# Some Advice on personal debt



## Kill Uncle (23 Jun 2012)

Hi Guys

I have like most people over the last 4/5 years got into a lot of personal debt and even though I am servicing everything it wont be long before I cannot. My wife is unemployed for the last couple of years. She claims job seekers. She did receive a large redundancy from her job in 2009 but that is gone(gambling and bad investments) I have kept my job and earn around 50k p.a The mortgage is in my name only and was bought in 2000 with my sister. I bought her out in 2005. Basically my mortgage is 275k on tracker rate with BOI.(would put a rough value of 220k on it now) My wife build up debts /credit cards etc unknown to me (well I didnt know the extent!!!) I approached my bank AIB last year to clear all loans /credit cards etc. They kindly agreed but the terms are penal 23k over 7years at 380pm circa 11.7% APR. Again I took this loan out in my name. My wife also has a lease on a car which will be up next month. Have been paying 400 a month for the last 4 years...so we can give this car back next month and o/s loan will be cleared but she needs a car to get around and visit her sick mother. I make do with a 3k 02 GOLF. Whats left of our rainy day fund is circa 14k worth of shares. So out of salary every month of say 3,200 400 goes to her car 380 goes to personal loan 1100 to mortgage all the utilities gas, heat,VHI ,sky,broadband,mobile phones etc etc leaves about 300 a month for food and ocassional night out once a month. Basically the whole situation is causing me severe stress which effects my sleep and generally makes me quite ill. 

We are both 40 no kids

I suppose the advice I am asking for is do I approach AIB and see if they could do something on their penal level of interest on their loan or do I speak to BOI and discuss the mortgage as a priority. If wife doesnt get job the savings will be gone very quickly. Somethings got to give.....

Thats my life....Any bright ideas appreciated apat from emigrate


----------



## peteb (23 Jun 2012)

So your fixed outgoings are 1880 out of 3200 leaving 1320.  Plus whatever your wife gets from  the state? I'm not being smart here but what is your problem? You are doing a lot better than most are.  And you have savings of 14k too.


----------



## Macstuff (23 Jun 2012)

Hi Kill Uncle, 

Firstly sorry to hear of your situation and stress, I've been there and know what it's like. 
I don't know your situation well but have a couple of observations on it. 
1) Overall your not in a bad position, you can pay your debts and have money left over. Okay it's not a lot of money but you're in a better position than alot of people. So try not to worry too much. 
2) From reading your post I don't get the impression that your wife is taking as much responsibility for the issues as you are. I realise that she had/has a gambling issue. Has that been sorted or is she getting help with that? That needs to be addressed as otherwise you will have more problems going forward. 
3) You also state that she has a more expensive car than you - yet she only really needs something small to drive to see her mum. I'd suggest that ye sell the car once the loan is paid and then buy a small, economical car. You should then use the spare cash that this would generate to pay a lump sum off the loan. 
4) While the interest rate you're paying at the bank is high, it's in or around what banks are offering for personal loans these days. You have a couple of options here:
a) approach the bank and ask to increase the term of the loan. It would cut the monthly payment and give you a bit more breathing space (but obviously make the loan more expensive long term)
b) Put your savings in a credit union and then borrow from them at a cheaper rate, using the new credit union loan to clear the bank loan. 
c) I was able to get a credit card from MBNA with an interest free balance of 6k (for 10 months) from MBNA. I used the money to clear a portion of a loan - saving myself about  600 in interest. You could try this?

Overall your situation is not so bad. Just make sure that you're wife is taking as much responsibility for this as you are? It'll be easier if you can share the burden and stress with someone. Good luck with it.


----------



## Kill Uncle (23 Jun 2012)

Hi Mac 

Thanks for your reply mate. I can assure you the gambling issue is gone and will not return. I am very sure about that. Also when I said gambling some of it was speculating shares etc rather than say the horses or cards etc. This will not be a problem again or I am off. My wife is trying to get various jobs and she will. She does really try. She does not take me for a mug. We are in this together.
The car is a lease so there may be a loan of 16k o/s on it however we can effectively give that back now and that loan is clear (car prob only worth 8k now anyway). We will buy a runaround with some of the savings. I will investigate the CU option for the shares (ironically the shares have increased 15% over the last month so maybe time to cash in)

I lost my best friend to suicide 12 weeks ago. He had some money issues but nothing major.(completly out of the blue no depression,etc) I need to sort my own head and situation out now and I appreciate the feedback.

thanks for the feedback. I feel better already now to put the plan in action


----------



## Kill Uncle (23 Jun 2012)

cashier said:


> I am very sorry to hear this, it is dreadful hard on you to lose a dear friend in this tragic way. Talk to someone about how you feeling.
> Try not to worry too much about the finances, you are able to manage and keep your head above water. The future will be better and your other half will eventually get a new job.


 
Thanks cashier

appreciate your thoughts


----------



## Macstuff (23 Jun 2012)

Hi Kill Uncle,

I'm very sorry to hear about your friend, that must have been a great shock and loss for you. Thats tough, I hope you are getting on okay. 
I am glad to hear that you're wife is working on her issues, and that you two are in this together. It will help you to have someone to share this with. 

Overall as I said above you are not in a bad position, you have some spare money every month. You also have options for clearing down your debt - I have given you some, there are others too. Have a read of other threads on this forum, you might pick up some ideas. 
It might also be worth filling out the 'Money Makeover' section, you might pick up some tips for saving on your outgoings. 

Keep going, try not to worry too much, you're not in a bad position. You will get there. 

PS make sure to plan some nice (cheap) treats for both of you as you sort things out, life's short, so don't lose too much time to worrying about this. I was in your boat and am now coming out the other side, it takes time and you have to keep chipping away at the debt. 

Best of luck


----------



## STEINER (23 Jun 2012)

Kill Uncle said:


> Hi Guys
> 
> I have like most people over the last 4/5 years got into a lot of personal debt and even though I am servicing everything it wont be long before I cannot. My wife is unemployed for the last couple of years. She claims job seekers. She did receive a large redundancy from her job in 2009 but that is gone(gambling and bad investments) I have kept my job and earn around 50k p.a The mortgage is in my name only and was bought in 2000 with my sister. I bought her out in 2005. Basically my mortgage is 275k on tracker rate with BOI.(would put a rough value of 220k on it now) My wife build up debts /credit cards etc unknown to me (well I didnt know the extent!!!) I approached my bank AIB last year to clear all loans /credit cards etc. They kindly agreed but the terms are penal 23k over 7years at 380pm circa 11.7% APR. Again I took this loan out in my name. My wife also has a lease on a car which will be up next month. Have been paying 400 a month for the last 4 years...so we can give this car back next month and o/s loan will be cleared but she needs a car to get around and visit her sick mother. I make do with a 3k 02 GOLF. Whats left of our rainy day fund is circa 14k worth of shares. So out of salary every month of say 3,200 400 goes to her car 380 goes to personal loan 1100 to mortgage all the utilities gas, heat,VHI ,sky,broadband,mobile phones etc etc leaves about 300 a month for food and ocassional night out once a month. Basically the whole situation is causing me severe stress which effects my sleep and generally makes me quite ill.
> 
> ...



You need to thoroughly analyse your expenditure and eliminate wastage.
You are able to pay your mortgage ok.  Things are tight for you as you are repaying the personal debt €380 pm.  Is there any way your wife can do without another car? 2 cars for 1 worker and 1 jobseeker is expensive.
Consider liquidating the shares, maybe put 5k off the 7 year loan, leave 9k on deposit, if you could put 5k or so off the loan and get the monthly repayment reduced from €380 to a lower figure.  If you only have 1 car, that frees at least €400 pm to live on/save etc


----------



## Kill Uncle (24 Jun 2012)

STEINER said:


> You need to thoroughly analyse your expenditure and eliminate wastage.
> You are able to pay your mortgage ok. Things are tight for you as you are repaying the personal debt €380 pm. Is there any way your wife can do without another car? 2 cars for 1 worker and 1 jobseeker is expensive.
> Consider liquidating the shares, maybe put 5k off the 7 year loan, leave 9k on deposit, if you could put 5k or so off the loan and get the monthly repayment reduced from €380 to a lower figure. If you only have 1 car, that frees at least €400 pm to live on/save etc


 
Thanks Steiner 

There is very little wastage. I havent renewed my passport in 2 years as we cannot afford to go away. The car will be gone very soon (it has too) but because of where we are living a second car is essential and needed for parents who require constant care. 

Thanks for your reply food for thought


----------



## Kill Uncle (24 Jun 2012)

Macstuff said:


> Hi Kill Uncle,
> 
> I'm very sorry to hear about your friend, that must have been a great shock and loss for you. Thats tough, I hope you are getting on okay.
> I am glad to hear that you're wife is working on her issues, and that you two are in this together. It will help you to have someone to share this with.
> ...


----------



## frostie (26 Jun 2012)

If you want to keep the hire purchase car, rather than handing it back, you could use some of your savings to offer them a settlement - if the car is only worth 8k, the HP company will likely accept this in final settlement, as the next step for them, when they get the car back is to collect it, clean it up and sell it anyway. They will happy to avoid the hassle, and you get to keep your car. The rest of the balance would be written off in final settlement.

That's your €400 a month freed up to pay your loan off.


www.frost.ie


----------



## johnmurf83 (2 Jul 2012)

It makes me laugh when I hear sky tv listed as an outgoing expense. If things are that tight would such luxury expenses not be the first thing to go. Cutting your cloth to measure its called. I know plenty of people in well paid jobs who choose not to pay the ridiculous cost of satellite tv so I don't see why someone in financial difficulty should consider it a necessity.


----------



## wbbs (2 Jul 2012)

While you could say that sky or similar is a luxury, normally most banks/lenders etc will allow the basic tv package as a legitimate expense on the basis that all other socialising/entertainment is gone when you are at this stage.   The basic package mind you not the bells and whistles one.


----------

