# Don't know where to start...low income and large arrears



## MariaB (31 Mar 2016)

Hi, first time posting and honestly facing up to our financial situation 

I hadn't paid my mortgage in 5 years, yes 5 years!!
The arrears are 63k, there is no legal action taken though and I've only opened up the communication with the lender in the last few weeks and paid 730e last week as my first payment in that 5 year period. 

Balance on mortgage is: 220,000 
Arrears: 63,000
Term remaining:  22 years 
Value of house: 200,000 (total guess as house has pyrite and houses in area selling for 220 without pyrite) 
Supposed to be paying around 1100-1150 a month
Lender: Pepper (Shoreline residential, was with Anglo also and originally with INBS) 

Income is 2235 per month salary for a family of 6, 2 adults and 4 young kids (Two infants and two primary school children) 
Also have FIS at 520euro per month and Child benefit which is 420e (will increase to 560e when newborn is added to the child benefit) 

I am not working, haven't worked in 6 and half years, I've also just had a baby. I am the mortgage holder since 2005 (not my other half) and fell into problems when my first was born in 2009 but paid interest only payments for a year and a moritorium extension was refused so I stopped paying. I really regret not paying anything now, but at the time we couldn't have paid 300e nevermind the 1150 they were looking for so I just stuck my head in the sand. We have passed the MARP deadline at this stage. 

My OH is the only earner, and his salary isn't great to support us all. He has a personal debt of 525 a month with AIB and he has a good credit rating that he does not want to jeopardise. 
We are entitled to FIS which we are hoping to have renewed and increased along with Child Benefit. Just waiting on the birth cert to get the ball rolling on this. 

A representitive of Pepper came out to visit us last week and we filled in a SFS form together, she said it was just approx and to get an idea of where we are...  I did ask what should I prepare for the meeting and she said she only needed approx figures of what our bills are so I was kinda plucking some figures out of the sky at one stage although I did know how much utilties, car tax, insurance, food costs were. 
She did out our figures and said we can pay 730e this month which can increase to 1000 when the FIS and child benefit starts coming in at the higher rate but I had the wrong figures in for a few things which I just guessed at. 
She put living expenses in at 150e a month and clothing at 100e when I believe these are around 350 and 250 respectively going by the average on reasonable living expenses guidelines. I signed this form after she finished filling it in which I am worried about because its making it out we have less expenditure than we actually do. 
(I have no life assurance or house insurance so those are zero on the form and I feel these should be in place!) 
Are we snookered because I signed this form? I have been so worried over that

I just can't see how this is attainable at all. Our reasonable living expenses on the website comes in at 2360e
She also said my OH should restructure his personal loan to extend the term and to pay more towards the mortgage so it goes up to 1245 a month, if we do that she said Pepper will offer us a recapitalise and a term extension of 8 years onto the mortgage at around 1250 a month. 

Its not possible, we are looking at a figure of 400euro we can pay towards the mortgage and thats without looking at the other debts I have (none of these are being paid either :O)

I started engaging with Irish Mortgage Holders and they took a cursory glance at our income and expenditure and advised we should be paying 800e a month (without taking into account OH 525e loan) so that is in line with the 400 we can afford. 

I just don't know the next step, I think I need expert insolvency advice how to deal with this mess. I find this so overwhelming and intimidating as I don't understand much of the lingo I've seen on these posts 
I haven't instructed Irish Mortgage Holders to continue because I am not sure if I need expert insolvency advice first and look at all our debt/financial situation rather than just the mortgage and see what options are there like insolvency. Tried looking online but I have no idea what to look for or who. Is there a list or panel here of people I can hire? 
I tried searching and nothing comes up in the search box. 

Is it possible to keep your house and pay a third of what they are looking for? Is there a write down option available to people like me? 

Thanks so much, sorry for the scatty post.
MB


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## vandriver (31 Mar 2016)

The reasonable living expenses for the children already have child benefit deducted,so your actual RLE would be €2360+560.
Please sit down and include everything that needs to be spent and do up your own SFS,in your own time without the stress of the bank official being there.
As an example,€100 a month for clothing equates to €16 a month each (shoes as well,and work clothes for o/h),which seems grossly inadequate.
How long does your o/h loan run for?(A quarter of his salary for a loan when you can't pay any mortgage seems irresponsible)
Edit:You mention 'other loans',could you clarify as this would have an impact on insolvency advice.


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## elbo (6 Apr 2016)

U need to engage with imho they work in conjunction with insolvency experts they can give you all the advice u need...or try Mabs if u want a second opinion? For your own sake and your family you should try and sort this you will feel much better once you get the ball rolling and have some structure ..it's hard to be in this position with lil ones (snap) but their home is your priority and that of your OH also ....head out of sand ...shake it off ...only you can do this ...but the help is there,use it, good luck


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## Bronte (7 Apr 2016)

MariaB said:


> Hi, first time posting and honestly facing up to our financial situation



Good start to the post Maria.

Balance on mortgage is: 220,000
Arrears: 63,000
Term remaining:  22 years
Value of house: 200,000 (total guess as house has pyrite and houses in area selling for 220 without pyrite)
Supposed to be paying around 1100-1150 a month
Lender: Pepper

Family of 6, 2 adults and 4/5 young kids

Income is 3175 per month

My OH is the only earner . He has a personal debt of 525 a month with AIB

Our reasonable living expenses on the website comes in at 2360e

*She also said my OH should restructure his personal loan to extend the term and to pay more towards the mortgage so it goes up to 1245 a month, if we do that she said Pepper will offer us a recapitalise and a term extension of 8 years onto the mortgage at around 1250 a month.*


I started engaging with Irish Mortgage Holders and they took a cursory glance at our income and expenditure and advised we should be paying 800e a month (without taking into account OH 525e loan)



*Is it possible to keep your house and pay a third of what they are looking for*? Is there a write down option available to people like me?

________

Mistake 1 not having correct figures for spending, you absolutely need to go and figure this out now.  How do you pay for things, use your bank statement or look at your bills to figure it out.

Comment on Pepper rep

Just love that she thinks the extra for the newborn can all go to Pepper ! And that she must have realised a mother with 5 kids under 8 must be frazzeled to say the least.

Don't worry about the form, send them an email telling them the figrues are wrong and you need to speak to the representative again.  Explain you were stressed etc.  Print and keep a copy of the email (start a file)

Life and house insurance, I most certainly think you need both.

You can't afford to hire anybody.  The IMHO are your best bet and I presume they are free.  They are right, you can afford €800 based on the reasonable standard chart taking into account your income.

Questions:

1. You owe 220 + 63 = 283K ?
2. No way is it worth 200K How much does a pyrite house cost to fix?
At a guess I'd say depending on how bad it's unsaleable
3. Who are your other debts with, name them ?  They don't matter, you've no income and no equity.  Yourmortgage has to be prioritised BUT once that is sorted you need to go insolvent or whatever is needed to wipe the other debts so they don't put a judgement mortgage on your house.
4. Your husband's debt.  How is it important for him to keep his credit rating in a situation with a wife and 5 children and he can pay the mortgage to keep a house over everybodies head instead of paying AIB?
5. How much is it to rent a house where you are?


Comment

1. You need IMHO to negotiate a better deal with Pepper if possible, it's clear you're not able to handle them so leave it to them but follow closely
2. Your husband needs to realise the home is more important than his credit rating.
3. Does losing the house matter, is it only a matter of time, you've actually got Pepper over quite a barrell because
a) large family
b) young kids
c) large NE
d) Pyrite

So unless I'm mistaken and I'm no expert, that is a good negotation that IMHO can use for you


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## 44brendan (7 Apr 2016)

Bronte said:


> Mistake 1 not having correct figures for spending


Unlikely to be a mistake. I find a lot of the time banks tend to press clients to supply quick figures on the basis that they will come in at a low level. Under pressure the clients can often omit key expenses. Take the advice of van driver and sit down together and complete a new SFS using realistic figures. These should broadly comply with the ISI guidelines as stated above.
If you want to stay in the house you need to prioritise your mortgage above other debts. It is unrealistic to be paying 525 towards another debt at the expense of your mortgage. What would it cost you to rent a similar sized house in your locality. If you start paying app this amount on a regular basis to pepper it will help in avoiding repossession proceedings. However sooner or later you will need to bring payment level up to around 1,000 which is a sustainable level for the 220k balance. Your total income is €3,175 so this will leave you with 2,175 which will be tight but would possibly represent the only way to stay in the property long term. paying external loans are not an option given your current income level. In reality external creditors can do little if you don't pay them as the income is just not there.


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## Bronte (7 Apr 2016)

44brendan said:


> Unlikely to be a mistake. I find a lot of the time banks tend to press clients to supply quick figures on the basis that they will come in at a low level. Under pressure the clients can often omit key expenses.



But this is a crazy way for banks to operate, it means from the get go the figures will be wrong and the 'solution' based on incorrect figures will fail after a month or so.  I don't actually see how this is going to work long term, not on an income like that with so many children. 

Do you find the ISI guidlines to be realistic by the way?


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## 44brendan (7 Apr 2016)

Bronte said:


> But this is a crazy way for banks to operate, it means from the get go the figures will be wrong and the 'solution' based on incorrect figures will fail after a month or so. I don't actually see how this is going to work long term, not on an income like that with so many children.


Now you're getting the picture Bronte! As well as working within the banking sector I have acted as FA for some family members in a voluntary capacity. Ulster in particular tend to ignore written SFS's sent to them and then ring the clients and question them off the cuff in respect of spending figures. I agree that it makes no sense but there you are!!
IS guidelines in my view are pretty realistic and while they don't cater for unique circumstances (no guidelines can) they are a reasonable reflection of average family spending requirements. Having said that I would find it pretty difficult myself to operate within those limits over a medium to long term


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## vandriver (7 Apr 2016)

This seems doomed to failure.The RLE for the family is €2,910 including child benefit, but excluding rent,mortgage.
So,if pepper want €1,200 then this family's income would need to be north of 4k a month.
As it stands,their income is :
2,235 salary
560 child benefit
700 ish FIS (my guesstimate)
Which leaves a shortfall of about 600 every month.
(Not even thinking about the 500 personal loan repayment)


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## ebs_customer (7 Apr 2016)

Why have you continued to have children when you can't even afford to pay your mortgage? 
Surely this is very irresponsible, and you are expecting the taxpayer to pick up the tab for your lifestyle indefinitely.
Your partner's credit rating is irrelevant as nobody will lend him anything on his salary given his existing outgoings, you are already effectively bankrupt - social welfare is meeting one third of your income and that is still leaving you in the red to the tune of your mortgage repayment.
The best option is probably to default on the AIB loan and divert all remaining income to the mortgage to try and prevent repossession.


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## gar32 (7 Apr 2016)

Maria seems you need advice and I am sure you are not having the best time of your life with this on your mind. 

Options

1. Could a part time job be found? Maybe even a 2nd job? 

2. Could you ask family to help with person loan and get it paid off so you could work on paying mortgage?

3. Could you sell up and try rent some where?

4. Has your other half asked for a rise in work?

5. Maybe a change of career is needed with high pay? 

6. Could contact AIB about person loan to freeze it for a year or so?

7. Do you have anything you could sell you pay off the loan for AIB?

You may be able to do 1 or 2 of these things but its better to face the music and been seen to be trying to sort things out. 
One very important things is to account for every penny and try make savings everywhere you can.

http://www.boards.ie/vbulletin/forumdisplay.php?f=1530

Could you switch services and save money? Could you even consider stopping internet or TV ?

I wish you luck with sorting things out. Don't let it get you down. Put family needs 1st & just try your best.


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## Easeler (7 Apr 2016)

ebs_customer said:


> Why have you continued to have children when you can't even afford to pay your mortgage?
> Surely this is very irresponsible, and you are expecting the taxpayer to pick up the tab for your lifestyle indefinitely.
> Your partner's credit rating is irrelevant as nobody will lend him anything on his salary given his existing outgoings, you are already effectively bankrupt - social welfare is meeting one third of your income and that is still leaving you in the red to the tune of your mortgage repayment.
> The best option is probably to default on the AIB loan and divert all remaining income to the mortgage to try and prevent repossession.


Ya totally agree with you only rich people should be allowed have kids and the peasants should nurtured humanly ofcouse, This post will be deleted if not edited immediately come to think of it I would nt have been born at all because my parents were poor and lived in a council house.


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## ebs_customer (8 Apr 2016)

Fair point galwaypat but a bit controversial.
Hard to have much sympathy with the OPs situation.
She ran into financial difficulty after having one child and then decided that the best course of action was to pump out 3 more.

Meanwhile prudent young couples are scrimping and saving to buy houses and afford childcare all the while paying taxes to enable MariaB continue in her chosen lifestyle.


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## Setanta12 (8 Apr 2016)

@Ebs customer, speaking as one of those scrimping and saving, and as a parent - I realise we live in a society not an economy.  Finger-pointing gets us nowhere. Yeah, its not great - but hey, they've a batch of kids so I would see this as an achievement! If she was off gallivanting around the world, I might agree with you - but not with the kids part.

(I wish my work circumstances would allow me more kids - but we all make choices)


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## ebs_customer (8 Apr 2016)

@Setanta12, I agree wholeheartedly. I think it's great that we have a social welfare system that supports people who fall on hard times. However this isn't that type of case in my opinion. This person has consciously chosen to have additional children in the full knowledge that she didn't have the means to support them. 
A supportive social welfare system relies on those paying taxes to keep it running and when it is taken advantage of in this fashion it's bound to lead to resentment from those that are working hard to fund it.


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## thedaddyman (8 Apr 2016)

Surely the big issue here is that the OH is more interested in maintaining his credit rating then paying off the mortgage?. Without knowing what his loan is for, if it's an unsecured loan then it should go to the bottom of the list in terms of repayment. If that means a car gets reposed or whatever the loan is for, so be it

Secondly the op should take a long hard look at their tax affairs and make sure credits are being used in the best manner and that things like health expenses are being claimed for.


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## moneybox (8 Apr 2016)

Five years is a long long time without making repayments to a mortgage, frankly it's quite a ridiculous situation that the banks haven't lifted a finger to address her situation. She admits herself that it was she who has initiated contact with them..  If she was living in the UK, the banks would have commenced a repossession within six months.  It's not much use having a go at her now for having so many kids, the problem is what can she do going forward.  A poster said get a job, how can she with two infants?  and giving up things like broadband and sky isn't going to make a huge difference in tackling the massive arrears that have accumulated on this mortgage.


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## elcato (8 Apr 2016)

MariaB said:


> Is it possible to keep your house and pay a third of what they are looking for? Is there a write down option available to people like me?


Getting back on track. yes. As Brendan said, pay what you can every month for now. The bank have acted their usual arrogant self here so no sympathies for them. Do not engage by phone or face to face again. Get everything in writing and do it in your own time. Your position is strong here as the house is not worth much and repossesion will be long and tiresome. How much is rent in the area for the same house ? That is the amount you should aim to pay in the long run here cos' after all if you just leave the house and get debt write off you will still need to rent. IMHO figures look to be fair imo but maybe in the long run rather than straight away. The mysterious loan your husband is paying back needs to be explained though. In fairness to the bank rolling it into a lower interest rate albeit at a longer period is a logical enough solution.


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## Micky (8 Apr 2016)

Is it a case here that statute of limitations would apply after 6 years from breach of contract on loan agreement (not under seal) i.e. from date of the second missed payment?


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## 44brendan (8 Apr 2016)

Micky said:


> Is it a case here that statute of limitations would apply after 6 years from breach of contract on loan agreement (not under seal) i.e. from date of the second missed payment?


Nope. Statute of limitations is 12 years in the case of loans secured by land/buildings.


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