# Looking for advice on Financial Mess please



## Rois (26 Nov 2008)

I have just started facing up to the financial mess I am in.  I haven't gone to MABS yet but am considering it. Would appreciate advice on which debts I should tackle first.  Here is a broad outline of my current situation. All advice appreciated.

*Age:* 
44

*Spouse’s/Partner's age:* 
None

*Annual gross income from employment or profession:* 
6,000
600 pcm from 2 lodgers rent-a-room scheme

*Type of employment: e.g. Civil Servant, self-employed* 
Retail Part-time employed 10 hours per week
Other self-employed 10 hours per week @ €10 per hour
New Internet business (partnership) no profit as yet

*In general are you spending more than you earn or are you saving?* 
Spending way more than I earn

*Rough estimate of value of home*
380k

*Amount outstanding on your mortgage:* 
No mortgage

*Other borrowings – car loans/personal loans etc*
Credit Union loan €14k
3 UK Credit Cards £12k STG
Irish Credit Card €4k
4,000 owed to family, accountant etc.

*Do you pay off your full credit card balance each month?* 
No, can only afford mininum payment but even miss this some months and have to suffer the charges.

*If not, what is the balance on your credit card? *
12k Sterling
4k euros

*Savings and investments:*
SSIA 5,000 (losing money)
UK ISA 20k sterling (losing money also)

*Do you have a pension scheme? *
2 small pensions from UK employment

*Do you own any investment or other property?* 
No

*Ages of children:* 
None
3 dogs cost approx 140 euros per month for food, 
insurance, vet bills

*Life insurance:* 
None
UK endowment policy, I pay 34 STG into each month.  Matures in 2012.



*What specific question do you have or what issues are of concern to you? *
My main concern is to start clearing my debts, especially the credit cards and money owed to family and accountant. I am transferring some money to UK cards now that euro/sterling rate is better.


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## BoscoTalking (26 Nov 2008)

Hey the great news is no mortgage! 
I would say cash in the SSIA and ISA and pay off the credit card and visit MABS to create a payment plan to pay back the rest that your owe- live within your means thereafter. 
Perhaps a small mortgage against your house could be the way to  free up €€ while you have the lodgers paying it back for you.


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## Flax (26 Nov 2008)

As stated, you have no mortgage which is superb.

Use your savings to pay off a large chunk of the debt and try to get a job which will bring in more income/increase your hours in your current job.

I run a couple of websites myself so I can tell you it may be a long time (years) before your website starts making a profit.


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## Rois (26 Nov 2008)

Thanks for replies and I agree not having a mortgage is a lifeline.  I am reluctant to cash in the SSIA/ISA as maybe they will increase in value when the stock market improves (they're both in equity funds not deposits). But, if you think it's best, then I will do that.  

I am interested in the suggestion that I could get a small mortgage against my house - how would I go about this and over what period of time?  I will have about 35k STG when my endowment policy matures in 2012. 

I have asked work for extra hours over Christmas & New Year sales, but nothing definite yet as business is slow. Having problems getting a second job - started one last Friday and lost it on Monday! 

The web business not likely to bring in rewards for a good while yet.  We have financed the set-up and marketing ourselves so it's costing us money at the moment.  

The lodgers are a god send, I only advertised the rooms in September on daft.ie and got loads of replies, plus they pay me in cash. However, this really just covers bills eg car, ESB, Gas, insurance, sky, etc etc.


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## Flax (26 Nov 2008)

If I were you I'd immedately use my savings to clear most of the debt, and I would definitely not get more debt (especially long term debt!) by getting a mortgage.

As someone who has been reading this forum for years, people who take on more debt rather than remove their existing debt normally end up getting in a bigger mess...

Good luck.


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## theresa1 (26 Nov 2008)

Get rid of the dogs - seriously.


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## PaddyBloggit (26 Nov 2008)

I love my dogs ..... they eat better than I do at times!

Don't underestimate the use of dogs .... great company, great excuse for a walk etc.

Suggesting the OP sells his dogs is like asking him to sells his children ..... 

Looking at what some children cost to bring up ... the €140 he spends on his dogs is cheap in comparison!

One thing I would ask the OP to check out is the possibility of sourcing cheaper dog food .... I get all mine in Lidl ..... dog nuts, treats, sausage type chubs ... the lot ... and it's quite reasonable. €50 keeps my two large dogs fed for 2/3 weeks.


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## Purple (26 Nov 2008)

I’d cash in your UK ISA. This will enable you to clear both credit card debts, pay back your family and take a lump off the Credit Union loan. 
What’s the current value of the endowment policy?
You have very low expenses as you have no children and no mortgage so any extra income will make a big difference. Therefore I’d look for any part time work, even at minimum wage, you are only working 20 hours a week so it’s not as if you couldn’t find another 10-20 hours.


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## Rois (27 Nov 2008)

Get rid of the dogs - no way, that is absolutely non-negotiable. I am also kind of reluctant to put them on cheap dog food (full of additives and meal) as I plan to breed from 2 of them in the future. 
I am looking for extra work all the time, but hard to come by here.
So is cashing in my UK ISA the best option, rather than getting a mortgage - am inclined to agree. Not sure of the current value of my UK endowment, will check it out, but on maturity (in 4 years) it's about 35k sterling so I would rather keep that going than cash it in now. 
Thanks for replies and giving me options to consider.


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## Flax (27 Nov 2008)

You're spending nearly a third of your earnings on your dogs though... as a result you've gotten yourself in debt!

I agree you should keep your dogs, but you need to start looking after yourself too. 

Don't get a mortgage... seriously, don't do it!


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## infinity (28 Nov 2008)

Flax said:


> Don't get a mortgage... seriously, don't do it!


 
well - he has credit card/credit union loans totaling €36,000. 
I'd rather have a 36k mortgage @ 4.5% over 10 years rather than 36k @ 15% over many more years !!

OP - how are you managing the payments on your credit cards/credit union at the moment ? The interest alone on those must be around €400 a month ?


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## Rois (28 Nov 2008)

I have DDs set up to pay minimum on each of the credit cards, though often no funds, so I end up with late fees etc.  I have stopped using the cards now, but the interest payable is: 

Irish Credit Card:  €51 per month
3 UK Cards: £250 STG per month

That's just the interest part.

Payment on my CU loan is €310 per month.

Other posters are advising strongly against getting a mortgage.


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## Celtwytch (28 Nov 2008)

Have a word with your Credit Union. You may be able to extend your existing loan enough to clear the credit cards. You could then use what you're paying off the credit cards to repay the loan. Or you may be able to negotiate making a lower payment on your CU loan for the time being. It's worth asking, at least.

Failing that, try switching your credit cards to ones (or even a single one) that offer an interest-free period.  If you take a look at www.itsyourmoney.ie, they have a section that shows all the current credit card rates and offers.  Not paying interest for a few months might give you a little more breathing room.


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## MrMan (28 Nov 2008)

Might he have difficulty getting any type of mortgage with little income coming in and some missed repayments on his cc.


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## Rigoletto (28 Nov 2008)

PaddyBloggit said:


> Suggesting the OP sells his dogs is like asking him to sells his children .....


 
I find it repulsive and offensive to even compare children with dogs. I hope you meant this tongue in cheek but to be honest its gross. 

i think the op should sell the dogs and get out of debt.


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## Rigoletto (28 Nov 2008)

theresa1 said:


> Get rid of the dogs - seriously.


 
agreed


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## Rois (28 Nov 2008)

Selling my dogs is not an option.  I would rather sell my house and down-size if necessary, than the dogs.


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## LennyBriscoe (28 Nov 2008)

Rigoletto said:


> I find it repulsive and offensive to even compare children with dogs. I hope you meant this tongue in cheek but to be honest its gross.


 
In fairness I dont think Paddy was comparing dogs to children. He was inferring that his dogs were very important to the OP.


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## LennyBriscoe (28 Nov 2008)

Rois said:


> Selling my dogs is not an option. I would rather sell my house and down-size if necessary, than the dogs.


 
As others have pointed out you should look into cashing th UK ISA or if this is not an option go down the loan consolidation route through your local credit union.

I wouldnt sell the dogs either, they offer so much comfort at a time when one might be stressed...


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## Welfarite (28 Nov 2008)

Are you or your partner claiming any social welfare payments such as Jobseeker's Allowance?


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## Rois (28 Nov 2008)

No partner involved.  I am classed as a casual worker and do claim for the days I don't work.  However, as my 10 hours employment is often spread over 3 days (late night openings), I don't get very much.  I would probably be financially better off not working at all in that job, but I need the social aspect of it and enjoy it.  I have asked for extra hours, but business is very slow, so nothing definite yet.


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## Pacman (28 Nov 2008)

What interest rates are you paying on all your debt inc the Credit Union loan ?

I would start using cash. Take control of the bank account i.e. cancel ALL direct debits and standing orders (as you are probably getting stung twice - once for missed payments , again for late fees etc, plus the damage it can do to your credit record) , 
Cut up all the credit cards and write a short letter to each creditor explaining your situation, and that you will pay off the balance over time and ask that no further charges be added to the account. Also ask them to switch you to their lowest interest rate possible(no harm in asking). 

Then send them some money every 1 or 2 months - with a brief update on your situation/plan to clear the remaining debt. 

This should give you some breathing space - finally rather than a mortgage, how about a personal loan e.g. Tesco loan 30K at 6.9% over 6 years EUR590 per month, or see if Credit Union can match it or better it. 
Use it to clear most of your debt.


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## Rois (28 Nov 2008)

Thanks for advice Pacman, have to go to work shortly, but will write to cc companies over the weekend. 

Got a little bit of breathing space also, as received a refund of pension payments (€1,100) yesterday.  Already posted cheque to one of credit card companies, transferred 500 STG to UK bank account to fund other payments, can pay off some money owed to family and accountant with the rest. Phew. 

Will talk to the CU next week about increasing my loan.


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## Sarah W (29 Nov 2008)

Rigoletto said:


> I find it repulsive and offensive to even compare children with dogs. I hope you meant this tongue in cheek but to be honest its gross.



Quite right. Dogs are loving, friendly, honest and always pleased to see you. They go to bed on time, don't take drugs and if they do throw up it's not because they're ****ed. Yes, there are some similarities - they will eat anything and everything not locked away, they will bring flea-ridden friends home and they will copulate given the slightest opportunity but all in all, give me dogs any day.

Sorry for the hi-jack.

Sarah W.


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## jhegarty (29 Nov 2008)

Rigoletto said:


> I find it repulsive and offensive to even compare children with dogs. I hope you meant this tongue in cheek but to be honest its gross.
> 
> i think the op should sell the dogs and get out of debt.




Well I find your suggestion of selling his dogs just as repulsive...


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## jimjim972 (30 Nov 2008)

Pay off debts with highest interest rates first once minimum payments have been made to all and especially those who will issue a judgement on your mortgage or issue legal proceedings. Ask yourself how long you are spending on the internet building online business that is yielding no profit - you need to work for payment at this time.


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## Rois (1 Dec 2008)

jimjim972 said:


> Pay off debts with highest interest rates first once minimum payments have been made to all and especially those who will issue a judgement on your mortgage or issue legal proceedings. Ask yourself how long you are spending on the internet building online business that is yielding no profit - you need to work for payment at this time.


 
Thanks Jimjim, more sound advice.  I have also been given extra hours at work for a few weeks so that will help a lot, especially Sunday and Bank Holiday work, as the pay is higher. 

I think it is worth spending time developing the internet business - it's actually doing very well, considering it only went live in mid-July. It has already won a very prestigious award and I see it as a way out of this "poverty trap" all going well in the next year or two.  Many of the start up expenses (financed by credit cards - maybe not the best idea in retrospect) are now gone, and should cost a lot less in the future.


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