# Massive Debt - worst ever



## amyhelp1 (29 Jan 2010)

I have read alot of posters saying they are very bad off but I've never heard of anyone as bad as us.  So any constructive advice is appreciated. Forgive me but I dont know how or where to get the layout which asks the specific questions re amounts etc so ill try and include everything but feel free to ask me for what I have forgotten. Here goes;

Earnings p/m:
Me; 3000
Husband: Varies (relief worker) Never ususally less than 1800, average
Child Benefit: 3 children, 487

Outgoings p/m:
Mortgage: Borrowed 445k, fixed rate until 2012, repayments of 2485 p/m. We struggled with it so bank agreed to an underpayment, pay 2020 p/m but the difference goes down as arrears each month.  That and the fact that we missed alot of payments now puts us at approx 13k in arrears.

Car loan; 450 p/m
Credit Union 1: 300p/m (was 480 but agreed to cut it down for us)
Credit Union 2: 300p/m (same as above)
Life Assurance 90p/m
Childcare: 990p/m
Internet & Phone credit: 80p/m
Management Co. Fees: 30p/m
Television License: 13p/m
Tv - basic package: 27p/m
Plus I have a bad outstanding debt of 4500 euro which needs serious attention due to a judgement on my house for not being paid.
Husband travels by train to work; approx 80p/m
Plus petrol costs, approx 200p/m - car is essential
Then all the other usuals, utility bills, shopping etc. 3 children in nappies

I am currently engaging with mabs but just looking for another perspective really. Obviously selling the house or indeed walking away from it is not an option as we are in negative equity. I know its a case of having borrowed too much.  We dont smoke, very rarely drink, odd bottle of wine maybe once a fortnight. 
Anyone willing to comment?


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## manaboutdog (29 Jan 2010)

How much is the house currently worth? That mortgage is huge for people bringing in what you do. I presume personal circumstances have changed in the meantime since you bought it?

You could sell the house and rent while you pay off the remainder of the mortgage?


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## amyhelp1 (29 Jan 2010)

We paid 495k for the house, would prob be lucky to get 350k for it now. Yes circs have changed.  My husband was let go from his position and has since found some relief work which can vary from month to month. Plus we have had 3 children since buying hence the childcare costs.


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## amyhelp1 (29 Jan 2010)

Meant to also include, the car loan finishes in October this year but the credit union loans are bot for another 3 years each


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## Howitzer (29 Jan 2010)

Are the incomes of 3000 and 1800 before or after tax?


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## bluemack (29 Jan 2010)

Id say you need to consider walking away from the house. I assume as you are defaulting on loans you have bad credit and im not sure but sounds like you then have nothing to lose (but the house). 
If you walked away and I asume then went bankrupt (can you do that here? in the UK you need 20k of bad dept) also this will get rid of all your depts. start again.
The reality of this is in 6 months time you could some how get a loan for a house buy the same sized house back for half the price, buy a car from your earnings. and be paying no where near the morgage you are now.

so in theroy 6 months time you could be back where you are now but no where near the dept.. I guess youll need the help of family in the mean time and to get any kind of loans in the future.

the only other option is to keep going and stay in dept for the next 30 years hope for a pay rise...


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## stephnyc (29 Jan 2010)

oh not again! that is not how it works in Ireland!

OP, 

*I*f you cut your losses and sell your home, you would still be liable for the remainder of the loan (so 495K-350K=145K in this case). I would consider this as a last resort. 

Talk to MABS and try to come to some arrangement regarding your loan repayments. 

Also, if you put your info in the following format it might help people give you better ideas. You need to outline full amount of loan outstanding, payments, and interest rate (eg: CU 2200 left, 200 per month for 11 months @ 5.8%)

Good Luck!


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## Howitzer (29 Jan 2010)

Looking back at the numbers you really do need to get rid of some of your expenses and quick. 

Sell your car and buy a banger. You're paying 5.5K a year on a loan. Sell the car, clear the loan and buy something more appropriate to your current means.

You're paying 1.1K a year in Life Assurance. Do you need this policy, is it a condition of your mortgage?

You're 12K a year in childcare. You have to reduce this significently, if not completely. You are not in a position to pay someone this amount of money. A neighbour, friend or family. You're not in a position to be proud.

Do not follow bluemack's advice regarding bankruptcy. Irish bankruptcy laws are completely different and you'll end up in an even worse situation.


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## buckrodgers (29 Jan 2010)

The vincent de paul can be a great help. They might be worth keeping in mind. 
Your local health board office may give you an emergency payment if you applied to them.
Both of the above helped me when I was in difficulty. 
How about selling the car and buying something older and cheaper.


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## luckystar (29 Jan 2010)

What have Mabs suggested? Does your husband earn significantly over 1800? could he? with childcare costs so high it might be more beneficial for him to stay at home, you to claim his tax credits, him to work around your schedule?

how much are the 2 credit union loans? is there any scope there to lengthen loans/consolidate them?


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## 4th estate (29 Jan 2010)

luckystar said:


> What have Mabs suggested? Does your husband earn significantly over 1800? could he? with childcare costs so high it might be more beneficial for him to stay at home, you to claim his tax credits, him to work around your schedule?
> 
> how much are the 2 credit union loans? is there any scope there to lengthen loans/consolidate them?



I think this is worth exploring.

If the husband gave up his job and stayed at home, there would be no childcare costs, commuting costs etc. The wife could claim the tax credits. Less stress on the homelife I would think. 

Overall, I am very sympathetic to people in this situation. It must be awful. I cannot understand why the bankruptcy laws in this country are so restrictive, compared to the UK anyway. 

Many would love to have the UK bankruptcy option I think. Good luck to you, and all the best, hope you get sorted.


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## UFC (29 Jan 2010)

bluemack said:


> Id say you need to consider walking away from the house. I assume as you are defaulting on loans you have bad credit and im not sure but sounds like you then have nothing to lose (but the house).
> If you walked away and I asume then went bankrupt (can you do that here? in the UK you need 20k of bad dept) also this will get rid of all your depts. start again.
> The reality of this is in 6 months time you could some how get a loan for a house buy the same sized house back for half the price, buy a car from your earnings. and be paying no where near the morgage you are now.
> 
> ...


 
This advice is completely wrong.

You cannot walk away from your home.
Bankruptcy doesn't exist in Ireland.
Bad credit ratings last for 6 *years*. Judgements last for life.

Please dismiss everything bluemack has said.


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## chlipps (29 Jan 2010)

You are bringing in approx €5287 per month between your wages and child benefit (assuming values in first post are after tax). Your total outgoings seem to be approx same value, but if you fill out stephnyc post this would be clearer as to whether your monthly spend exceeds your incoming wage. If outgoings>incoming total then you need to challenge every spend and try minimise it or avoid it

e.g. Basic TV package - get rid of it. Small saving would be to get rid of the basic tv package and go for free to air channels... hundreds of channels free to air so 300 eur per yr saved

I assume you are shopping in LIDL, ALDI etc and avoid the convenience stores. 
Both of you are taking packed lunches to work... buying lunches daily can be very expensive.. You should run daily diaries and cut the spending to the minimum.

I would like to see more details on credit union loans.. how much remaining?.. have you savings held up here as a result of these loans...usually 1/3 in saving in order to get 3 times the loan?? Clear one loan and try get the saved money released. Is this possible?


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## z107 (29 Jan 2010)

> You cannot walk away from your home.
> Bankruptcy doesn't exist in Ireland.
> Bad credit ratings last for 6 years. Judgements last for life.



People need to be realistic about this. I would suggest finding out exactly what the ramifications of walking away from it all are, from a solicitor.

Consider this:


> We paid 495k for the house, would prob be lucky to get 350k for it now.


I would rather the six year credit blacklist, than try to pay this back. When will this house ever be sold for 495k? 6 years? 12 years? in our lifetime?

At least explore this option, so you have all the facts.


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## BoscoTalking (30 Jan 2010)

i wonder if your husband did stay at home could he mind another child after school or perhaps a toddler. After school rates in my creche are in the region of 600pm and it would perhaps keep the children in whatever stuff they need for extra curricular and school. 
Secondly - i give to St. V de P to help folks like you where needed so please use them, because they are full of practical advice.


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## Lsquared (30 Jan 2010)

Im really sorry to hear about your circumstances, especially the loan of 4500 and the judgement associated with it. There have been good ideas given for cutting expenses to the bone which you will need to do in order to throw more money at the debt. Also, any way to increase income even once offs should be looked at. Next year is a census year and I remember appying to be a census collector the last time - the money was around 1000 euro or more if I remember right ( I didnt do it in the end ). Perhaps if your husband hasnt found more steady income he could check that out - I say try anything. 

You didnt mention what your combined income was when you took out that mortgage or what your overall debt levels were at the time but Im shocked that at your stage in life, wishing start a family and all, that you were allowed to take on half a million in combined debt. Good luck with all of this.


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## Complainer (30 Jan 2010)

chlipps said:


> e.g. Basic TV package - get rid of it. Small saving would be to get rid of the basic tv package and go for free to air channels... hundreds of channels free to air so 300 eur per yr saved


But you'd have to buy and fit a dish first right? Costing about €300?


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## manaboutdog (30 Jan 2010)

if they already have a sky subscription then all the hardware is already in place, no extra outlay required


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## Complainer (30 Jan 2010)

manaboutdog said:


> if they already have a sky subscription then all the hardware is already in place, no extra outlay required



Who mentioned a dish?


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## Nermal (30 Jan 2010)

4th estate said:


> Many would love to have the UK bankruptcy option I think. Good luck to you, and all the best, hope you get sorted.



They could reside in the UK for a short period of time and then declare bankruptcy, which would also cover their Irish debt.


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## manaboutdog (31 Jan 2010)

Complainer said:


> Who mentioned a dish?



You were the first one to mention a dish I believe, the point I was making is that if they are currently paying for sky then they already have the necessary hardware.

If they don't already have one, your 'quote' of 300 euros is completely off the mark, you can buy everything you need to get setup in Lidl this Monday for 79.99(Cheaper on ebay or donedeal). Setup is of this type of system is pretty facile and can be done by most people by following the enclosed instructions.

Anyway just trying to be helpful here, not get into an off-topic spat.


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## Complainer (31 Jan 2010)

manaboutdog said:


> You were the first one to mention a dish I believe, the point I was making is that if they are currently paying for sky then they already have the necessary hardware.


Who said they were currently paying for sky?


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## ajapale (31 Jan 2010)

amyhelp1 said:


> TV - Basic Package: €27/m


OK enough! Until we hear to the contrary from the OP lets *assume* that this is a basic NTL/Chorus package.


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## Noor77 (31 Jan 2010)

Nermal said:


> They could reside in the UK for a short period of time and then declare bankruptcy, which would also cover their Irish debt.


 
That is a completely daft suggestion.

I agree with the posters that have suggested that the OP's husband should consider giving up his job to mind the kids. Even if he only does it for a few years until their finances are more stable. It would save on childcare, travel costs for the husband getting to work, lunches in work etc... Also, with him being at home it might be easier to cut back on the grocery bill ... he would be able to meal plan etc...


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## ajapale (1 Feb 2010)

Noor77 said:


> That is a completely daft suggestion.



The suggestion can be discussed here : Bankrupcy Tourism (to the  UK): Is this a  realistic option for distressed RoI people?


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## Bronte (1 Feb 2010)

umop3p!sdn said:


> I would rather the six year credit blacklist, than try to pay this back. When will this house ever be sold for 495k? 6 years? 12 years? in our lifetime?
> 
> .


  This is a very valid question.

If OP can get a handle on her spending then she may be able to get out of the mess, but some people are unable to do this.  Certainly someone with so much debt all over the place and a judgement already on the house which is in negative equity doesn't give one much confidence.  This combined with a partner unlikely to find a full time job and 3 kids requiring childcare, sometimes it doesn't add up.

OP would need to be very dedicated to getting a handle on the debt and would need a lot of help, are Mabs good enough for this?  It can be done but it will take a lot of pain and effort.


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## Buddyg (1 Feb 2010)

This is the worst situation I have come across. I thought some people in haiti had it bad but no. This Irish family earning over 5k a month are far worse off.


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## UFC (1 Feb 2010)

Buddyg said:


> This is the worst situation I have come across. I thought some people in haiti had it bad but no. This Irish family earning over 5k a month are far worse off.


 
Hah I know you're being a smart This post will be deleted if not edited to remove bad language, but you're right to point out that a bit of perspective every now and then is a good thing.

I reckon if the OP can continue to hang on for another 12 - 18 months, her husband may have found alternative employment by then, and everything will be back on track.


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## deadlyduck (1 Feb 2010)

You've taken the first important step of facing up to your financial problem- well done. MABS generally seem to get positive reviews for the efforts they make in dealing with situations like this.
Some of the usual tips include:

*Shopping:*

Avoid using cards- deal strictly in cash. 
Check Aldi/Lidl/special offers at the major multiples.
Try avoid convenience stores. If you absolutely must use them, be ruthless in your spend- no unnecessaries!
Try preparing large quantities of rice based/ pasta based / stew type dishes that will last for a few days. Freeze unused quantities. Avoid takeaways/ convenience-ready made meals. Personally, I'd suggest cutting the fortnightly wine (maybe once a month) if things are so bad but I know you've got to live a little too 
For clothes/shoes- check the charity shops. You'd be surprised at the things you can pick up.

*Energy & utilities:*

Have you switched from ESB to other suppliers- some savings to be made.
Lower the thermostat/ switch off the lights/ wear an extra jumper to stay warm rather than turning up the heat. 
Where relevant/ feasible, run applicances at night rate (make sure that you have a night rate meter installed- I think the ESB will install for free)
Your phone bills are pretty high- check the packages available.
I'd strongly second the 'get rid of the TV package' advice and would add check the deals for internet access. 

*Other income:*

A previous poster suggested that your husband could do some childminding (tax free if under approx €15000 pa all in [with conditions]). Equally, fast food deliveries might be a possibility. Alternatively, could you rent a room in your (tax free up to approx €10000 pa)


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## Firefly (2 Feb 2010)

What are your husband's prospects of finding something similiar to the position he had before he was let go? Maybe this might just turn out to be a blip/bad year? If so I wouldn't make any drastic desicions (like walking away from your depbts) as the longterm reprocussions could be bad for your family.


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## DB74 (2 Feb 2010)

Buddyg said:


> This is the worst situation I have come across. I thought some people in haiti had it bad but no. This Irish family earning over 5k a month are far worse off.


 
Surely you can come up with a better response than kicking somebody when they are down.

Just because somebody earns more money than you doesn't mean that they don't have financial problems.


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