# 29,000 Personal Debt



## Bazinga (31 May 2013)

I am trying to get on top of my finances for the first time in my life. I am 30 years old with no house/ mortgage but I have a large personal debt. The main loans were taken out for a car, and the rest for education expenses. I have a decent job which I've now been in for three years. Initially this debt stood at 51,000 euro but I have been paying off about 1600 a month. It leaves me with about 1000 to live on per month which does not cover my expenses some months and I have borrowed off family members some months which now leaves me owing 700 to one of them. I also have a bill for my car of 1000 euro. These are included in my total debt now but I cant see how I can start paying them off unless I get a consolidation loan. I have a good credit history with the bank but not with the credit union. This credit union account is in arrears but it is not on my credit report.

The debts I have are as follows:
Credit Union Loan: 8100
BOI Loan 1: 10525
BOI Loan 2: 3217
BOI MasterCard: 1941
Tesco Visa: 2006
BOI Overdraft: 2250
Family Loans: 700
Car Repair Bill: 1000

I have shares in the credit union of 1006 euro which leaves total debt at 28700.

My repayments total 1600 per month with the BOI Loan 1 fixed at 587, boi loan 2 at 127 and the credit union at 550, the balance of the repayments I make to my credit cards, I am always at the limit of my Overdraft.

Has anyone got any advice on what I should do to pay the other debt ( Could I apply for a consolidation loan? If so where). I have to pay 200 of the family debt and at least 500 of the car bill this month but I don't know where I will get it from?

Thanks


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## vandriver (31 May 2013)

What's the car worth?Could you sell it and downgrade to a cheap runaround and use the cash to kill some loans?


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## Bazinga (31 May 2013)

Car is worth about 2500 but I drive 40 mins to work a day so I doubt I could get a cheaper reliable car. I bought it for 14,000 but that would have been about 5 years ago


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## PadKiss (31 May 2013)

Hi Bazinga
My advice here is to roll all o/s debts (30k) to one term loan over 5 years which will cost approx 540 per month thereby enabling you to get some control over your finances. In order to achieve the getting of the term loan you may have to ask a family member for support in getting the loan in place if the bank or Credit Union require this but if you are in a good income paying job this is the best approach to take as it will get the bill to one cost per month. May not be as easy to do as it sounds because your credit history will also be taken into account. But the overall interest rate will be lower. If this doesnt work you may have to go to each of the concerned parties and renegociate the terms/extend to allow the cost to come down so its affordable on a monthly basis. Hope this helps and good luck Padraic


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## Bazinga (31 May 2013)

Thanks for the reply PadKiss,

That's what I was thinking too. BOI won't do a consolidation loan even though I've always paid on time every month for the loans and credit card I have with them. I'm hoping that applying to AIB might work out better if I move all my banking to them so will fill out loan application for them. I'm hoping that BOI are just refusing it because they are making more in interest between the loans/ credit card than they would be on the larger loan. I know there is a high likelihood that AIB will reject the loan but I was already thinking that that might be the best course of action for now.

I appreciate the advice, Thanks.


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## vandriver (31 May 2013)

So if you took out a car loan 5 years ago,then it should be paid off ?
Have you stopped using the credit cards?


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## ClaireM (31 May 2013)

I think getting a family member to guarantee a consolidation loan would be a bad decision. At the moment if you default you are the only one impacted.

Can you reduce the loan repayments slightly so you can manage them without having to borrow from friends and family? Has the interest been stopped on the loans and credit cards


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## Bazinga (31 May 2013)

The amount for the car loan as such has been paid off but I've never actually been out of debt as that loan was topped up each year for college fees. The debt that is left now is from College fees that I had to pay. I don't use the credit cards anymore. I reduce the balances of each. I am paying the loans and cards at the interest rates that apply and there is interest every month. The debt is going down and each month I pay less interest but its just I have no money left if I have an expense like the car repairs. I wouldn't feel comfortable asking a family member to guarantee loan, its not that I think I will default on it but its my debt, my problem, I don't want to ask them to do that. I applied to aib online for a 29000 loan over 30 months which would leave repayments at about 950 a month which would leave me 650 a month if I need it and otherwise I can pay extra off the loan but I presume I won't hear anything from them until Tuesday.


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## vandriver (31 May 2013)

What's your plan b? You need to pay less per month over a longer term on both your main loans.Have you talked to the CU about this? Have you talked to BofI about consolidating their loans only to you?
I frankly think you haven't a hope in hell of getting 29k off AIB,so you need another plan (imo)


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## Bazinga (1 Jun 2013)

Thanks vandriver I know you are probably right regarding aib the difficulty I have is I don't think I have to many other options open to me. I approached the bank to see if they would look at extending the term of the loan with the intention of lowerimg payments but they said the terms of the loan can't be changed after it was signed. The guy I was dealing with said I wasn't in arrears so they could see that I was able to pay so his advice was to continue to do so and if I got the balances down to a lower amount they might consider a loan. I also asked them if they would consolidate their debts only into one debt and they refused that too. I presume there is no way of making them do anything for me and if they don't agree there is nothing further I can do to make them? The credit union were not receptive at all but in fairness there is already arrears on that account. At the moment all I can think of doing is to pay the min from the credit cards n offer garage as much as I can each month? I honestly don't know what else to do?


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## vandriver (1 Jun 2013)

As a drastic move,if the bank won't deal with your request while you are not in arrears,is to use the next 2-3 months of BofI money to pay all of the garage,family debt.


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## Nane (1 Jun 2013)

Hi Bazinga,

Are you single? Do you rent? You said you live on 1000 per month. This is a lot for a single person. Is it possible to go back to live with your family to save on rent for a while? Maybe it is possible to find a bit of extra money cutting out expenses.


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## Bronte (3 Jun 2013)

Bazinga said:


> . The guy I was dealing with said I wasn't in arrears so they could see that I was able to pay so his advice was


 
That's your problem there, what's he's saying to you is you are a performing borrower and therefore you don't need help. But the problem is your actually sinking into further debt by borrowing from family and now having a car repair bill you cannot afford. 

The drastic step is to default a few times, then they will deal with you. What you could do is pay off the family member and the car repairs and then pay what's left over each month to your your creditors. 

Same story with credit cards, until you start defaulting they will not cut a deal such as zero interest or a lump sum repayment amount at less than loan amount.

Ideally the consolidation loan would solve all the problems for you, but so far BofI, the one you have 4 debts with are refusing.


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## burmo (3 Jun 2013)

Please fill out your income and expenses in a standard template so we can get a better idea of your circumstances.


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