# Skint, need help and advice please



## sparky (22 May 2010)

Hi everyone, I'm new here, and have been reading a few posts on here before finally registering. There is a ton of great information on here. I hope I'll be able to contribute in the future.
But for now, I am looking for your advice... Hope you can help, here's the low down:

Age: 31
Spouse’s/Partner's age: n/a

Annual gross income from employment or profession: 19000


Type of employment: Admin

In general are you:
(a) spending more than you earn, Yes
(b) saving? €5 a week 

Rough estimate of value of home: €215,000
Amount outstanding on your mortgage: €200,000
What interest rate are you paying? 2.3% variable with EBS

Other borrowings – car loans/personal loans etc:
CU: €7500

Do you pay off your full credit card balance each month? No, and I have cut the card up, I have the no for emergencies, but I don't use it at all anymore.
If not, what is the balance on your credit card? 
CC: €6000

Savings and investments:
CU shares and small savings amount to: €1200


Do you have a pension scheme? No

Do you own any investment or other property? No

Ages of children: 0



What specific question do you have or what issues are of concern to you? 

Recently I've been put on a 3 day working week, instead of full time 5 days. So my income has dropped to approx 350 per week after tax. I get 98euros from the dole each week.  But I have too many outgoings and I'm struggling like mad to pay my mortgage, credit card and bills, before I can even buy food.  Forget about clothes shopping or going out for a few pints, that is not happening. I am skint alive and feeling depressed over it.
Each week I have to put aside €250 to cover mortgage and bills. It covers it just about.
Then another €100 goes out each week to the CU loan.
Then each month €180 approx goes into my CC.
You can see I'm just left with hardly anything to try to live on each week.

I applied for and got a full medical card. I'm in the middle of trying to apply for the mortgage supplement, but I understand this can take a few weeks to be granted.  
I'm tempted to contact one of those Debt agencies to see what they can offer me, as I've heard they can freeze interest rates on CC's and loans and knock off up to 70% off of a loan?? 
But I also hear they charge 20% in fees for themselves and I think I'm paying 8% interest on my CU loan and recently I changed to a lower interest CC, so maybe I'm better off the way I am?

I'm thinking of calling into a Mabs near me and seeing what they can say. Or maybe go into my CU for a loan for the balance of the CC to pay it off? But I don't think my CU will give me a loan cos the amount I owe them is pretty high...

If yous can offer any advice I'd be seriously glad of it.


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## niceoneted (22 May 2010)

Few things you could do to cut outgoings - consolodate cc in with cu as you have mentioned  yourself. 
Try to move to a 0% cc with the balance transfer. It's great that you have cut it up by the way. 
Perhaps look to go interest only on the mortgage for 12 months to help with getting the cc cleared and making a dent in the cu loan. 

The other alternative to cutting back on outgoings is to increse incomings. Is there any way you can pick up some other work for the days you are off that will bring in more than the 98 you get on sw?
Could you rent a room for 12 months. 
Could you get a mature student in during the summer who is here to learn english. Lots of English schools look for placements for their students. 
Best of luck and welcome to AAM.


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## UFC (22 May 2010)

Try to remind yourself you won't be on your wage forever - you'll eventually be back on a 5 day week, either with your current employer or elsewhere, so you will some day be debt free.

Are you keeping a spending diary to see where you might be wasting any money?


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## D8Lady (22 May 2010)

Hi Sparky, 

I agree with the suggestions that niceoneted has.

Change the CC card to 0% rate. Any payment you make will pay down the loan.  

For the CU loan, I suggest having a chat with the CU to restructure the loan. They  can increase the repayment time and so reduce your weekly repayment amount. When you get back on your feet, you can reduce the time again. 
They will understand your changed circumstances. You've been making repayments, not in arrears etc. 

Lets know how you get on.


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## mohawk (22 May 2010)

Make sure that your employer knows that you have a medical card because you pay a lower rate of prsi and are exempt from the income levy as well.


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## sparky (25 May 2010)

Thanks everyone!  Yeah my employer knows I've a med card, so I pay less prsi, its great, an extra few bob in the wages helps a lottt.  And thanks UFC thats a good point that I will be back on a 5day week some day... Some day soon I hope! 

I don't think I'm gonna use the debt consolidation co afterall. I don't like the way they want _total _access to my accounts including all access to correspondence etc. I've been dealing with my CC/bank and CU over the phone and in person a lot over the years and I would feel a bit of a failure if I couldn't sort this out with them myself. And I've also heard it can affect your credit rating. 

So I'm in the midst of trying to get a top up loan from my CU. I've shown them my wages have dropped so much and that its a struggle paying the 100 a week. So I'm hoping they will extend the term of my loan, top it up and let me pay less per week... Fingers crossed ... 

I'll let yous know how it goes.


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## niceoneted (25 May 2010)

Sparky, what about trying to get extra money in, renting a room or getting part time hours somewhere else. 
I didn't realise it was a specific consolidation company you were going with and would not have advised that so. 
Good luck with cu, let us know how you get on.


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## sparky (25 May 2010)

niceoneted said:


> Sparky, what about trying to get extra money in, renting a room or getting part time hours somewhere else.
> I didn't realise it was a specific consolidation company you were going with and would not have advised that so.
> Good luck with cu, let us know how you get on.



Yeah I'm defo looking at renting out the spare room. It will be weird as I love my space, but even temporarily it would be a great help. Will the rent affect my mortgage supplement (if I even get it?)?

The consolidation co. was some idea I was kind of looking into. I'm too warey of it though. I'll let you know how the CU plan turns out... Hope they are nice to me. I've always been in touch with them and never missed a single payment ever in the 10 years I've been with them.


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## fizzelina (26 May 2010)

sparky said:


> Annual gross income from employment or profession: 19000
> 
> Rough estimate of value of home: €215,000
> Amount outstanding on your mortgage: €200,000
> ...


 
This is just a suggestion sparky and I know there are cons to it but if the value of your home is higher than your mortgage and you think you would get a buyer at 215k for the home (not sure how you came up with rough estimate) then you could sell, pay off the mortgage and pay your CU and CC off (with some cash left for selling costs). You would then be debt free, able to rent and lucky not to be in negative equity. I know it's your home and only you can decide if owning it is worth all the stress of repayments or if it would be good to clear all the loans and be debt free.


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## sparky (26 May 2010)

fizzelina said:


> This is just a suggestion sparky and I know there are cons to it but if the value of your home is higher than your mortgage and you think you would get a buyer at 215k for the home (not sure how you came up with rough estimate) then you could sell, pay off the mortgage and pay your CU and CC off (with some cash left for selling costs). You would then be debt free, able to rent and lucky not to be in negative equity. I know it's your home and only you can decide if owning it is worth all the stress of repayments or if it would be good to clear all the loans and be debt free.



Thanks for the suggestion, its somethin I had thought about, (got rough estimate from looking at neighbours houses on daft and in papers) but I don't think I'd be up for the hassel of selling it. Plus I've put so much money into making the house my own, decorating, furnishing, etc. (hence the big CU loan...) So I'm just not ready to part with it. Yet!


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## doubledeb (26 May 2010)

Hiya sparky
We have a cu loan of 26k and we are only paying back 75p.w.
We spoke to the cu and got it moved (with a lot of persuasion!)from 5 years to ten years.  I know we will be paying back a huge amount in interest initially but hopefully when things improve we will go back to paying 150 p.w again, and we can reduce the term.  100 p.w seems like an awful lot for a relatively small loan.
Or you could ask to pay interest only on your loan until you go back working full time.  Same thing could be done on your mortgage maybe.
I'm with niceoneted about the 0% CC balance transfer.  I did it myself back in Feb now everything I pay them goes straight off the balance and nothing on interest.
Hope you work it out


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## Emmet 007 (27 May 2010)

Sell your car and use public transport.

Pay off some loans with that money.

Buy a cheap car in a year or so.

The key is to reduce your loans and the interest payments on them. 

Talk to your bank about your mortgage. Maybe you can get the length of it extended, maybe you could move to interest only payment, something like that.


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## setesh (28 May 2010)

sparky said:


> Thanks for the suggestion, its somethin I had thought about, (got rough estimate from looking at neighbours houses on daft and in papers) but I don't think I'd be up for the hassel of selling it. Plus I've put so much money into making the house my own, decorating, furnishing, etc. (hence the big CU loan...) So I'm just not ready to part with it. Yet!



Sparky, 
You've a mortgage worth over ten times your earnings?
I would sell that house as quick as you can for what you can, take the hit and then rent.
You will be absolutely crucifed when interest rates rise.
Get the hell out as quick as you can.
Stay at your own peril.


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## fobs (28 May 2010)

setesh said:


> Sparky,
> You've a mortgage worth over ten times your earnings?
> I would sell that house as quick as you can for what you can, take the hit and then rent.
> You will be absolutely crucifed when interest rates rise.
> ...


 
I agree! Wht makes you think you will be earning enough to ever pay it back? If you are earning €19000 on 3 day week you musy have still only been earning around €32000 on the 5 day week. Still a modest income for this level of debt. I would sell in your situation unless you have the option of trebling your current salary at the least!


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## Blondbiddy (29 May 2010)

I agree too.  For  God's sake don't go near one of those debt agencies.  I'd sell the house (if you can). It's only brick and mortar.  You can still make that lovely home in a rented place.  Check out all the charity shops - the clothes are great, lovely,  and cheap and you can get real bargains.  Do your shopping in the late evenings when things are reduced.


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## number7 (30 May 2010)

I would go with a moratorium of 4 months and at the same time reduce your repayments to the cu to 100 a month. use the money to clear your cc then switch your mortgage to intrest only and use all your money to clear the cu


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## fobs (30 May 2010)

number7 said:


> I would go with a moratorium of 4 months and at the same time reduce your repayments to the cu to 100 a month. use the money to clear your cc then switch your mortgage to intrest only and use all your money to clear the cu



That might sort him out for the short term but unless his situation is going to change dramatically he will never be able to service this debt especially if/when rates go up. I would sell now and hopefully he could start again in a few years when his circumstances improve


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## sparky (2 Jun 2010)

Emmet 007 said:


> Sell your car and use public transport.
> 
> Pay off some loans with that money.
> 
> ...



I couldn't I live in the middle of the shticks, very little public transport 

The car I have is pretty old anyways and I'd get sfa for it. Thanks for the suggestion though.

I contacted my lender and they offered to extend the term, but I think i'll keep going the way I am at the minute if I can manage so far..


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## sparky (2 Jun 2010)

doubledeb said:


> Hiya sparky
> We have a cu loan of 26k and we are only paying back 75p.w.
> We spoke to the cu and got it moved (with a lot of persuasion!)from 5 years to ten years.  I know we will be paying back a huge amount in interest initially but hopefully when things improve we will go back to paying 150 p.w again, and we can reduce the term.  100 p.w seems like an awful lot for a relatively small loan.
> Or you could ask to pay interest only on your loan until you go back working full time.  Same thing could be done on your mortgage maybe.
> ...



Yup I'm after bein in touch with my CU and they requested bank statements etc off me, so I'm waiting to hear back on what they decide... fingers crossed.


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## sparky (2 Jun 2010)

setesh said:


> Sparky,
> You've a mortgage worth over ten times your earnings?
> I would sell that house as quick as you can for what you can, take the hit and then rent.
> You will be absolutely crucifed when interest rates rise.
> ...





fobs said:


> I agree! Wht makes you think you will be earning enough to ever pay it back? If you are earning €19000 on 3 day week you musy have still only been earning around €32000 on the 5 day week. Still a modest income for this level of debt. I would sell in your situation unless you have the option of trebling your current salary at the least!





Blondbiddy said:


> I agree too.  For  God's sake don't go near one of those debt agencies.  I'd sell the house (if you can). It's only brick and mortar.  You can still make that lovely home in a rented place.  Check out all the charity shops - the clothes are great, lovely,  and cheap and you can get real bargains.  Do your shopping in the late evenings when things are reduced.



Yikes.. seriously? I can't get rid of my home... ah it would kill me to have to sell it.   I am looking to rent out the spare room atm, so fingers crossed. 
I appreciate the suggestions though. 

Are interest rates really set to go up again?  As high as they were recently? Like 4 and 5%??


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## sparky (2 Jun 2010)

number7 said:


> I would go with a moratorium of 4 months and at the same time reduce your repayments to the cu to 100 a month. use the money to clear your cc then switch your mortgage to intrest only and use all your money to clear the cu



What is a moratorium? Sorry if a dumb question, but I've not heard of it before..


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## fobs (2 Jun 2010)

a moratorium is where the bank give you a break from payments for a set no of months to get your affairs in order. You would not be considered to be in arrears doing this but usually only get one stab at it!


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## setesh (2 Jun 2010)

sparky said:


> Yikes.. seriously? I can't get rid of my home... ah it would kill me to have to sell it.   I am looking to rent out the spare room atm, so fingers crossed.
> I appreciate the suggestions though.
> 
> Are interest rates really set to go up again?  As high as they were recently? Like 4 and 5%??



Sparky,

You are 31 with no savings or pension. 
You are on here looking for advice to just manage to keep a few extra quid after you're normal outgoings.
You've been dropped from a 5 day week to a 3 day week. How solid is that job? 
Say you get someone in the spare room, that might cover an interest hike.
But what will you do when the next hit comes? Job loss, interest hike, energy/fuel increase etc.
You're treading water as is and you're busy pumping money into an asset that will in all likelihood devalue in the future.

Ignore your emotional attachment to your home. Stand back and look logically at your situation and you will see there is only one happy ending here.
PS: If your home is worth €15k over your outstanding mortgage, for gods sake run now before you hit negative equity and really are stuck.


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## csirl (3 Jun 2010)

> I couldn't I live in the middle of the shticks, very little public transport
> 
> The car I have is pretty old anyways and I'd get sfa for it. Thanks for the suggestion though.


 

Other posters have suggested selling the house for financial reasons. If you sold the house and moved to rented accommodation either within walking distance of your job or along a public transport route, then you'd have the added bonus of not having to run a car.


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## number7 (3 Jun 2010)

my guess on interest rates is that over the next 20 years the variable rate is likely to average 5-6%. Just a guess mind


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