# Young Family with Cash Flow Problems



## cian8 (20 Sep 2010)

Age: 26
Spouse’s/Partner's age: 27

Annual gross income from employment or profession: 44000 (~2670 net per month)
Annual gross income of spouse: 0 (150 per month Child Benefit)

Type of employment: Secure job in the private sector with possibility of promotion next year

In general are you: (a) spending
(a) spending more than you earn, or
(b) saving?

Rough estimate of value of home            150,000
Amount outstanding on your mortgage:   146,000
What interest rate are you paying?         Tracker + 1.45%

Other borrowings – car loans/personal loans etc

AIB Loan 6700 (220 per month)
UB Credit Card 4500 (200 per month, cut-up)
MBNA Credit Card 6500 (325 per month)
UB Loan 2000 (338 per month)
BOI Loan 6000 (165 per month)

Total = 25700


Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? See above.

Savings and investments: None

Do you have a pension scheme? Yes, I contribute 5% and work match this.

Do you own any investment or other property? No.

Ages of children: 5 months.


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

Our biggest problem is the amount of money we are spending every month servicing debt. So far we haven't missed any repayments but I can't see us being able to survive until Christmas without missing any. 

My partner went back to University in 2007 for a 4 year course paying full fees this is the source of most of the debt. We expected to run up about this much debt, but we didn't factor in the credit crunch so we had assumed we would be able to keep adding to one loan and thus have an affordable monthly repayment. However after the first years fees we could not increase the original UB loan (due to be repaid in April 2011) and have ended up with this nightmare of debt.

We approached the UB and AIB earlier in the year to see if I could get a consolidating loan but they both refused, so we have struggled on since. My job is quite well paid and has some very nice perks that really help out - like car plus mileage, mobile phone, pay for home broadband etc. Plus we are very proactive in getting the best value for household expenses so our outgoings aside from debt are quite reasonable. Estimate 1000 per month exclude mortgage (~650). I avail of all tax credits etc.

We got married during the summer so I will be able utilise my partners tax credits from Jan 2011 onwards, and I expect a small tax refund due to same.

If we could get one loan over four years to pay off my other debts we would be fine. But how do get this??? AIB and UB basically said that they wouldn't touch debt from other financial institutions with a bargepole so we have a problem. I have been thinking that maybe my parents could guarantee the loans and this might help? I would appreciate any feedback and opinions!


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## niceoneted (20 Sep 2010)

Have you tried UB to see would they incorporate the CC debt you have with them into the loan, thus increasing the UB loan to 6500. 
Try to move your MBNA cc to a 0% balance transfer one so as you are not incurring interest every month it is not paid off. 
You also say you approached UB and AIB about consolidating, have you tried BOI or another bank for that matter.


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## cian8 (21 Sep 2010)

I tried to get a 0% card - there aren't many options left. I had no luck with Tesco or MBNA.

I didn't want to ask too many banks for the loan as I believe that this will decrease my chances due to the fact that each application will show up on my credit report.

I am going to get a copy of my credit report just to make sure it is all kosher.


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## pinkyBear (21 Sep 2010)

Hi there,

What year is your OH in collage? Would there be any chance they could work part time?


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## cian8 (21 Sep 2010)

She was working part time and this was a big help, but, we both agreed that she would give up last Christmas because of the impending birth of our first child. She also had to postpone college until this January because of the timing of the pregnancy (there was a compulsory work placement that had to be completed in one block!). She won't be getting a part-time job while at college and minding our son the rest of time, I think is the right decision!


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## pinkyBear (21 Sep 2010)

> I think is the right decision!


 Would agree! the big problem is you dont have enough equity to remortgage home to include loans.

Would you think of leaking to lenders to lengthen the term of the loans for the time being and possibly paying a minimum off the credid card? Also would you think of stopping your pension contribution while your OH is in collage.. 

I reluctantly give the above advise, however judging by the last post your OH is in third year if there was placement, that means you would only have 1.5 years to go until she qualifies...


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## dereko1969 (21 Sep 2010)

yes dump the pension seems the only option at the moment for you


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## number7 (21 Sep 2010)

Try the credit union, €600 would probably cover it over 5 years.

If not successful then I would put all of my efforts (even to the point of missing some other payments) into clearing the 2k cc then you could re direct the 338 to the next lowest and so on.


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## Complainer (21 Sep 2010)

cian8 said:


> We got married during the summer so I will be able utilise my partners debt from Jan 2011 onwards, and I expect a small tax refund due to same.


Are you referring to her tax credits here? Her debt has no impact on your tax position afaik.


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## galleyslave (21 Sep 2010)

it may be worth contacting the college - they have some assistance available for hardship cases. Play the student card. Can you rent a room to another student for a term?

do you have sky tv ? lose it and save a min of 22 a month. After all with a young kid and a college course there's not much time for TV surely?


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## cian8 (21 Sep 2010)

Complainer said:


> Are you referring to her tax credits here? Her debt has no impact on your tax position afaik.



Yes I meant tax credits, I have edited the original post.


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## niceoneted (21 Sep 2010)

Would there be a possibility that you could look for a payment break from the bank on your mortgage. This would help to clear the two smaller cc's of the biggest one. 
Also get to MABS as it seems that institutions work with them in freezing accounts so you may be able to get the cc's frozen as is. 
Would your wife be in a position to take in a child or two for childcare or after school so as to bring in some extra cash or seeing as she is not going back to college until Jan could she get some part time work in the evenings or weekends. Lots of retail stores should have hours coming up.


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