# Advice needed re finances please.



## emma09

First Income - 46K
Spouse - Currently Unemployed (was self employed) - No entitlement to soc. welfare! - Earned approx 3000 last year.. and expecting same this year. Roughly 1400 so far!!!

*Other Income*

Rental Prop 1 - 800 p/month
Rental Prop 2 - 1000 p/month

*Estimated Value of Investment Property*

Property 1 Value - 180000 - Mortgage - 260000
Property 2 Value - 210000 - Mortgage - 245000

*Residential Property*
Property Value - 250000 - Mortgage 370000

*Total Approx Negative Equity - 235000*

*Other borrowings*
Cr Card 1 - 20,000
Cr Card 2 - 9,000
Cr Card 3 - 9,000
Cr Union - 30,000

A lot of these loans to pay off mortgage / each other - spouse unemployed for almost 2 years - 

*Currently Paying*
Invest Prop 1 - 800 ea month ( arranged with bank)
Invest Prop 2 - 420 ea month ( tracker - interest only)
Residential - 1400 ea month ( trying to get them to interest only - should be appox 800 - still waiting to hear from them)

*Other loan Payments*
Cr Card 1 - 500 ea month
Cr Card 2 - 50 ( arranged with bank)
Cr Card 3 - MBNA paying minimum 20euros - as they won't agree on payment reduction plan
Cr Union - 1100 - ( trying to get them to reduce payment to 700 euros - still waiting )

Savings - NONE

Children - 2 under 10 years

Life / Health Insurance /home insurance
Approx 500-600 ea month

Approx expenses each month

*Food*300
*Petrol*200
*Kids/Leisure*200
*Misc*100
*School*100
*Utility*180including cable/internet/2 mobiles

NPPR 400 Each Year

*2 Cars* - 
2 Insurances - approx 900 each 
2 car tax - approx 300 each 

Need the car - No direct buses to my work. Spouse Gets work randomly for few days - usually needs to travel far. 1 baby and 1 child . school trips etc - not an option to sell cars - old .. wont get much out of them anyway!

I have asked 2 cr cards to be cancelled - 1 has agreed - still fighting with MBNA and they keep charging me interest/late fees/
Have been to MABS and they advised to make very small pymt to MBNA 10/20Euros - but they still keep on adding more interest .. !

What I want to know is -

If I do not make Full Payment towards my Investment Property - can they - will they take the property ? I am in 1 month arrears and because they have reduced payment of 800 for me for 3 months - they are telling me until I get back to "normal" payments - I will be in arrears for next 3 months? I had asked them to put me on Interest Only but my int. only period has expired? What will happen if I am in arrears for more than 12 months? 
I would sell the property - but like many others, mine is in negative equity? 

Only 1 investment property is in arrears. The other one is on good tracker rate so, dont want to mess that one up!

Currently living in 2bed apt - very small with young kids. Need to plan for future - Already bad credit rating because missed few cr card payments .. and now in mortgage arrears... Not sure if will ever be able to afford a bigger place ... 

Any ideas.. please... I am sure there is a way out..Currently spouse minding the kids - as creche costs nearly 2000 for kids! checked already - few different places


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## aristotle

Are you making or loosing money on the investment properties i.e. after tax etc does the money cover the mortgage payments?


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## emma09

Investment Property 1 Yearly Income - 800 * 12 = 9600 Euros

Expenses Per Annum
Approx 600 Estate Agent
          200 NPPR
Approx 1000  (2 Life Insurance )
          1000 Property management
Approx  200  Per annum maintenance (washing machine / boiler repair)
Total     2900 per annum
My normal mortgage is 1400 - currently on reduced - 800 per month - so in arrears at the moment.

Investment Property 2 Yearly Income - 1000 *12 = 12000
200 Estate Agent (renewal fees)
200 NPPR
1000 Life insrances
200  Maintenance - misc. expenses
Total 1600 per annum

Interest only tracker mortgage - so basically any extra left over is paying for the other property mortgage/maintenance
To date I havent paid any taxes - no money left over.  I have asked Accountant to do tax returns for last 2 years ( no idea how much its going to be!!.. dont even want to think about that at the moment.  I will pay when I have the money!)


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## aristotle

Have you talked to MABs?

I am not sure what the best direction is for you. Based on the income it looks like you have about 3k net a month but your outgoings are higher.

You have over 900k in debt with 235k in negative equity. I think you need some proper advice on your options as this will only get worse over time unless you can seriously increase total income.


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## emma09

Yes, I have been to MABS - and to be honest they havent adviced anything useful except to say to cut your credit cards!!

I only have 1 credit card which is maxed out at 20K - but I do not want to get rid of it.  As I said before, my credit rating is gone very bad in the last 3-4 months and I know for the next 5 years atleast - both of us wont be able to get any credit .  we have 2 young children and at times we have to use the card - (go over limit!) if we need to do some grocery / baby shopping!  

I am trying to get rid of Cunion loan - hopefully it will clear in 2 years time and we will get more cash in hand. 

I am concerned about the investment property.  I do not want to keep them.  I just wanted to know, if we made reduced payment for next 12months or longer - depending on our situation, can the banks re-possess that from us?  If yes, how will they recover the remaining amount from us?  Can they force us to sell our own residential home?  Even though it is in negative equity too!


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## aristotle

Its a long process for a property to get repossed, usually a year or two. If that happens the bank will eventually sell off the property and will register a judgement against you for the remaining loan (i.e. the difference between the sale price and remaining mortgage).

If you don't pay your residential mortgage then yes the bank can go the same route and try to reposses it. But again its a very long process and if you engage with the bank and agree some sort of payment plan it probably won't happen. If it went to court and you have been paying what you can no judge will throw you out onto the street.

Are the 3 mortgages with the same bank? What do they say?


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## emma09

I thought different rules with investment property.  I knew it would take longer to re-posses family home, but wasnt sure about investment property.  
1 property with KBC - the one with arrears
the other two - all payments up to date  with BOS

Both banks dont do any consolidation / top up loans.


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## Complainer

emma09 said:


> Yes, I have been to MABS - and to be honest they havent adviced anything useful except to say to cut your credit cards!!


I think it is a bit unreasonable to be expecting MABS to advise on how to manage property investments gone bad. You are running a small business here. MABS are there to advise you on your personal finances, but not there to support your investment approaches.


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## emma09

I wish I had a business mind - would have planned better!

In anycase, if you wish to call it a business, MABS are there to help self-employed people who have personal loans, over-draft facilities etc.  I dont think MABS was created to help people on PAYE system only!

I would prefer if anyone has any constructive opinion here.


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## aristotle

Complainer said:


> I think it is a bit unreasonable to be expecting MABS to advise on how to manage property investments gone bad. You are running a small business here. MABS are there to advise you on your personal finances, but not there to support your investment approaches.


 
Its not a small business, there is no company of any type here. This is individual and its about personal finances.


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## fobs

Your credit union payment per month seems very high. Was the loan for a much larger amount to beging with? I would think that the credit union would be somewhat helpful as they offer very low % loans in conjunction with mabs. Would they be willing to either reduce your payment ot incorporate some of the cc debt?

You probably need some serious financial help as at the moment you have 875,000 in mortgages and 68,000 in unserured debt on a modest income. Have any of the banks with whom you have the mortgages any solution for you?


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## emma09

Thanks aristotle.  

A thought just occured to me while I was reading someone else's post.  I got a "reminder" from Revenue to complete Self Assessment form for tax purposes.  does this mean that "rental income" is like having a "small business", like the other poster mentioned. 

If it is, even though, I have no company, is there any possibility of declaring bankruptcy - with that I mean, could I give up 2 investment properties? and clear my credit cards etc... 

They could not take my home as its in massive negative equity?   

I dont think it would be as easy as that.. but wouldn't it be wonderful, if I could start all over again!!  just wishful thinking on my part!


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## emma09

Fobs, just read your reply. 

yes, I agree my cr union payments are very high at present.  I have asked them to reduce to 700 each month.  My original loan was much higher.. around 50k.  It was to help out a family member - now family member not in a position to pay back as he is worse off financially than me!   So, around 15K still owed by family member, but could take 3-4 or longer to get back! 
If Cr Union accept lower payment and if I could have my residential mortgage on interest only that should give me enough space to sort my credit cards etc... .so, I am still waiting to hear back from them!


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## fobs

My credit union have always been very helpful if you show you have a good history with them so hopefully they will help you out.

Have you ever applied for a payment holiday on your mortgage? This might give you 6 months of payments to use to help reduce your other debt thus giving you some breathing space.


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## emma09

error


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## emma09

Payment holiday.. hmm.. never thought of that. I have never missed payment on my residential mortgage and 1 investment property both with BOS. 

I have sent in Income&Expenditure form to them looking for Interest Only mortgage on Residential Mortgage and waiting to see what they say... 

If I ask for payment holiday.. will they put my name in "bad records"? or "in arrears"?


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## NorfBank

_Life / Health Insurance /home insurance
Approx 500-600 ea month

_This seems a huge amount, €6000/€7000 per year. Can you break it down?


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## emma09

Actually it is.. never thought of the cost per annum... ok these are rough figures, I have at the moment with me.
3 Life Insurances 2854 Health Insurances1801 Home Insurance65totals530

I need 3 life insurances for 3 mortgages..   Health insurance very important.. as we have used it in the past and I would like the security of it with 2 young kids. 

1 home insurace... is for 1 rental property.. as we were advised to have it 2 years ago, when we first rented out.. so, we renewed it again, coz. again "just in case we need it"... 

Having said all that.. I have to say.. I never thought it costed us so much.. all payments go by Direct Debit different dates each month, and I am too busy thinking of having enough funds on each day that I never realised how much were we paying each year... 

I can see.. it needs serious looking into!!!!


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## coin

Take a hit and sell investment property 1. It can be hard to deal with NE but selling this would be a good option. Try and drop it to beat the market around the area with similar propertys. With the cash you can clear Credit card and Credit Union debts. Also have some emergency cash left behind and less exposure to property debt. Keep investment property 2 as there is a good tracker rate on it and your making profit. It will also give your spouse time to find a new job and less stress.


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## millieforbes

emma09 said:


> Actually it is.. never thought of the cost per annum... ok these are rough figures, I have at the moment with me.
> 3 Life Insurances 2854 Health Insurances1801 Home Insurance65totals530
> 
> I need 3 life insurances for 3 mortgages.. Health insurance very important.. as we have used it in the past and I would like the security of it with 2 young kids.
> 
> 1 home insurace... is for 1 rental property.. as we were advised to have it 2 years ago, when we first rented out.. so, we renewed it again, coz. again "just in case we need it"...
> 
> Having said all that.. I have to say.. I never thought it costed us so much.. all payments go by Direct Debit different dates each month, and I am too busy thinking of having enough funds on each day that I never realised how much were we paying each year...
> 
> I can see.. it needs serious looking into!!!!


 

something is wrong with the level of life insurance you have - there must be some element of payment protection in these policies, have you checked if you can claim against this? 


you already can't pay your mortgages - do you need to have these insurance policies in case you doubly can't pay them at some time in the future?


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## number7

coin said:


> Take a hit and sell investment property 1. It can be hard to deal with NE but selling this would be a good option. Try and drop it to beat the market around the area with similar propertys. With the cash you can clear Credit card and Credit Union debts. Also have some emergency cash left behind and less exposure to property debt. Keep investment property 2 as there is a good tracker rate on it and your making profit. It will also give your spouse time to find a new job and less stress.


 
What cash are you on about?

If you sell a house in NE there is the opposite of cash and most banks will not allow you to sell for less than what you owe unless you pay the difference.


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## emma09

Exactly.  If I could sell 1 property with high interest rate and in arrears - I should be fine as I am making enough money from my 2nd investment prop. for expenses etc. 

Just another thought - if I were to sell 1 property and add on the remaining negative equity on the 2nd investment, will BOS allow us to do that?


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## NorfBank

emma09 said:


> Actually it is.. never thought of the cost per annum... ok these are rough figures, I have at the moment with me.
> 3 Life Insurances 2854 Health Insurances1801 Home Insurance65totals530
> 
> I need 3 life insurances for 3 mortgages..   Health insurance very important.. as we have used it in the past and I would like the security of it with 2 young kids.
> 
> 1 home insurace... is for 1 rental property.. as we were advised to have it 2 years ago, when we first rented out.. so, we renewed it again, coz. again "just in case we need it"...
> 
> Having said all that.. I have to say.. I never thought it costed us so much.. all payments go by Direct Debit different dates each month, and I am too busy thinking of having enough funds on each day that I never realised how much were we paying each year...
> 
> I can see.. it needs serious looking into!!!!



Legally you just need basic mortgage protection on your home. You are not obliged to have any form of life insurance on the investment properties. 

On the health insurance you could save by changing your family policy to a corporate policy. See here

Home insurance - shop around, you may make savings.

Sorting these out could free up several thousand euros per year.


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## emma09

Thanks Norfolk.  We got our 3 life insurances from a broker and only got them changed last year as we got better rate.  
I thought we legally needed to have each one of them? 
In any case, I would rather keep the insurances - the way our luck is at the moment, one of us could get in trouble and all the dreams and plans we have for our babies.... anyway.. that's another days talk!!!


I suppose, my main worry is 1 investment property - I am not getting enough rent to pay off the mortgage.  Bank is refusing to put me on Interest Only - or reduced payment.  If it was only few thousand euros in negative equity -  I would have begged or borrowed from somewhere to finish that loan off.. it would make it so much easier to manage the rest of the finances. 

Its funny, that was the plan all along.  We were always interested in ONLY keeping our 1st home as investment as we had emotional ties with it... the 2nd property was only to help us get a "better bigger" place!  We were just too lazy / careless that we didnt do anything about it when we bought our residential home ..... we went away for few weeks .. and it seems there was a meltdown in economy in just couple of months really.....


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## Billo

"the way our luck is at the moment, one of us could get in trouble and all the dreams and plans we have for our babies.... "

What are the dreams and plans ?


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## emma09

In simple words.. dreams and plans that most parents have for their kids.. better future... we both come from "humble" backgrounds and worked very hard to try to achieve "good things" in life... wanting to give best to our kids... and give them good start in their lives, which both of us didn't have... this is not the place to go into details... its very upsetting for both of us.. but we still try to give as much as we can to our kids even if it means denying ourselves of simple pleasures... like going for a "night out"...


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## millieforbes

emma09 said:


> Thanks Norfolk. We got our 3 life insurances from a broker and only got them changed last year as we got better rate.
> I thought we legally needed to have each one of them?
> In any case, I would rather keep the insurances - the way our luck is at the moment, one of us could get in trouble and all the dreams and plans we have for our babies.... anyway.. that's another days talk!!!
> 
> 
> I suppose, my main worry is 1 investment property - I am not getting enough rent to pay off the mortgage.


 
Ok, sorry to harp on about this but I think you are paying about eur 2k too much in life insurance premiums that could go a reasonable amount towards making up the shortfall between the rent and the mortgage payments on the investment property. 

I don't think the life assurance policies you have to provide for your children if you die should be the same as the policies you have to cover non payment of your investment mortgages. This is not a question of doing away with the insurance and not being covered or leaving no safety net for your children, its about understanding the cover you have and making sure it does what you think it does.

do the policies definitely not pay out anything on the loss of your husband's job? when do they pay out? purely on serious illness or death? or are they some kind of endowment policies?


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## emma09

No, we wont get anything for my husband being out of work as when we changed, he was already unemployed, and I didnt include Income Protection for myself as it would have added another 50 euros to it.  At the moment my job is quite secure, even though have taken a pay-cut of approx 20%

I think I mentioned this earlier in the post - 

*Life Policies*
Approx 60euros each for 2 investment property - 
For residential its 160Euros 
*Total 220 Euros each month* 

*Health Insurance* - 
VHI for 3 - 120 + 70 Euros with Quinn for my husband  
*Total 190 Euros each month *

*Home Insurance*
1 Rental Property 
*Total 65 Euros*

*475 in total of all policies*

Not 500-600, as I originally mentioned but still quite a lot?


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## fizzelina

How come you only have Home Insurance for 1 property (and it seems high at €780 / year)? 
What happens with the other houses and the insurance on them, if you are in an apt do you have maintenance fees that cover the buildings insurance? Do you have your own contents insurance though? 
And even if the other houses are rented out you should have rebuild insurance and possibly contents insurance if your own goods / furniture are worth something in it.
I don't understand the Life Policies you have, we pay €30 for a couple but that just covers the mortgage. 
Can you not get something similar to cover the 3 mortgages and then 1 separate one for your lives if you want it for your kids, at the moment have you insured your lives 3 times?


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## emma09

1 home insurance - becuase its a home rented out - its to cover structural damage etc.. not contents

The other 2 are apartments so covered through block insurances and yes, we pay management fees.  Contents not too important to us for rental apartment.. only basic furniture / appliances.  Dont want to add another insurance cost to our residential apartment.. so no insurance for us. 

I am not sure how the life policies work?  I think its a case that if one of us were to get seriously ill, we will get money from 3 different policies?  I think.. so, the money can go towards paying mortgage. 

Whats the difference between mortgage only protection and life protection?


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## millieforbes

have a look at itsyourmoney.ie - they have explanations and comparisions of costs for differnt types of insurance.

If you're not smokers you might be able to get the cover your needs for 120 - 150 per month. rather than what you are paying which seems to be either 60 + 160 = 220 or 60* 2 + 160 = 280


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## emma09

Ok guys... help me out here.   Back to the Rental Property.  Just checked the figures. 
Mortgage outstanding 260K.  Can sell it for around 120K
Balance 140K
At the moment fully payment around 1400per month
Rent Only 800, so I need to add another 600 to make-up the payment. 

If I can approach bank and ask them to give me some incentive... something to work on to pay them back 140K?  If a payment plan for next 20 - 25 years to pay 140K with approx 600 instalments?

Do you think it will work?

I will save on Management fees each year / property tax each year.. save on insurance etc???
Any ideas / suggestions?


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## fizzelina

emma09 said:


> Ok guys... help me out here. Back to the Rental Property. Just checked the figures.
> Mortgage outstanding 260K. Can sell it for around 120K
> Balance 140K
> At the moment fully payment around 1400per month
> Rent Only 800, so I need to add another 600 to make-up the payment.
> 
> If I can approach bank and ask them to give me some incentive... something to work on to pay them back 140K? If a payment plan for next 20 - 25 years to pay 140K with approx 600 instalments?
> 
> Do you think it will work?
> 
> I will save on Management fees each year / property tax each year.. save on insurance etc???
> Any ideas / suggestions?


 
But if you propose to continue paying €600 a mth on the neg equity, same amount as you are paying now to meet the mortgage then are you not better off keeping the property and paying the mortgage, as at least at the end of that you will own the property and have an asset. 
I'm not sure how the above plan would benefit you? Except to save mgmt fees since the mgmt fee covers the building insurance, you don't have contents ins since it's rented out and property tax is only €200 a year. 
If you take the hit now of €140k negative equity it is quite a lot, holding on to the property might be the better option. That's just my initial view reading your above proposal.
Of course it assumes you will be able to keep it rented out, not knowing the location it's hard to give an opinion on that.


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## emma09

I know its very difficult decision. 

With my rough figures Per annum
1000 - Management Fees 
 200 - Property Tax
1000 - Revenue Tax ( havent paid them at all since renting it out 3 years   ago - my rough guess.. could be more!)
100  - Life Insurance
200 - Misc expenses / repairs /maintenance etc

In Total 2500 per annum for next 20 years = 50,000
If I go with current payment from my pocket of 600 euros for next 20 yrs its 144,000
So, in total 144,000 + 50,000
that's nearly 200,000. 

This is assuming interest rates won't rise for long period (which we know they will).  

Will I get 200K after 20years to cover all the cost?  and is it worth it to worry for next 20years about paying all these expenses... with revenue and Property management fees being the major expenses... when I already have so many other bills to pay?

I know its still 600 per month.. which is a lot.. ?  still confused?


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## emma09

any thoughts?


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## number7

I dont think €600 a month will pay €140,000 over 25 years, could be wrong but thought I read somewhere €530 per €100k. If my memory is right thats going to cost you €742 = €222,600.00. Thats at a mortgage rate.??

I would get a moratorium of 3 months on your 3 mortgages and put all three on interest only for a furter 6 to 9 months. The bank will not wish to comply with this but do it anyway. Remember to write to them outlining your plan.

Use this year to clear unsecured debt. At the end of the year, or earlier if possible, return your home to full repayment. Keep the rentals on interest only for the foreseeable future.

Hopefully during this time employment can be found for your husband that will increase your income enough to make some over payments, I would direct these to your home not your rentals.

Move to living debt free other than your property borrowings, stop thinking of your cc as your safety net and build up 2k savings as safety, that will allow you to get free of the cc trap for ever.

Good luck


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## emma09

Thanks for that.  If its going to cost me over 200K, I dont see the point in giving the keys back to the bank and still be in debt for next 20-25 years.   

Yes, I think, interest only is the solution. 
I have applied for interest only on residential mortgage and will try continue paying minimum 800 towards the investment property as interest only is still going to be over 1200 euros as I am on a high int. rate. 

I agree, if I could build up 2-3K savings and continue paying small amounts towards my cr card - it would make things so much easy if they were to STOP charging me interest and late fees.  MBNA are the worst !  I will try to clear at least 1 cr card in the next 12 months and lets see what happens from there.  

Another Question? 

I know both our credit rating is gone very bad.. in the last 6-8months - between not paying Cr Card on time plus 1 missed mortgage payment.  How long will it stay on our record?  I am still being optimistic and say if my husband finds some work ( he is thinking of going to UK) how likely are we to get credit again?  (NO - i dont mean more credit cards.. just bigger home.. as we are living in a tiny apartment at the outskirts of the city! and its quite hard with two lively children)

We never missed a payment or incurred late charges for anything before all this mess.  Always, had very good credit history and that's why ended with Cr Cards with high limits.... will it be taken into account that it was only a temporary "glitch" in our financial circumstances? 

Do you think our name will be back in "good books" again within 3-5 years?  It will be probably 3-5 years before we are able to completely finish off our unsecured debts anyway...


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## PaddyW

As far as I am aware, your bad credit rating will remain for five years, after any of the debts which you didn't pay on time, have been cleared in full.


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## number7

I wouldnt be overly worried about your credit rating as at the rate things are going there will be no one left in the country including the country that will have a decent credit rating.


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## emma09

Yes, credit rating is the last thing on my mind too... Somedays, I give up!

It causes a lot of strain on your relationship - lot of people dont realise how much all this stress takes out of you. 

It seems, I just about manage to sort out one problem.. and we get another letter looking for something else.  Now, we have probs. with our Tenants plus we got another letter to pay property managment or else.. COURTS!!

I keep on dreaming for Euromillions.. but never have enough money to play!


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## number7

Emma 
you must action a plan that allows you to live, call mabs and arrange a meeting as a matter of urgency.

Keep your chin up, getting a plan started will feel like you have won the lotto.


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## emma09

Just wondering are you all "keepin up appearances" in public?? 

I mean, when I come and read all these stories about people being in so much debt, I feel much better ( Sorry.. I know its sad!),   but when I go back to my "real" life.. it seems.. everyone is doing what they used to do.

I mean, everyone is still planning for summer holidays next year... weekends away, christmas shopping etc.. nothing seems to have changed apart from people talking about how they have had to change their shopping habits.. . going to Lidl or Aldi instead of Superquinn.. but it seems everyone is doing everything what they used to do... apart from me, who has had to cut down on holidays.. weekend nights out etc.. 
 !!  (


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## aristotle

I would imagine you probably have a standard "bell curve" here. 10-20% of people are seriously under pressure, 60-80% are affected but still have purchasing power, and the remaining 10% are "well off". 

Remember unemployment is 14% which means the vast majority are still earning. Yes salaries have come down but so too have costs and a lot of silly spending. 

Most have cut back on spending but not to the point where they don't spend anything.


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## wbbs

There is a lot of denial out there.  You stick to your plan, dont be ashamed to tell anyone you are cutting back, it is the sensible thing to do in this environment.


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## emma09

More advice needed, please. 

My husband has 2 options at this stage...he has almost given up on the 3rd Option - A job.  He is out of work for nearly 2 years now.  So, its either he goes to UK and look for work there (doesnt know anyone there!) or the other is to be self employed.  The business idea may/may not work.  But sitting at home is doing no good to him / to our relationship. 

We need to borrow.. yet more more money. around 25K.  What would you say - should we? Take a chance?  I know we are already under considerable debt .. approx 70K personal debt (not including 3 mortgages).  

The way he is looking at it is.. if we don't take a chance now... it may be never.  We are already minus 70K.. - we will be minus 95K/ 100K - 
But if the business kicks off..... we could be back to positive numbers in the next 1-2 years?

He really wants to go ahead with it.  I am not so sure.


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## wbbs

I am afraid there is probably no decision to be made regarding whether to borrow more or not, highly unlikely any lender would consider giving you more in present economy.


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## emma09

We dont  have much hope on getting money from the banks.  

We are trying to approach Credit Unions?

Also, I have heard of Local Partnerships (support offered by Dept of Social Welfare for long term unemployed?) - maybe they can give small loans.  Anyone heard of them?


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## fraggle

What is your husband doing to figure out issues like this?


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## aristotle

You are into a whole new ballgame now. Starting a business can be a big undertaking. You should read through other posts about starting businesses.

If you view starting a business and borrowing to do so as a "taking a chance" then its likely to end up with you owing a whole lot more money. You need to research your idea etc etc. There is no point starting a business just to get someone off the couch. There are consequences to failed businesses.


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## emma09

With "taking a chance" - I mean, you cannot gurantee it will work.  My husband has done a lot of research.  He is getting the premises on "rent only" basis.  But we still have "start-up" costs of approx 25K.   It is not a lot of money in business terms.  But for our situation, it is quite a lot of money. 

Sitting at home and doing the research and thinking will it / won't it... is not a good idea either, in my opinion. 

I have to laugh at MrsMuppett's idea of selling all the houses that are in Negative Equity and let the State pay the rent for me!!! Very original.   I dont want to start up the discussion on depending on State Help.  I prefer to help myself as much as I can.  I am not the first who has "over" spent and I am sure, I wont be the last.  I am looking for ideas to help me get out of this situation... not asking State to pay my Rent.


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## fraggle

I know he is probably desperate to do something.... but I know somebody who set up a business a while back... in my opinion without thinking too much about it... and now less than 2 years later is 50k in debt. Debt collectors were hasssling, partners not facing up to obligations etc. Various family member have stumped up the 50k to get the debt collectors to back off. 

In the absence of knowing what the business is it's hard to comment. Maybe I'm conservative but if I was in so much debt then I would not consider starting up a company.


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## missdaisy

I agree with fraggle. Can you tell us anything about the nature of the business your partner proposes to start? It would be a very difficult undertaking with the level of debt involved and the fact you need start up costs of €25,000 plus rent plus standard outgoings involved in running a business etc.


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## emma09

Startup cost of 25K includes 3months deposit and back-up for first few weeks e.g (staff pay / Stock etc...)


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## niceoneted

I reckon if he can get work in the Uk he should go there. Use the money he earns to get some of your CC debts cleared. So what if he doesn't know anyone there. Lots of people go there and work or to other countries for that matter. 
Get him to get his CV together and send it out to as many agencies and apply for jobs there. 
I don't think you will get the 25k from any lender and I think you would be foolish. It would want to be 100% guaranteed to make a profit from day one before you should consider it.


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## mercman

Emma, just to clarify a situation. and I do accept that you want the best for your kids. The three Life Assurance Policies are not required -- just one for your own place of Residence. Your broker is not doing you any great favours - he is raking in the commission. Maybe consider stopping the two in relation to the rental props and take out another for a smaller amount -- and do yourself a favour -- find a different broker.


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## millieforbes

Emma this is madness

does your husband have any experience of running a business other than the rental properties? has he any idea of what would be involved in actually running the business? any knowledge of accounting or even basic budgeting? I'm guessing not from the mess that is your personal finances

you need to stop panicng and clutching at straws. try to follow some of the advise here, but don't just rely on this annonymous website, spend some of your time reading educational sites like itsyourmoney and get to grips with basic concepts like insurance and you cna help yourself out of this mess rather than just flitting about from one crazy idea to the next


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## number7

What does "rent only" mean.

If you mean there is no key money, then I would respectfully suggest you stay away from business, no one is paying key money for vacant properties in this climate. The country is flooded with unoccupied retail premises, any landlord fortunate enough to get a tenant is busy giving rent free periods and reduced rent periods.


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## emma09

So, no one thinks its a good idea?  

Anyone?? 

i do understand where all the replies coming from.  I agree with most of them.  But you see, its very hard not to give it a "try"!!

number7 - we are getting the premises Rent Free for 3 months, and low rent plus No key money.  It seems good enough deal?  Our family is in business for several years - different business but the basics of most business are the same.   They are going to help with the accounting etc..
They dont have enough funds to support otherwise we wouldnt have to borrow money from banks / cr unions etc.  
They agree ... its a lot to take on but also appreciate that we are still young family and sitting at home is not good for both body and mind!


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## aristotle

You are asking "will this new business idea we have succeed"? No one can answer that without seeing a business plan and having the expertise and experience to give that opinion. It really doesnt matter than you are getting 3 months rent free.


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## emma09

Mrs. Muppett, I wish I had the pleasure of sitting at home!  I would then have the pleasure of getting rent from the state along with other benefits.  

I leave home @7am and dont see my kids all day as I am working full time!


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## aristotle

Do more research onto the business idea, there are pleny of threads on AAM to read through that should help. Best of luck, its great you are so determined to work through it. We need more people like you.


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## fraggle

You need somebody to sanity check your business plan, not the idea.


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## emma09

Aristotle, thanks, will have a look at business forums and do our figures once again to see if we can cut down on our start-up costs.  He is now thinking of getting half the funds from his family (approx 10k) and my family has agreed to give us 5K.  All this will have to be returned, but not in a rush, and with added bonus of NO INTEREST charged.  So, if we get help from his family, it will leave us with more manageble 10K loan.


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## Complainer

Is the money coming from family to be used to start the new business, or to reduce the outstanding debts? 
I think you'd be crazy to be borrowing more money to start the new business while carrying this huge debt. You won't borrow your way out of this problem.

He needs to get a job asap.


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## bluemac

I say go for it, be sure what you are doing and be sure he can do it! be sure you are willing to spend 16 hours a day 7 days a week for no pay for the first 6 months to 2 years to get it going. Your already in so much dept whats a bit extra? do not involve the family though do this yourself. He who dares win's, we need people looking to the future in this country not expecting the state to pay we need more employers and SME to pay tax to get the country out of this.. GO for it.. and good luck it will be very hard whatever the business.


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## emma09

bluemac... thanks.  Finally someone with more positive attitude!  As it is, he is not getting anything from soc. welfare - we are earning too much according to them.  So, even if dont get any money in our hand.... it wont make much difference to our current loans.  You'd think there will be support available for someone trying to get back at their feet.  We tried finding out - NOTHING... no help.  So, we'll have to go all alone.  Yes, I know its going to be tough - working 7 days a week not sure if it will "renew" our relationship or make it worse, but I do know, him sitting at home is not good.... Money is something that can be earned... sooner or later... more or less.  Relationships are hard to bring back to normality once broken. (


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## niceoneted

Do the family members who are willing to lend you money know the extend of your current debts? If not you must disclose this to them before taking the money.

I think if they were to still lend you the money you should use it to clear CC's 2 and as much of 3. 

I think the best thing is for your husband to go to the UK for work for a while to get some cash in. 
Also look at insurance for the car they seem high at 900 each. 
Utilities could take a trim too.


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## glasto

I'm reading this with my jaw on the floor. How can you think about borrowing more money off your family when you are already so far underwater? Setting up in business is always a risk, particularly in a recession, and with your previous financial record. You should be trying to pay down your debt, you are hugely over exposed to property too, rather than throwing more money on another gamble.


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## missdaisy

I would reconsider borrowing more money from your family to start up a business given your current circumstances.  It is too much of a gamble. And it's not a small amount of further borrowing, especially given the debt there already.


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## dereko1969

emma09 said:


> Relationships are hard to bring back to normality once broken. (


 
I would keep this point in mind when thinking of borrowing money from both your families.

Whilst it is great to have the get up and go to start a new business, doing so whilst in a lot of debt and getting into more debt (whatever the source) is not sensible.

Your husband really needs to try and get work in the UK and whilst searching, continue to work on refining the business plan. Have you been to the County Development Boards, there is assistance out there for people trying to start up their own companies.


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## glasto

emma09 said:


> I wish I had a business mind - would have planned better!



I just re-read the whole thread and this is the most important bit I reckon! And I can't believe you are being given advice saying' Ah sure, you're up to your neck in it, you might as well borrow more!'. Utter madness!


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## millieforbes

glasto said:


> I just re-read the whole thread and this is the most important bit I reckon! And I can't believe you are being given advice saying' Ah sure, you're up to your neck in it, you might as well borrow more!'. Utter madness!


 

+1

Complete insanity

also didn't OP mention at some point that they had been stung with borrowing on behalf of a fmaily member who now can't repay? this business idea is putting other members of the family in the same situation.

madness


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## giles

I know nobody likes to be told they're wrong but seriously Emma09 you and your husband have your heads buried in the sand. Money problems but a huge strain on relationships (as im sure you know). Getting into more debt is not the answer. Most new businesses fail in the first year plus with the resession alot of established companies have closed down.

Also if your working and your husband is running a business, what happens to the children?? Creche fees/child care are very high. Your already spending more that you earn. No business makes a profit in the first few months/year. Assuming its successful.

If you keep going the way you are you'll go bankrupt and lose everything.


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## missdaisy

Emma09 I know it is important to be optimistic but there is a difference between optimism and putting your head in the sand.  You need to listen to the advice you are asking for, whether or not it's advice you want to hear. The overwhelming advice is not to borrow further.


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## emma09

Hey Guys, thanks all for your advice.  We get the points you all are making. 

Going for business – not so good. 
Taking Loan – not so good. 

Going to UK – Good. 
Take a Job   - Good. 

Of course, we know that.  We understand what you are saying.  I suppose, I am to blame myself for “asking for advice”.  But you see, I was hoping to get some encouragement.  I do understand, don’t ask for advice if you are not going to take it. 

Well, we are “half taking” your advice.  In that, we are going to think about the business plan a lot more carefully.  Cut out as much extra expenses as possible.  We still haven’t made up our  mind.  We have another 2-3 weeks before we decide that.  In the meantime, my husband has applied for several jobs in the last couple of days in Ireland– and is going to do more job search for next few days and is keeping an open mind about the Business too.  We have discussed, coming into x-mas, people might be taking on more staff and even if its low-paid, it will be some money coming-in rather than going out.  If he gets a job… any job offer, he will take it.  If he doesn’t, well.. .. then we’ll see what happens. 

Just to clarify a point made by several posters.  I know we have accumulated a lot of loans. But you see, we had the financial power to pay them back.   The problem only occurred when one job was gone.  We knew what we were doing because we were making decisions on the basis of the incoming income.  The only thing we failed on was to have a “safety net”.  We didn’t think either one of us will lose a job.  Both of us had a good, reliable job and didn’t think it could happen to us!  

We are not INSANE and we are not STUPID.  We are optimist who love to spend money, live a good lifestyle.  We were little .. or a lot naïve before.  I think this economic climate has taught a lot of us the realities of life – life is not a bed of roses – it has thorns in it too!

But like I said above, we do take your point and are considering them very carefully and wont make a decision in a rush.  Thank you all for your input.


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## emma09

Update... just found today I am expecting another baby 

Thrilled!!!

Ofcourse, still worried about finances.   But those worries will have to wait.  

My husband has finally decided to put business plan on hold and is going to look for job only.  Its early yet, but I suggested, if he goes to UK for the job for a year or so, before the baby arrives it will help us financially.  Ofcourse, I would rather he be with me.  But I will survive.  

We live far from both families.  Its early days yet, but am thinking if my husband goes to UK, will have to find a place to be near the family and move near them to help with child minding and the baby arrival.  I know its months ahead, but too excited and too nervous at the same time.  Can't tell anyone yet!! Hence the post !!)

My sister-in-law is in college and is great with kids, maybe she can move in with us?  Not sure.. or maybe we can rent out our residential home (as we cant sell it) and rent out a bigger home near his family? or mine... dont mind me today.. I am just too nervous. 
O Please God.. I dont know, I hope everything works out for us!
I think I will play the Euromillions today ?? )


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## saintstephen

congratulations, your health is the main priority, I wish you the best of luck... we can share the euromillions


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## emma09

).  
Another update.  Didnt win the euromillions!! (
still happy though"


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## Neg Covenant

Borrowing on credit cards to pay mortgages is a disaster.   It looks like you may well be at the bottom of a hole with no way out.

Unless your husband gets a job you probably have no hope of paying these debts.

It may be time to consider one or both of you moving to the UK and seeing if you can avail of their personal insolvency laws.   At least that way you might have a fresh start in two years rather than in 12 years.   It probably depends on your job prospects over there.

Other than that, there may be new personal insolvency laws here in the next year which could help.   In the meantime, your husband and your marriage could well break-down under the stress.   If I were you my first priority would be to get my husband some work even if it involves uprooting children and losing face.   I would not look for €25K to sink into a business idea though.   €25K is a lot of money even if you are a millionaire.


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## canicemcavoy

glasto said:


> I just re-read the whole thread and this is the most important bit I reckon! And I can't believe you are being given advice saying' Ah sure, you're up to your neck in it, you might as well borrow more!'. Utter madness!


 
+1 

Currently businesses are failing at an alarming rates; the odds are that any business founded now will fail. Getting into more debt by founding a business when you're already hundreds of thousands in debt is up there with hoping one wins the lotto, as you simply won't have the capital to go for the long term.


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## Billo

"We are not INSANE and we are not STUPID. We are optimist who love to spend money, live a good lifestyle. "


That's great as long as it's your money you are spending. 
Do'nt borrow more, if you cannot repay it.


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## jambo

emma09 said:


> I have to laugh at MrsMuppett's idea of selling all the houses that are in Negative Equity and let the State pay the rent for me!!! Very original.   I dont want to start up the discussion on depending on State Help.  I prefer to help myself as much as I can.  I am not the first who has "over" spent and I am sure, I wont be the last.  I am looking for ideas to help me get out of this situation... not asking State to pay my Rent.


If it comes to it then I don't think there is any shame in defaulting. You would be in good company. Fair play to you for trying your best to resolve things but there comes a point when you have to put your hands up. This idea that we punish people for the rest of their lives for their mistakes helps no one. Much better to get you back on your feet and incentivised to contribute to productive growth in our economy. If you murdered someone you wouldn't get 25 years. Keep your chin up.


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## ipad

emma09 said:


> Update... just found today I am expecting another baby
> 
> Thrilled!!!
> 
> )


 
Flabbergasted as to why people barely keeping their heads above water would go and have more kids....


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## annR

Oh come on how would you know whether they were trying or not.  Sometimes these things happen I don't think it's anyone's place to judge that - it's the financial planning she has asked for advice on.  I think that her husband getting a job is a much better idea than starting up a new business.  I do think she is going to need some help from family with childcare and just with some company as well if husband is going to be gone.


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