# wife laid off, money troubles:(



## Cashless1 (31 Oct 2007)

Age: 35
   Spouse’s/Partner's age: 33

   Annual gross income from employment or profession: 38,000
   Annual gross income spouse: 21,000

   Type of employment: me, store manager. her, former hr, now a pa

Expenditure pattern: In general are you spending more than you earn or are you saving? spend more

   Rough estimate of value of home: 400,000 maybe
   Mortgage on home: 400,000
   Mortgage provider: bank of scotland
   Type of mortgage: Tracker, interest only, fixed rate: 35 year variable
   Interest rate:5.1%

   Other borrowings – car loans/personal loans etc
two car loans worth 31,000 together, both half paid
credit union loan of 20,000, hardly paid
credit cards limit is a couple of thousands

   Do you pay off your full credit card balance each month? no
   If not, what is the balance on your credit card? 8000 altogether

   Savings and investments: none 

   Do you have a pension scheme? no

   Do you own any investment or other property? no

   Ages of children: 7 and 2

   Life insurance: no

---

sick with worry at the moment. wife was laid off recently from her job as a hr manager, had to take a big salary drop because she couldnt find any relevent work. shes still looking so im hoping she can get something better. meanwhile weve got so much debt were struggling to pay back that all of my wifes redundancy is gone just servicng bills. also, we just came off our discount mortgage rate, combined with the interest rate increases, were really been hit with repayments. we have already missed two of our mortgage repayments and the bank is sending out threatening letters. were also getting letters from the creditcard companies looking for money. ive tried to tell them we cant pay them all back but theyre saying theres nothing they can do.

should we get a topup loan to consolidate all the payments together?if we miss mortage payments, can we even get one? can the bank take our house? please help!


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## sam h (1 Nov 2007)

Cashless...should be asleep. but could see it's your first post & the real experts are probably in bed !!  You are probably waiting for some reply.

Main thing that spring to mind is  MABS: they can help with your debt. Will deal with banks, CC's etc.  DON'T ignore the letters.   Your debts are very high and you will definately need to rein them all in. Deal with this ASAP.....and good luck


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## pinkyBear (1 Nov 2007)

Hi Cashless,
Would you think of selling a car - or possibly downgrading a the cars and any money left can be used to clear can be made to the bank and CC - for the moment if you can manage it try and pay the minimum off the CC at least that would keep them happy for a while.
Hopefully this will be temporary as your wife will hopefully get something more suitable pay wise. 

Above poster is correct contact MABS immediatly.


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## funnymunny (1 Nov 2007)

MABS is definitely the way to go.  In the meantime though, as the previous poster said, don't ignore the letters.  Ring your bank and credit card...but don't ring their customer service desk, ring their credit control dept.  These people are trained to deal with your circumstances and you should find them sympathetic to your plight.  The banks are always happy once you make an approach to them and offer to pay some amount per month, but if you do agree an amount, it will have to be realistic and you will have to keep it up. 
It is a very worrying time, but once you approach these people and come to some arrangement it will really take the worry off your shoulders.  Try to deal with it immediately. 
Best of luck with it.


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## funnymunny (1 Nov 2007)

Oh and one other thing, MABs is alway suggested, but many people don't contact them out of a perceived sense of shame or embarassment.  There is nothing to be ashamed of, there are thousands of people in your situtation (I have my own debt troubles which are coming around slowly but surely) and in the last 5 years MABS are seeing more and more working couples, who are in debt due to large mortgages and the general high cost of living, so don't delay and give them a ring.


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## ClubMan (1 Nov 2007)

If you are already on a _LTV (Loan To Value) _ratio of 100% (i.e. mortgage is €400K and value of the property is €400K) then the chances of getting a topup to consolidate other loans would be slim to none as far as I know. You certainly need to stop spending more than you take in now to avoid exacerbating the debt situation. As mentioned above you should not ignore letters from the lenders and you should certainly consider contacting _MABS _for assistance.


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## barryl (1 Nov 2007)

you need to get rid of the  high car loans,you cant afford them.sell both and pay back the bank,use public transport/bike/ walk  ontill you find your feet,try not to go behind in your mortgage,you are not in a position to consolidate your loans as you have no equity in your home,ring and ask the bank for any relief,some banks offer a break in payments etc.if this is poss.use this time to pay off your cc     best of luck


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## aaa1 (1 Nov 2007)

A mortgage interest rate of 5.1pc seems very high if it's interest only - any chance of haggling with them to get it a bit lower? Unfortunately if you've missed a few repayments you won't be able to switch to a different bank because they'll be put off by your missing payments


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## Eoin28 (1 Nov 2007)

Hi Cashless,

I have just been running over the figures:

I would also suggest you sell both cars and clear the car loans - They must be costing you 1000 per month??

I take it your spouse now has an income of 21k?? 

Your Income 38,000    Net Monthly Income 2533.34 
Spouse        21,000    Net Monthly Income 1662.50

Total Net monthly 4193.84

400k mortgage - interest only repayments @5.1% 1700 per month
                                                             TRS  266  per month
                                                  Repayment  1434  per month


CU loan 20,000 - don’t know what the interest rate is. However, I will take the repayment to be approx. 500pm


Total Repayments 1,934


I would suggest you approach your bank, explain your situation. The bank will be happy that you approached them before you ran into arrears. Ask the bank for a payment break on your mortgage to allow you deal with short term debt. This may be difficult as you have zero equity in your property. The bank may take a sympathic view in light of your situation.

If the bank grants you the payment break. Concentrate on clearing your credit card over that period. Repay as much of your short term debt within this period. You should have the CC repaid within 6 months.

At the end of the 6 months your spouse may have found a new position. You will have your CC repaid. Car loans gone.. &  will only have your mortgage repayment & CU loan to service. 



Even if your income remains the same (38k & 21) 1900 per month should me manageable in the short term. Your debt service ratio would be 47%.
 Best of luck.


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## moneygrower (1 Nov 2007)

it's asking a bit much to use public transport when you have two kids, why not sell the cars and buy a banger? I have an old reliable five door, it does the job and no car loan.


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## MOB (2 Nov 2007)

Is the €21k for a full time pa position? It seems very much on the low side for an experienced employee. Unless her confidence has taken such a battering that she is in no shape to do so, I would be encouraging your wife to look for a better paying job immediately.

As already suggested, sell both cars and buy an old one for no more than €1500.

Pay off the credit cards with the surplus from the car sales.

Go through every single item of expenditure and cut down all unnecessary ones; Get rid of cable or satellite tv if you have it; 

Get rid of mobile phones (it is perfectly possible to live without them for a few months) or switch to pay as you go and limit yourself to €10 every two weeks;

The interest alone on your mortgage makes your present situation virtually untenable;  If you or your wife cannot get better paid jobs, you may have to sell and rent.  Better that you sell (even at a loss) than that the bank sell;  If they sell, it will cost anything from €5k-20k more.

Consider looking for part time evening or weekend work.



Stock up on cheap food from Lidl or Aldi and stop going to the local convenience store;   If you have been in the habit of eating ready meals and chinese takeaways, ditch the habit for a few months.   This won't save all that much but there are two reasons for doing it.  First, every little helps; Second, your situation is very close to the edge - you need to give yourself the ability to say that you are doing everything possible to get control of your finances.

Forget about membership renewals and such like for this year.

Whatever child minding arrangements you have, consider getting something cheaper for a while.  Although you are too old to be asking either of your parents for financial help (unless they are rotten with money and willing to give it) they (or indeed siblings) may be willing and able to give some practical help, like school collections or childminding, especially if it is made clear that it is a temporary arrangement.  

You probably need to let your close friends and your families know that you are in a financial squeeze; not to tap them for money but so that you will not feel pressurised to go on that night out with the lads, or buy tickets for the various annual events which tend to cluster around this time of year, or put €200 toward your cousin's wedding present or whatever.  Your support network is of use to you in a lot of practical ways - but they can't support you if they don't know that you have a problem.

If you have a lot of stuff that you don't particularly need, consider putting it all on Ebay.


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## ClubMan (2 Nov 2007)

And with _Xmas _coming up you may need to bite the bullet on this front too and economise.


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## moneygrower (2 Nov 2007)

mob is all that not a bit extreme? Some of it makes lots of sense, like shopping in lidl, (the coffee is great) but isn't some of it like telling an overeater to drop the doughnuts and live off cabbage soup? These folks will not be able to afford to go out much so surely they should keep the ntl and have a bit of telly to watch? And childminding is not something to take lightly and fling the little ones to whoever will put up with them for a few hours!


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## z109 (2 Nov 2007)

moneygrower said:


> mob is all that not a bit extreme? Some of it makes lots of sense, like shopping in lidl, (the coffee is great) but isn't some of it like telling an overeater to drop the doughnuts and live off cabbage soup? These folks will not be able to afford to go out much so surely they should keep the ntl and have a bit of telly to watch? And childminding is not something to take lightly and fling the little ones to whoever will put up with them for a few hours!


Moneygrower, they owe €43,500 in addition to their mortgage debt.
They are paying interest only on their mortgage.
They have no savings and no pensions.

IMO they are in a very difficult place and unless they take hold of their spending by the scruff of the neck they will go bust. 

The advice to spend nothing until the short-term debt is paid off is the best advice they can be given at the moment. Anything else is kidding them.

A few months of living on spuds and cabbage, reading books from the library and listening to the radio for entertainment has never killed anyone. IMO it is a lot more relaxing than vegetating in front of the box.


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## ClubMan (2 Nov 2007)

moneygrower said:


> mob is all that not a bit extreme?


Extreme debt/financial problems may require extreme measures to sort out. I don't disagree with anything that _MOB _posted.


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## comanche (2 Nov 2007)

I think that there is a lot of good advise here. But I think that the problem might look un-approachable (if thats the right word!) unless you break it down into tasks/goals. So set yourself goals, priortise most expensive debts. Get a plan and stick to it otherwise the problem will look too big. Good luck.


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## Mpsox (2 Nov 2007)

*Re: wife laid off, money troubles:*

Maybe it's time to be mopre radical here

you are almost €500k in debt, 35 years old with a 35 year mortgage that you probably won't have paid off before you retire. 

No offence meant but your job is not paying great money so perhaps you should considre moving.Don't know where you live, (although I assume it is in the Greater Dublin area) but is there anything like family tying you to there.

I have lived in Kildare for the last few years, moving to Carlow and will reduce my mrotge from €350k to €185k. You sholuld pick up a similer house down the country for €100k less at least and you should be able to reasonably replicate your salary

If it is not working out for you now, maybe it is time to be radical

good luck


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## ClubMan (2 Nov 2007)

Part of the problem here is that the c. zero or negative equity on the house plus the existing debts may leave the original poster with no room to manoeuvre in terms of trading down/moving etc.!


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## Marie (3 Nov 2007)

Ummmm!  The O.P. is in deep dooh and having sleepless nights appropriate to an untenable situation.  'Hoping' his spouse will get a better-paid job soon or relying on negotiating deferring debts just puts off the evil hour rather than dealing with the issues.  My fear is that the projected value of the house - 400K - might be optimistic in a market where values have dropped 3.5% since the beginning of 2007.  Economising a 'little bit here, a little bit there' and feeling trapped and unhappy isn't going to ease the social and emotional cost of the situation.

Advice from the experts (MABS) is an important step.  

The facts are clear.  The crux of this might be to explore the obstacles to selling the unaffordable house in response to the changed financial circumstances and buying - or renting renting - within budget?


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## jprender (3 Nov 2007)

For what it is worth, with the limited information here is what I would do myself.

1.   Sell both cars and get say 30k

Use this 30k to pay off the car Loans     16k
                               the credit cards    8k
                               mort arrears 3k   (assuming 2 months)

This leaves 3k to buy one or maybe two cars if absolutely needed.


2.    With this all done, your monthly situation should be something like this 

       Income from two Salaries      4500    (roughly)
       Childrens Allowance               360
                                              ------
       TOTAL INCOME                   4860

       Pay mortgage                    -1435    (net of TRS)
                                            --------
       Remaining                           3425
                                            ======

       From this you must pay for the Credit union Loan of 20,000,
       and what is remaining is your disposable income.   Obviously you will have to pay all utility bills, food, petrol etc out of this.

       These calcs do not take into account the payment of the early childcare supplement of 1000 per year for your 2 year old either.


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## losttheplot (3 Nov 2007)

Would it be possible to transfer your credit card balance to another card and avail of the interest free period that they offer on existing balances, Halifax offer 0% APR on balance transfers and purchases for the first 6 months and you'll find others have similar offers. Not a long term solution but it may buy you some time and give you some space.

If possible, as suggested, if you could survive with one car that would help also.

Hope it works out for you.


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## Bob_tg (3 Nov 2007)

Ideas I don't see covered already:
- consider taking in a student/lodger
- review in full your tax situation and/or see a tax adviser; reclaim any monies due (bins; covenants; interest on home improvements etc.)
-  avail of vouchers for shopping - spend time sourcing bargains
- go to the €2 shop: some amazing deals
- move out of your house, and rent it out & rent somewhere else which would be less than your rental income nett of any taxes (this obviously would not be a desirable choice given a family situation, but I have listed it for the purposes of the exercise).  Additionally, moving house may reduce the need for the car(s)
- if you won't sell your car(s), ensure you fill up from the cheapest gargage near you and limit yourself to only necessary journeys (as per a previous post,  I agree - you seriously need to look at this).  Do not be tempted to buy anything from any convenience store/service station.


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## purplealien (3 Nov 2007)

Hi - Feel Really Very Sorry For You As I Am Not Far Off Your Situation Myself. I Have Started Selling Stuff On Ebay - One Mans Junk Etc...clothes That Your Toddler Has Outgrown, Books, Cds, Dvds, Etc. - Shop In Lidl, Downsize Car - I Find Myself Free Wheeling Down Hills Juat To Save A Bit On Petrol Things Have Gotten So Bad - Dont Even Know If This Works!! The Two Euro Shops Are Great For Cheap Toys Coming Up To Xmas.both Of Ye Should Be Bringing Packed Lunches To Work Also. Cut Off Sky - It's Not As If You Have To Listen To The Radio - There Are The Ol Familiar Channels Like Rte 1, Network 2 Nad Tv3 To Watch. First Thing Should Be To Sell Cars And Buy Two Bangars - Embarrassing I Know But It Would Be Even More Embarrassing If Your House Ws Repossessed!!
Can You Ask For A Pay Rise??


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## purplealien (4 Nov 2007)

sorry clubman


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## Cashless1 (5 Nov 2007)

sam h said:


> Main thing that spring to mind is MABS: they can help with your debt. Will deal with banks, CC's etc. DON'T ignore the letters. Your debts are very high and you will definately need to rein them all in. Deal with this ASAP.....and good luck


called them, they said try and come ti an agreement with the banks and said start economising. not very helpful when ur already living in near poverty


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## Cashless1 (5 Nov 2007)

eoin, your nearly right with your figures.

currently we take home about €4k a month combined after tax.
the mortgage isnearly €1.7k a month, takin g into account interest rate relief. its a variable not interest only by the way.
€600pm on creche fees for the baby
car+cu loans are costing €1200
cost of keeping two kids and petrol is killing us right now

currently lving near clane so public transport isnt a realistic option. we both need to drive to work as im nealy 1hr away and shes cant get to hers by public transport. decided were going to put the expensive car in the paper which will hopefully make abig dent into repayment even if we get a banger.

weve already cut the sky tv, cancelled holiday plans and are cutting down bigtime on grocery spending. theres always one payment we have to skip every month tho.

i cant get extra work as i already am spending over 60 hrs a week either driving to or working. do a little overtime when i can but its only an extra little bit. wife is stll hammering everywhere with cvs.

have a meet with the bank on thursday to discuss resettling payments, is there anything i shud do before this?


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## moneygrower (5 Nov 2007)

cashless it sounds like you should try another mabs office, they brushed you off you might get someone more helpful if you try again.


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## brodiebabe (5 Nov 2007)

Could you get an au pair to mind the children?  Would it be cheaper than your current childcare arrangement?


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## sam h (6 Nov 2007)

I wish you all the best with the bank.  In fairness, they will appriciate that you have realised the size of the problem and the fact you have cut back/off the unnecessary expenses.  The worst situation would be if you had your head in the sand !

Bring in all your figures (now is not the time to be hiding things), show details of all your other loans and have some sort of plan or idea of how you might sort it all out (eg- could they let you go interest only while you pay off CC & sell the car?), bring in proof of cancelling hols, sky etc (to show how serious you are about sorting this out).  You need to convince them that you are still a resonable risk.  

I'm dissapointed that you got such a lack of help from MABS as I had heard they were very helpful, as another poster said it might be worth trying another office.

Good luck


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## Brianne (6 Nov 2007)

So sorry to hear about your difficulties and delighted that you are getting rid of expensive car.As the owner of an old car as I am you will have a lot more peace of mind. Now this is just a thought. Is it actually at the moment worth  your while for the two of you to work? Is your wife on a lot less or more than you? It is possible to earn 10,000 euros a year with no tax liability by minding other children in the home to the best of my knowledge.She could claim the stay at home allowance and save on the creche fees. It might be worth getting someone to look at the figures. Maybe it is something that might be worth considering if you find that the cost of a second car, creche and other work costs are very high. Just a thought.Best of luck


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## SarahMc (6 Nov 2007)

That was my first thought too Brainne.  With a low income and 2 children to pay childcare for, it cannot be worthwhile working when there is a 15,000 tax exemption and home carer's retention for childminders.


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## sadie (7 Nov 2007)

As I understand it the second low income is only the wife's current job (21k) that she presumably got as a short term fix having being made redundant, as a HR manager she has the potential to earn much more than this once she finds the right job, and that potentially will solve it for them in the long term.


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## Guest127 (12 Nov 2007)

Some good advice already. If living in Dublin it might make sense to move to a rural area. Around here anyway you would get a fairly good 4 bedroom house for around €300,000. Communte to Dublin city centre is very handy with at least 30 busses daily (max 1.5 hours and sometimes less) and also a train service( but the train is much more expensive) . cheapest is probably private coach firm €40 return weekly and you can avail of that tax rebate on a yearly ticket. Sell at least one car and pay off the other one with the proceeds ( alternatively sell both and buy a decent 2nd hand one big enough for your family as you will definitely need a car some of the time anyway) If you are already living in a rural area then downsize from the €400,000 house until you have your finances in order. It won't be easy but then sleepless nights are not easy either. Hope all works out for you.


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## z104 (14 Nov 2007)

Take a deep breath and try not to worry. 
If possible sell the cars and buy a cheaper car or cars with low engine size. You can pick up a very good 00 reg car for 2k. Now is not the time to be keeping up with the joneses. Buy the kids Christmas presents on the cheap. Most kids play with them for a few hours and chuck them onto their pile of other expensive toys once they're bored with them anyway.

Shop in aldi/lidl. Very good value. Irish stores dunnes/tesco are about 25% more expensive. Make sure you pay the minimum payments due on credit cards/bank loans. Don't buy takeaways. Cook pasta dishes/potato dishes. A 10kg bag of potatoes in aldi costs 6 euro. This will last a family at least a week.Do not go out socialising for a few months.Tell your family that you cannot afford presents this year. They will understand if they're decent people. Do not rent DVD's. Get the basic package on your tv subscription. Cancel anything other than the basic package.Cut your costs to the bone. You should not be paying more than 10% on your credit card. Swao over to Halifax for 0%. Stop using the credit card. Use laser only. Ask eyour wife to actively look for anoter Job. 21k is too little for her experience.
If you cut costs you will work your way out of it.


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