# account in arrears - can we ask bank to write off?



## joska (14 Nov 2013)

Sorry if this was asked before (I could not find any thread). 

Our (me+husband) mortgage account is in arrears (€8153.65). We have not been paying full repayments since January 2013 due to financial situation (bank was informed over the phone, every month that repayment won't be made in full) - husband unemployed on JSB, we were not entitled to FIS or any other supplement. My income at that time was 23k/annum (+€250 health insurance and travel ticket paid by employer). 

we are thinking if our arrears (or part of it) can be written off due to situation in the past? We have sent SFS to EBS in August showing our situation from the beginning of the year, we attached our monthly budgets+spendings etc. We have explained that we get into trouble because at the beginning of the year I was sick for the period of 4 week (almost) and were not getting paid by employer (due to probation period). Our situation was really bad at that time. 

our situation is much better now as: since September 1st my base salary increased to 26k (benefits stays this same). My husband found job in July (24k) and our situation gets much better. Since September we are able to meet our repayment in full (€950+€50 on top of that), creche fees are €180/week (we owe them €350). After paying bills, credit cards, mortgage and creche weekly shopping we are left with about €200.

We have received letter from EBS in September stating that our account is in arrears, we are in touch with them on the regular basis and we were advised that if our repayments will be made on time for the next 6 months they will capitalize our arrears (If I understood this correctly) - but I haven't received anything in writing. When I asked representative he advised that we will get papers after 6 months (what papers? how does it works?)

How to apply with the bank for write off? I don't believe that this will happen but I would like to give a try. I am not sure if we would like to sign up for Insolvency Act (I think we won't qualify even).


And another quick question: We are in touch with the Arrears Support Unit of EBS but I do not want to ask them before checking it properly. Anyway they seems to be in a bigger "mess" then we were as for example last week we have receive letter that they have tried to contact us several times with no success - I rang them straight away (very angry) as we have a record that we are talking to their representatives (and sent email after every call) for the last few months! 
When I asked them was told that this is standard procedure and I can even receive  letter saying that negotiator can be in touch with us, or any type of correspondence which is automatically generated and sent by the system. This "type of correspondence" will stop after period of 6 months of successful repayments. 

Can they sent letters to their customers in arrears which content is not updated? I thought that all customers in arrears are treated on individual basis?


Thanks
Joanna


----------



## Brendan Burgess (14 Nov 2013)

HI Joanna

You should complete the following to get more meaningful suggestions on your situation

Standard Format for unsustainable mortgage Case Studies

Brendan


----------



## joska (14 Nov 2013)

Thanks Brendan. I hope I got this right. 

Income details
Net (i.e. after tax) Income self: employed, permanent: €1750 (this include health insurance and travel expenses covered by employer)

Income history: was employed since 2006, full time, perm (24k). left voluntary in April 2012 (due to situation at work place). on Job seeker for 3 months until found new job in June 2012 - permanent, full time: 23k +health insurance and travel expenses. got promotion and from September 2014 base salary increase to 26k+health insurance and travel expenses (I pay only €30/month)

Please note that I was not paid for sick leave during probation period (from start Date in June 2012 until April 2013). Was on sick leave for week in December 2012 + over a week in February 2013 (paid €1200 only)

Net income partner/spouse: employed, full time, permanent (24k) + sole trader (no more than €150/month, sometimes nothing at the moment) - €1700/month

Income history: was employed since 2006 (public sector) on 29k, was made redundant (6k package) in Januray 2012. On Job seeker, then change to Short Term Enterprise Allowance and used redundancy money to invest in business. As income was not sufficient to make living, accepted job offer in January 2013 - 19k, permanent, full time. in June 2013 left volunatry as travel to work (from Dunboyne to Sandyford), petrol and parking costs him €350/month (!). Found new job week later - July 2013, permanent, full time 24k. 

Amount of child benefit received: €130

Amount of Mortgage Interest Supplement received we have been receiving €27/week payment for approx 3 months in 2012 while both unemployed.

Personal circumstances so we can calculate your reasonable living expenses 
The Insolvency Service has published Guidelines for reasonable living expenses based on the family size, whether or not you need a car for work, childcare costs and other exceptional circumstances. By filling in this information, we (or you ) can calculate what your reasonable monthly living expenses should be. 

Two adult family + child

Do you need a car for work or do you use public transport? both using public transport. Car is use for shopping mostly - petrol approx €100 month. My travel is €30/month, husbands €20/week

Number of children 0- 2 years old: 1

Monthly childcare costs: at the moment €180/week but as we owe crèche €385 we agreed that will be paying old rate of €200 until what we owe is fully paid (should be done by end of January). Family leaves abroad so we don't have anyone to look after our child so he do not need to go to crèche.

Monthly spend on special circumstances: e.g. exceptional healthcare costs
I have family health insurance (paid by employer, I pay tax on it only deducted from my gross) but can claim fees back once a quarter. Last month I had bronchitis and spent over €300 on GP visits and antibiotics (doctor didn't realise that I have bronchitis for first two visits, had to change doc to find out). My husband got sick from me - was on unpaid sick leave for two weeks. received basic social welfare payment. now my son is sick and we spent €80 already on GP visit and antibiotics. Another, control appointment on Saturday.



Home loan
Lender: EBS
Amount outstanding: 209,298.69
Value of home: not sure, avarage price of house in our area - €230k. not sure if this matter but we paid 20% deposit while applying for mortgage so we took 80%.

Interest rate:  VARIABLE RATE 
Monthly repayment: €940.35 (but we are trying to pay something extra every month as was agreed with EBS now, usually it's €50)
Amount in arrears: 8,153.65

Summary of discussions and agreements with the bank e.g.

we are not in any formal agreement at the moment. we sent Financial Statement in August 2013, and didn't receive any formal response - only that they have received it. 
In September 2013 we received first official letter that our account is in arrears, and have 12 month to find/discuss solution to our situation we contacted EBS and were advised that if we will meet repayments for the next 6 months our arrears will be capitalised. but haven't received any formal letter. EBS said that we don't as it's not an agreement and it's to see that we will be able to meet repayments and our debt won't be getting bigger.
Yesterday, EBS representative from Certus was in touch with us - but it was more likely quick chatty-chat to see if we are aware of what is going on and to see if we are co-operating with bank and are willing to cooperate. Was advised that we may be in touch with negotiator or someone to offer financial advise. But he was not able to give more details.


Credit Union: none. I have just opened an account but only for saving purposes.

Other loans and creditors:
Credit Card - AIB: €800 (mine), €60 
Credit Card - AIB: €2100 (husband), €50/month. blocked for using. no interest any-more. 
Credit Card - avant (husband): €1023, €100 month, blocked for using.

we want to get rid of all credit cards when these are repaid. 

Term loan Amount outstanding: 1,492
Term loan term left: 27 repayment of €52.27 left
Term loan - monthly repayment: €52.27 – affordable for us.
Term loan – fixed, 22.99% APR  

Family loan - none


Other savings and investments: none. Husband is registered sole trader and his income is no more than €150/month. sometimes nothing. But as business is getting better this money are in most cases used for investment in business. Sometimes we use it to cover family budget. With tight budget we will be able to save €50 from each salary + €30 from child benefit for our son (let's call it college fund).

Do you expect any lump sums in the medium term future? no.
tax refund? approx €550 but our car needs NCT + claims from health insurance - approx €300 but this I want to put aside as savings.

How important is retaining the family home to you? very important. it's our first family home and we will do everything to keep it.

Which of the following best describes your situation?

I really want to keep the family home even if it means having a large mortgage and negative equity for years to come.


Any other relevant information

What is your preferred realistic outcome? 
We know what we did wrong in the past, and not paying mortgage to pay other things is not a solution. we haven't been on holidays for last 3 years. not going out (only occasionally . Child benefit is spent only on our son needs (seasonal clothes etc). We also switch to prepay meters for electricity and gas to ave better view on utility bills. going for shopping once a week, having family (tight) budget and we will meet mortgage repayment for sure. We know that this is our MUST PAY every month.

We do not qualify for FIS, mortgage supplement etc. as far I am aware.

We would like to ask EBS to write off arrears (or some part of them) due to bad financial situation in the past this year.

Please let me know if you need any other info regarding our expenses, utility bills etc.

Thanks
Joanna


----------



## 44brendan (14 Nov 2013)

Hi Joska. I'm afraid that I got somewhat lost in the depths of the financial info provided by you. However, I do note that you are enquiring as to whether your bank would consider a write-off of a portion of your arrears. The short answer to this is no. The offer to capitalise the arrears is the best one currently available to you. Obviously is you approached the bank with a deal to take out the loan in full there may be some incentive for them to consider a discount, but not otherwise. I'm afraid your stuck with the full amount unless you can come up with a nice lump sum!!


----------



## joska (14 Nov 2013)

Hi Brendan,

Sorry, I am not good in written explanation - especially if it comes to banking  I can always try to explain better.



> Obviously is you approached the bank with a deal to take out the loan in full there may be some incentive for them to consider a discount, but not otherwise.



What do you mean by that? to offer them to re-pay all sum in arrears and then ask for some "discount" on that? hehe. it won't happen. we barely can manage to put small sum aside for emergencies (like last month, we saved €400 and spend all on doctors).  I don't want to borrow money from anybody as well. And until we are paying horrendous amount to creche every month, we are not able to save more.

Also I never wanted to apply for FIS or any other SW payments (other than JSB) as I know that there are people who are in worse situation, and second of all - we are not entitled to as far as I checked. We applied in the past for Mortgage Supplement and got only €27/week (while both unemployed). 

Thank you for your advise


----------



## Crea (16 Nov 2013)

Joanna - I think it's unlikely that the bank will write down your current arrears. It is more likely that they will agree with a lesser payment over a longer term. 

Based on the last budget your child will be entitled to a medical card.

I would advise to find out for definite if you qualify for FIS or medical card - you seem vague as to where you get the idea that you won't qualify. Citizens advice is very good to help out. Also, get to MABS - they will help with budgeting and advise on your current debt.


----------



## Bronte (18 Nov 2013)

joska said:


> Income
> 
> Net Income self: employed, permanent: €1750 (this include health insurance and travel expenses)
> Net income partner: employed, full time, permanent (24k) + sole trader (no more than €150/month, sometimes nothing at the moment) - €1700/month
> ...


 
You're all over the place with details. We just need your current situation, no need to go into details about being sick etc. What is your partners's actual income? You said your employer pays healthcard for you, does that mean your medical bills will be refunded? Also your employer pays for your travel, so it's not an expense for you?

For the credit cards, you mention 'blocked for using' what does this mean?

Is there any possibility you could rent out a room in the house and get extra income?

You should go back to social welfare/Mabs or citizen's advice and make sure that you are not missing out on either a medical card or FIS. 

The bank will not write off your arrears, what there are offering you is this: Pay them on time and correctly for the next 6 months and they will then relook at your file and will 'probably' capitalise the arrears. Basically the arrears get added back into the loan and you will take longer to repay the mortgage.

In relation to insolvency/bankruptcy etc.  Well you only have a few relatively minor debts but your house seems to be in equity.  Are you sure of the value of the house?


----------

