I'm a year in to a mortgage with the Ulster Bank (E259,000), paying E1,200 a month

I have two BOI loans - the first amounts to E377 a month (with three years left), the second is E366 (with two years to go). 

So the above amounts to just under E2000 a month.

I earn at least E3000 a month after tax (it varies, but it's often E3500ish), so I can cope with the above. The rest of my monthly expenses are okay, I don’t have a car, my mobile phone bill is paid by work, I’ve cut out the socialising (for now!) and food/gas/ESB etc aren’t too bad. I’m not saying I’m left with anything at the end of the month, just that I can cover what I owe on the above!

But! I owe E12,000 on my credit card, E8,500 of it due in a fortnight. Not pretty! 

For the first damn time ever I was late clearing the last credit card bill (just under E6,000) but, with the help of the loan, managed it a fortnight late. But there is no way I’ll be able to clear that E8,500 on time, at best I’ll manage E2,000 of it.

I’m really clueless when it comes to dealing with this kind of thing, before buying my house I was never in debt, so it’s a whole new miserable experience! 

Can anyone give me some advice on how best to deal with this? I think/hope my earnings are enough to ensure that I can have it all sorted in a few months, if I’m sensible (!?), but the looming CC bill has me terrified.

What should I do?

Any advice would be received with hugs and kisses!

Thanks,

S


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## BH Hell (4 Jul 2006)

What if you merged you BOI loans and your CC bill and took out a new loan I'm sure the payments wouldn't be very different to what you are paying now.  Maybe with the credit union?  They are always very good on rates.  Or You could make repayment by direct debits and that way you wouldn't be late on repayments.
HTH


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## CCOVICH (4 Jul 2006)

SMcD said:
			
		

> But! I owe E12,000 on my credit card, E8,500 of it due in a fortnight. Not pretty!


 
Is it possible to do a balance transfer to a card that will give you 0% for an introductory period, thus giving you a bit of breathing space?

There is a thread on the best value balance transfers in the Best Buys forum-Ulster Bank offer the longest interest free period.

Needless to say, you should avoid making any further significant purchases on your credit card in the meantime.

There are many existing threads on the issue of managing debt that maybe of some benefit to you in dealing with your other debts, like this one and this one.

Best of luck.


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## lff12 (4 Jul 2006)

You need to call the CC company and discuss this with them immediately.


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## Guest107 (4 Jul 2006)

People with €1000 disposable incomes after loans should not clock up €8500 on their credit cards in one month.


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## purplealien (4 Jul 2006)

lff12 said:
			
		

> You need to call the CC company and discuss this with them immediately.


And then you should call MABS


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## CCOVICH (4 Jul 2006)

lff12 said:
			
		

> You need to call the CC company and discuss this with them immediately.


 
Discuss what exactly?  It is likely to work out better if you get a 0% holiday from another provider, during which time you can make lower regular payments without worrying about interest charges.

I doubt an existing provider will match the terms that are available by doing a balance transfer.

If the balance transfer is not available as an option due to credit record etc, then obviously that changes things.....


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## jammacjam (4 Jul 2006)

I know this is obvious but you should cut them up now today, 8 grand in a month is crazy.


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## Alex (4 Jul 2006)

it is crazy. go with the advice above and cut them up.


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## amck (4 Jul 2006)

Hi

I was in a similar position and transferred the balance to another card which offered 0% interest for the 1st 6 months.  We have since re-mortgaged (more to do with being very unhappy with current mortgage provider) but with the equity released we have cleared our outstanding bill and finished some projects in the house that needed doing.  Now on a better rate for mortgage, debt free and projects completed.  Worth looking into.


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## JohnBoy (4 Jul 2006)

hi amck - i take it that you are debt free apart from the mortgage. Re-mortgaging to pay short-term debt is financial madness. You will end up repaying credit card debt over 25/30 years!


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## irishpancake (4 Jul 2006)

amck said:
			
		

> Hi
> 
> I was in a similar position and transferred the balance to another card which offered 0% interest for the 1st 6 months.  We have since re-mortgaged (more to do with being very unhappy with current mortgage provider) but with the equity released we have cleared our outstanding bill and finished some projects in the house that needed doing.  Now on a better rate for mortgage, debt free and projects completed.  Worth looking into.



but the OP is only 1 year into mortgage:



> I'm a year in to a mortgage with the Ulster Bank (E259,000), paying E1,200 a month


.

Also, didn't OP already get a loan to sort out CC 



> But I ended up with a seriously ugly Credit Card bill so had to take out a loan to partly sort it out.


.

Sorry to sound judgemental, but you seriously need to evaluate just what are your priorities, given that 50-66% of your monthly income goes to servicing debt, without considering the €12K you owe on the CC. 

Even if you get a Balance transfer at 0% for 9 months, which is doubtful given the circumstances, you must pay this also. This would amount to €1300 p/month, leaving you zilch to live on.

Contrast this to your life before the Mortgage.

Definitely call MABS, but you may have to consider some pretty fundemental changes to your circumstances.


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## purplealien (4 Jul 2006)

Would you be in a pposistion to rent out one of your rooms to the spanish/french students for a month. You get 600 euro a month per student.If you brought in two for the month you'd have an extra 1,200 for the month on top of your wages. Just an idea!


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## jammacjam (4 Jul 2006)

Do you mind me asking what you spent 8 grand on; did you buy a car with it? It’s none of my business but this is beyond normal spending problems I don’t mean to be offensive but this is out of control you need a scissors this minute and cut them up, you don’t need more loans for the moment you need to get rid of the credit card immediately and talk to mabs. In your original post you said you are back to living frugally yet you already have two loans.


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## whackin (4 Jul 2006)

I agree with most people here, building up a CC debt that quickly on limited and alreadt debt-raveaged income is absolutely crazy. You need to really change the way you live.


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## SMcD (4 Jul 2006)

Thanks to everyone who's taken the trouble to reply, I appreciate it. It didn't make for comfortable reading but I'm hardly in a comfortable position! I actually appreciate the 'you big eejit' replies, I need to hear them so I never get myself in a situation like this again, I know how drastic it is. The worst part is that I was always healthily paranoid about my credit card before, I used it as little as possible, but it all got so seriously out of hand because I panicked in an emergency and used the card to bail me out. Most of the money was a loan to a family member which I'm unlikely ever to get back, I know I was insanely stupid and should have handled the situation differently, but I wasn't thinking too clearly at the time. I will contact my Credit Card people and see what they say, meantime I have a 50-50 chance of getting some temporary financial help from another family member which would, at least, ease things in the short-term. Thanks again to everyone.


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## irishpancake (4 Jul 2006)

Also, going by your previous post here, you could be in for an additional shock by way of increased mortgage repayments. 

As you were on a 1-year fixed rate from June 2005, this is due to expire.

Rates on offer to you now will be substantially higher than what you have been paying for the past year, so be prepared.

You really should contact MABS, as this could easily spiral out of all control.


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## bb12 (4 Jul 2006)

First of all I wouldn't go mad panicking at it all. I think a lot of people here are panic mongers when it comes to credit card debt.  Anyhow, I've been in the same situation as yourself with lots of personal loans and a credit card debt much higher than yours is at present!  What's the interest rate on your credit card? The first thing I'd do is ring your credit card company and ask them to reduce the interest rate..plead the poor mouth etc...I've always had no problem in getting it down. In the meantime, apply for a new credit card with a 0% Apr and transfer as much as the debt to this when you get it and so on every 6 months...I find MBNA the best credit card company to deal with personally. 

The actually amount of interest applied to your balance won't be overly huge per month(depending on your interest rate) so don't panic about it.  I had a big cc balance for years and gradually transferred it to personal loans over the time. Have no cc balance anymore so it's possible to dig yourself out of it.  Just don't go mad and spend more in future!


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## SMcD (4 Jul 2006)

bb12 said:
			
		

> First of all I wouldn't go mad panicking at it all. I think a lot of people here are panic mongers when it comes to credit card debt. Anyhow, I've been in the same situation as yourself with lots of personal loans and a credit card debt much higher than yours is at present! What's the interest rate on your credit card? The first thing I'd do is ring your credit card company and ask them to reduce the interest rate..plead the poor mouth etc...I've always had no problem in getting it down. In the meantime, apply for a new credit card with a 0% Apr and transfer as much as the debt to this when you get it and so on every 6 months...I find MBNA the best credit card company to deal with personally.
> 
> The actually amount of interest applied to your balance won't be overly huge per month(depending on your interest rate) so don't panic about it. I had a big cc balance for years and gradually transferred it to personal loans over the time. Have no cc balance anymore so it's possible to dig yourself out of it. Just don't go mad and spend more in future!


 

Thank you SOOOOOOOOOO much for the encouragement, I was desperately in need of it! I'm sure everyone above is spot on with their 'TIME TO PANIC' messages but at a time like this you need constructive advice, not necessarily to be told you're an idiot - I know that already! Will follow your advice and see what I can do with the CC company, thank you SO much again.


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## narc (4 Jul 2006)

SMcD

One thing I didnt realise until recently was that I had originally set up to have an automtic repayment by direct debit of 10% of my balance.  I rang them and changed it to 2.5%.  This gave me a few months breathing space to repay the balance when money was tight.  You still have to be frugal.  But it helps with the pressure.


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## irishpancake (4 Jul 2006)

SMcD said:
			
		

> Thank you SOOOOOOOOOO much for the encouragement, I was desperately in need of it! I'm sure everyone above is spot on with their 'TIME TO PANIC' messages but at a time like this you need constructive advice, not necessarily to be told you're an idiot - I know that already! Will follow your advice and see what I can do with the CC company, thank you SO much again.



Sorry SMcD, i really don't want to stress you any more than you are already, but do you seriously think that the advice given by bb12 is more "constructive" than that offered by other more sensible contributors?

S/He told you what you wanted to hear, but it's not necessarily the best thing to do given your financial circumstances.

I'm not saying it's time to panic, but it is time to take control, rather than let this spiral of debt do you serious harm, but financially and otherwise. 

The figures you are talking about are serious amounts, and the only advice given is to plead with your CC company, and apply for another CC, with 0% interest for a period of time. This debt will still have to be paid, and the other loans will have to be paid. 

Debt transferrance is OK, if you have the resources to deal with it, but going on your figures, you seriously underestimated your ability to service these debts. Your debt servicing is going to cost in excess of 66% of your take-home pay. That's not sustainable on your income.

Please talk to MABS.


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## Eben (4 Jul 2006)

Hi S
I would take heed of *all* of the above.
First, find out what your minimum payment is. If you can deal with it, good and well. If not, ask them to lower it. (many are automatically set very low, 3% or so, which is a pretty sneaky way of making debt seem affordable - but I digress)

Also, ask cc company to reduce interest.
Throw as much money as you can at the credit card every month.
If you can get a 0% deal on a new card (I doubt they will transfer €12,500, but they may give you a balance transfer of a few thousand) that will give you breathing space, but remember you still have make minimum payments religiously throughout the interest free period and you will need to clear the balance at some stage! 

People always say cut up the card, or use it only in emergencies. I used to think this was a bad idea as I was living one month 'in arrears'. In the end I found it better to pay the minimum for a couple of months, and  stop using the card when I could survive the month on my salary.

Don't worry, you can get out of this.


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## Guest107 (4 Jul 2006)

I cannot ENCOURAGE someone who clocked up €8.5k in one month on a CC when their effective living costs after their other loans is €1k a month. 

Lots of 0% transfer holidays are maxed at €5000 only, like the Ulster Bank. Some will let you transfer large amounts maybe but not all. 


Where is that bloody CC now at this very minute !!!!


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## SMcD (4 Jul 2006)

irishpancake said:
			
		

> Sorry SMcD, i really don't want to stress you any more than you are already, but do you seriously think that the advice given by bb12 is more "constructive" than that offered by other more sensible contributors?
> 
> S/He told you what you wanted to hear, but it's not necessarily the best thing to do given your financial circumstances.
> 
> ...


 
No problem, I couldn't be any more stressed out! You're partly right, the previous message was what I wanted to hear, that's why I was so grateful, but mainly it was just a relief to hear from someone who had been in a similar situation to mine and who's on the road to sorting it out.

At times like this you feel like you're the only one on the planet dumb enough to have got in to this kind of mess! 

As I said before I know everyone who has replied has just been honest, there's no point any one saying to me 'don't worry about it, it'll sort itself out'. It won't! I just don't see the point in people telling me I've been dumb, no one knows that better than myself. I loathe myself for getting in to this mess having been okay-ish financially before. 

I'll sit myself down tonight and go through the advice you and others have kindly given me and then decide on a course of action - which will begin tomorrow. The CCs, needless to say, are in the bin. I will definitely speak with MABs, I need all the good advice I can get. 

Thank you again, I really do appreciate you taking the time to advise me - why didn't I talk to you two months ago!!


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## SMcD (4 Jul 2006)

2Pack said:
			
		

> I cannot ENCOURAGE someone who clocked up €8.5k in one month on a CC when their effective living costs after their other loans is €1k a month.
> 
> Lots of 0% transfer holidays are maxed at €5000 only, like the Ulster Bank. Some will let you transfer large amounts maybe but not all.
> 
> ...


 
We're defining 'encourage' very differently! I don't mean I want encouragment to carry on spending and to ignore my problems, just constructive advice on how to deal with the problem!! As I said in my previous reply no one knows better than me (a) what an irresponsible idiot I've been or (b) how drastic this situation is. So there's no point telling me that, I KNOW! 

PS The CC is in the bin!!


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## SMcD (4 Jul 2006)

Eben said:
			
		

> Hi S
> I would take heed of *all* of the above.
> First, find out what your minimum payment is. If you can deal with it, good and well. If not, ask them to lower it. (many are automatically set very low, 3% or so, which is a pretty sneaky way of making debt seem affordable - but I digress)
> 
> ...


 
Brilliant Eben, thank you! I am violently determined to get out of this mess, whatever it takes (I don't mean robbing a bank, just not spending any unnecessary money for 6 months!).


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## irishpancake (4 Jul 2006)

OK SMcD

I am so glad to hear that you are going to take the necessary steps towards resolving your situation, i really am  

Also, no-one thinks you are dumb, or any of the other things you have said. We all get into these situations.

Personally, I have been in a situation of having to take the hard step of selling up, moving into rented accomodation and resolving my debt problems. 

That was back in the 90's. 

They are behind me now, but not before i took the necessary steps.

Lot's of luck in the future.


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## SMcD (4 Jul 2006)

irishpancake said:
			
		

> OK SMcD
> 
> I am so glad to hear that you are going to take the necessary steps towards resolving your situation, i really am
> 
> ...


 
Thanks a million Pancake. I've thought about selling the house, that's how big a mess this is, but it will definitely be a last resort, it took me long enough to get around to buying one in the first place. But I know it may come to that if I can't find another way of clearing this debt, we'll see what happens. To think....I used to wonder: _how_ do people get themselves in to so much debt??


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## SpatenMan (5 Jul 2006)

What about some extra work at the weekends? Is this possible? Its not just about cutting spending; increasing income is an added way to attack this problem!
As someone said maybe get in a lodger. Sell stuff on E bay! etc etc.


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## lff12 (7 Jul 2006)

CCOVICH said:
			
		

> Discuss what exactly? It is likely to work out better if you get a 0% holiday from another provider, during which time you can make lower regular payments without worrying about interest charges.
> 
> I doubt an existing provider will match the terms that are available by doing a balance transfer.
> 
> If the balance transfer is not available as an option due to credit record etc, then obviously that changes things.....


 
They are hardly going to give you 8.5k upfront, unless you earn about 150k a yr.

The reason I said to discuss with bank is that they may be able to reduce the minimum payment as you agree this when applying for the credit card .  Normally the minimum payment is about 10% but if you agree to pay more it might mean you could see bills coming in for very large payments if you have a big credit limit and have spent a lot.  Which is what I suspect has happened to our friend here.

If the minimum payment is 5% on 8.5 it means our friend should only need to find 425 upfront, and not 8.5k.  If he's spent all 12k then it would be 600.  Nasty still, but not as nasty as 8.5k.


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## CCOVICH (7 Jul 2006)

lff12 said:
			
		

> They are hardly going to give you 8.5k upfront, unless you earn about 150k a yr.


 
Is this based on any particular experience/formula, or just an estimate?

I'm not sure I understand your point about the minimum payment-making this only keeps your card 'clean' in terms of missed payments-interest still accrues on the full amount outstanding-could you explain how reducing the minimum payment would really help the OP-they have said they are in a position to make a €2,000 payment?

If they cannot avail of a balance transfer, then they should certainly attempt to negotiate a lower interest rate with their current provider.

Other than generating extra income, all possible sacrafices should be made to save money to go towards paying down CC debt.

Re-mortgaging probably isn't an option at this stage anyway, but it might be worth speaking to your lender about a payment holiday or interest only option-both of these will increase the amount of interest you pay long term, but there are more pressing short-term issues to be addressed IMHO.


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## HotdogsFolks (7 Jul 2006)

I thought I'd jump in here with a more positive angle...

For many years I lived beyond my means. Lots of alcohol, women, restaurants, etc. Basically, I was clueless when it came to money.

My debts before I copped on...
CC #1: 5000
CC #2: 5000
Loan: 6900
Family Loan: 3000
Total: About 20k

The debts slowly rose over a period of about 8 years. I don't regret the 8 years: I've really lived my life. But I know it's now time to sort it out.

I'm in my 20's.

This is what I'm doing. I'm in my sixth month -

I take home about 2500 after tax a month. I pay off 1850 off my debts each month. The other 750 I use for rent, bills, food etc.

I am currently in the process of getting an "easy" part-time job. It'll add another 200 a week.

I've stopped going to restaurants, bring a lunch into work, and I've seriously seriously cut down on the booze. As a result, I'm fitter, healthier, slimmer, more focussed in work... and my debts are quickly dissappearing.

Already the two CC's are paid off. I'll be debt free by the end of the year.

The stress is already floating away...

SMcD: you can do it. Curb your spending, work out a budget, stick to it, and you'll have your problem sorted. Just be patient.

I strongly recommend kicking out the booze. It'll change everything!

Good luck!


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## dobsdave (8 Jul 2006)

SMcD said:
			
		

> Hi,
> 
> But! I owe E12,000 on my credit card, E8,500 of it due in a fortnight. Not pretty!
> 
> ...


Maybe i'm taking this up wrong, but why do you have to pay 8500 in two weeks? Surely you just have to pay the minimum (150-200 euro approx)?


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## CCOVICH (8 Jul 2006)

dobsdave said:
			
		

> Maybe i'm taking this up wrong, but why do you have to pay 8500 in two weeks? Surely you just have to pay the minimum (150-200 euro approx)?



Maybe the €8,500 is required to clear the latest bill (as opposed to the total amount currently racked up on the card-unbilled amounts).


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## dobsdave (8 Jul 2006)

CCOVICH said:
			
		

> Maybe the €8,500 is required to clear the latest bill (as opposed to the total amount currently racked up on the card-unbilled amounts).


Now I am confused.
Anyway hope you got it sorted op.


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## CCOVICH (13 Jul 2006)

dobsdave said:
			
		

> Now I am confused.
> Anyway hope you got it sorted op.



E.g. undertake €8,500 worth of transactions in May.

Bill for May arrives June 16.  Payment due July 3.

In the meantime, you have made €4k of purchases.

On July 3, you owe €8,500 to clear the bill for May.  

The total amount outstanding is €12,500-€8,500 billed, €4,000 authorised but not yet billed.


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## dobsdave (13 Jul 2006)

CCOVICH said:
			
		

> E.g. undertake €8,500 worth of transactions in May.
> 
> Bill for May arrives June 16. Payment due July 3.
> 
> ...


 
Ok, but as long as you haven't gone over your limit then I dont see why you would 'have' to pay the 4k.
The original poster said he only had 2k to pay back.
In an ideal world you would like to clear your full balance (tell me about it!) but if you can't no need to worry overly.
Just pay back the minimum plus whatever you can afford, and tear up the card.


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## CCOVICH (14 Jul 2006)

dobsdave said:
			
		

> Ok, but as long as you haven't gone over your limit then I dont see why you would 'have' to pay the 4k.
> The original poster said he only had 2k to pay back.


 


			
				SMcD said:
			
		

> But! I owe E12,000 on my credit card, E8,500 of it due in a fortnight. Not pretty!
> 
> For the first damn time ever I was late clearing the last credit card bill (just under E6,000) but, with the help of the loan, managed it a fortnight late. But there is no way I’ll be able to clear that E8,500 on time, at best I’ll manage E2,000 of it.


 

Seems clear to me-they owe €12,000 in total, €8,500 on the current bill-I don't think I anybody said they had to pay €4,000 now as well, but there is a wider problem of the total amount outstanding, i.e. €12k is a hefty balance that needs to be tackled sooner or later.


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## dobsdave (15 Jul 2006)

CCOVICH said:
			
		

> Seems clear to me-they owe €12,000 in total, €8,500 on the current bill-I don't think I anybody said they had to pay €4,000 now as well, but there is a wider problem of the total amount outstanding, i.e. €12k is a hefty balance that needs to be tackled sooner or later.


 
My fault, I took the original post up wrong.I was under the impression that the poster was scared of not being able to pay off 4k in the two weeks.


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## Noor77 (21 Jul 2006)

Why have you absolutely no chance of getting the money back off the relative you lent it to? Did you know there would be a chance that this might happen at the time you lent it to them?

Lending money to relatives is always such a dodgy area. My Chinese friend lent her cousin €10,000 to help pay for his tuition fees in an American university. It was for his last year of medicine and he told her he would pay her back the money in 18 months - when she would need it herself for a college course. That was five years ago. Her cousin is now earning a very respectable salary but he hasn't so much as paid her one cent back.


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