# very worried-assets but no cash



## sillygirl (28 Sep 2009)

Hi

Heres our financial information
1.investment hse mtg 90k value Eur200k c&I mtg repay 710p/m not currently rented trying to get tenants
2.investment hse mtg 162k value 195k Interest only repay 720p/m rent Eur140p/w
3. investment hse mtg180k value 135k interest only repay 780p/m rent 120p/w
4. own house mtg 200k value Eur250k C&I repay 933 p/m 

very worried as our properties are all cross secured and afraid of losing our home. We have 2 credit cards maxed  balance of Eur6k and 7k as I've been using my credit cards for the shortfall in money every month
car loan BOI 23k repay eur717 p/m
friends first loan 15k repay 400 p/m---used for the stamp duy and  furniture of 1 of the IHL .
We got caught up with this whole property bubble, husband was in construction .
My salary is eur2400 p/m
Husband currently on job seekers 204 p/w but this will run out in 2 months
childrens allowance Eur800 approx p/m
creche is Eur150 p/w as she had started there before husband had lost his job and is settled there. 3 other kids are with my sister after school with no cost t.g.

any suggestions on what to do. the only property if we could sell would be the property valued at Eur195k with 90k mortgage.dont know what to do we were very foolish but what to do now is the question. Our family dont know about the other properties so cant even ask for help. 

thanks


Any suggestions on what we can do


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## sadie (28 Sep 2009)

Can you not sell these two at some profit (even if you break even they would not be a drain on your finances costing you money like they are now):
1.investment hse mtg 90k value Eur200k c&I mtg repay 710p/m not currently rented trying to get tenants
2.investment hse mtg 162k value 195k Interest only repay 720p/m rent Eur140p/w

Sell them. Tell the estate agent you need them sold whatever it takes.


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## Don_08 (28 Sep 2009)

sadie said:


> Can you not sell these two at some profit (even if you break even they would not be a drain on your finances costing you money like they are now):
> 1.investment hse mtg 90k value Eur200k c&I mtg repay 710p/m not currently rented trying to get tenants
> 2.investment hse mtg 162k value 195k Interest only repay 720p/m rent Eur140p/w
> 
> Sell them. Tell the estate agent you need them sold whatever it takes.


 

Seems pretty obvious that you need to put 1&2 on the market asap. Clear your loans/credit cards and put the rest against 3 to reduce your payments below the rent - just about.

Are you paying 5.2% interest on property 3? Seems high but unlikely you will get any other mortgage at this stage. TBH if you manage to clear enough on one and two and clear your debts - then I would sell 3 aswell and take the hit on negative equity.

Others may have other opinions.


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## missdaisy (28 Sep 2009)

I would agree with Sadie and look at putting those 2 houses on the market for sale. Until they are sold could you transfer your credit card balance to a new credit card with smaller percentage interest rate? As soon as either house is sold clear credit cards and cut them up. Firstly contact an auctioneer about possiblility of selling and what kind of price could be achieved and you will have a better idea where you stand.


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## WaterSprite (28 Sep 2009)

I'd also look at downgrading the car.  The car loan payments are v high - as much as one of the mortgages.


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## spursman (28 Sep 2009)

dear oh dear you are in a pickle

the car has to go pronto. sell for what u can get, pay off bank and buy a 1k fiesta

put all investment houses on the market and get what u can. put all this down to a bad mistake


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## Brendan Burgess (28 Sep 2009)

First of all - don't panic! You are very unlikely to lose your home. 

Are all the loans from the same bank? 

Have you told the bank the problem? The first thing to do is to sit down with the bank. They might convert the mortgages to interest only.

You might also get your other loans converted to interest only. 

You are overexposed to property. Sorry for stating the obvious. Put all 4 properties including your home on the market.  It is difficult to sell any property at the moment so if it happens to be your home which gets the best offer, sell it and move into one of your rental properties. I know that this is not your first choice. I suggested this to someone about 18 months ago and I told them that they could end up on the side of the road with no house if they did not sell their home. This now looks as if it is coming to pass. 

It seems to me that you just can't afford the creche. These are the types of tough choices which people have to make when they are in financial trouble. 

I think you should also consider telling your family or, at least, telling those who might be of help to you. By doing this, it will take the pressure off you. You will not be expected to buy expensive presents. 

I am not sure that downgrading the car is worth it. There is such a limited market for second hand cars. Unless it is costing you a lot to run. 

Brendan


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## Vinnie_cork (28 Sep 2009)

I agree with Brendan regarding the Creche. Does not make sense if your husband is about to mind the child to be paying €650 a month to a creche. 

That €650 could be spent much wiser. Kids adapt, removal from the creche and time spent with the parent doing fun activity's is not such a bad thing.


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## goingforgold (28 Sep 2009)

I think given how serious this situation is that you sould get yourself to MABS asap. You will get high prioirity. They will go to the banks with you and help you to put a plan together to deal with situation.

Is your husband looking hard to find work? Even if he got mimimum wage it would help a little. (Although I am aware that given you get 204 p/w and benefits like medical card etc that it's a fine line taking a mimimum wage job and staying on the dole). Has he applied for interest on mortgage to be paid by welfare. He should get something for that even though you are working.


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## chlipps (28 Sep 2009)

I suggest you try sell all 4 houses. If you sell either 1,2 or 4, then some cash will be released which you could use to pay off loans on others for few months

It will be difficult to sell houses that are rented...Would tenants in the rented properties be interested in purchasing? In this way, no delay, no staging issues etc.. Might be worth considering

Best of luck


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## cartman1 (28 Sep 2009)

Hi sillygirl,

If your valuations are to be believed then you are still in positive equity overall so things aren't that bad. I would agree with the idea that you should sell properties 1 and 2. Even if you only got 320k for the 2 of them in a fire sale, it would give you enough to approach the bank about selling property 3 at a loss and having enough to make up the mortgage shortfall. You may even have enough leftover to pay off the other debts and it would appear that your salary is enough to cover the mortgage.


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## Deb___ (28 Sep 2009)

As well as the good advice you already got, a couple of things come to mind

1) Your husband should apply for a FAS course. Urgently. Check www.fas.ie. He'll get a training allowance similar to his JB. 
2) Possibly cancel or cut the hours back in the crèche. It's madness paying 75% of your husband's J benefit on crèche fees. Children adapt very quickly. Of course if your husband does the FAS thing you'll need childcare. He might be entitled to a childcare allowance too. Would your sister mind the little one while hubby's training? Could she do it for less than 150?
3) ENSURE you transfer all your husband's tax credits to you asap if you haven't done so already. 
4) Was it earlier this year your husband was let go? If so apply for a tax refund. He will get back the tax he paid this year to date. It's Form p50 (at www.revenue.ie). 
5) Sell the car. Take the loss. Use the money to buy the cheapest car available and use the rest to pay off or reduce the highest-rate credit card.
6) Sell stuff on Ebay. Camera, camcorder, clothes, jewellary etc
7) Regarding tax again, request p21 balancing statements from Revenue for the last 4 years. Check them carefully and ensure you both got all your tax credits due.They'll refund you any overpayment going back to '05. PAYE allowances, bin charges, trade union subscription relief etc. Don't forget health expenses too (GP, prescriptions etc).

Why do you say you could only sell that one house? I'd put all 3 (if not 4) up for sale. At realistic prices. 

Good luck. It's little consolation I know, but you're not alone.


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## Bronte (29 Sep 2009)

How have you calculated the current property value?


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## paulpd (29 Sep 2009)

You also need to consider the fact that you could have THREE CGT liabilities if you were to sell the three investment properties. (I'm assuming that the houses cost circa what the outstanding loans on them are seeing as they're interest only loans)


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## Bronte (29 Sep 2009)

Deb___ said:


> We must all take personal responsibility too - of that there is no doubt - BUT don't try to tell me that the OP got into this crisis on her own.
> Personal responsibility, yes partly, but governmental responsibility - even more so.


 
I would have thought that anyone entering into debt would have a responsibility to themselves to do the sums and for it to make sense.  Just because the banks and government were not responsible does not mean that one abdicates one's personal responsibility.  I am a long term critic of the banks lending policies and the regulators's failures.  But still based on the OP's figures I fail to see how any person could have borrowed based on the figures posted.  It is beyond my belief system.


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## Deb___ (29 Sep 2009)

Bronte said:


> But still based on the OP's figures I fail to see how any person could have borrowed based on the figures posted.  It is beyond my belief system.



I agree. I really do. It was very unwise. No-one forced her to abdicate personal responsibility. But, don't try to tell me, that the celtic tiger seduction techniques were easy to ignore either. If you had a bit of spare cash in the bank at the time, it seemed everyone you were supposed to be able to trust (government, financial advisors, financial regulators) was telling you property was the way to go. We live in a society. We are all influenced by what those "in charge" tell us, that's how society works. It's easy now to be wise in hindsight. Now, most of us wouldn't trust those same people to feed our cats (unless you truly want that cat dead by the end of the day).

What's the point in even having a government so, if we're all supposed to know instinctively that we should ignore their advice, that we should know they'll screw us over? We deserve to be governed by ethical non-corrupt people. But we've come so far from that ideal that we can't even imagine such a thing.

We should have been able to trust our government representatives and we couldn't.


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## Kemo_Sabe (29 Sep 2009)

sillygirl said:


> Hi
> 
> Heres our financial information
> 1.investment hse mtg 90k value Eur200k c&I mtg repay 710p/m not currently rented trying to get tenants
> ...


 
Hi OP, you have calculated that you have about 100k of equity in the investment properties. Hopefully that is based on realistic market assessments. This would net to about 75k after tax. 

Your priority should be get rid of the nasty high-interest debt and to ensure that your PPR is secure.

Personally I am very bearish on future Irish property values and also rental income streams (obviously I don't wish to get into a debate on this) so I would flog all three and realise the 75k. Pay off your 50k debts with this money and keep the remaining 25k. Sell the car and get one that is more appropriate to your reduced financial circumstances. Then economise like crazy going forward (no spending on credit cards, no expensive luxuries) until your husband can get regular work again - at least the 25k will give you some cushion to get through this. 

Chin up, with only mortgage debt, one income and 25k in cash, you will actually be in much better shape to ride out this recession than many others. Good luck.


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## UptheDeise (29 Sep 2009)

sillygirl said:


> Robin banks
> ...my husband pretends to the kids he's still working.


 
Please tell me this aint so? You need to sit your kids down and tell them the truth. Believe me, they'll understand. When I was a young child my parents ran into serious financial difficulties and tried to shield us from it. We didn't understand why we had to go without somethings, why they reduced their spending and why they was a horrible sense of doom and gloom atmosphere in the home. It brought on a lot of anxiety. Children are very preceptive, come on your were a child yourself you must know this.

Just tell them that Daddy lost his job and like a lot of people through no fault of his own and that he's trying to get a new one, so there's going to be some changes made about the place. You don't have to go into all the nitty gritty details. Eventually your children are going to start asking questions and boy will you have to come up with some horrible lies.

So tell them as soon as possible.

All the best in the future. Don't worry you'll get through this.


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## Brendan Burgess (29 Sep 2009)

Folks

I have deleted 37 off topic replies to this thread and have had to issue a number of warnings. 

If someone makes un unhelpful, disruptive post, use the Report Post facility. Do not respond to them. You are only feeding the trolls. 

Brendan


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## kaplan (30 Sep 2009)

You need some solid advice from a debt counsellor. The good ones understand the psychological process most people need to work through when they are faced with dealing with distressed debt. It always takes time for people to realise they have a problem and then adjust to planning a way out. The key is to take control and not let others control your response.


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## Arch2 (30 Sep 2009)

I think not to panic is the most important thing.  You are where you are.

It will be hard to sell any property in the current market so best bet may be to approach the bank and see about having all on interest only for a period.  Put as much effort as is required into renting the unlet property.

Things will get better your husband will get work again and things will improve.


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