# Need Help with our Debt



## carly (27 Feb 2011)

*Age:
*34
*Spouse’s/Partner's age:*
35

*Annual gross income from employment or profession:*
E40,500
*Annual gross income spouse:*
E18,500

*Type of employment:*
Both private sector employees

*Expenditure pattern:spend more then we have*


*Rough estimate of value of home*
E380,000
*Mortgage on home*
E276,000 
*Mortgage provider:*
BOS
*Type of mortgage: Tracker, interest only, fixed rate*
Tracker 1% above the ECB

*Other borrowings – car loans/personal loans etc*
Credit Union- 18,000 (300e per month this should be 475 but they have allowed me to pay 300)
AIB Loan- 10,700 (260 per month)
Spouse AIB Loan 6,000 (54e per week)
Halifax CC 2345 ( i have a standing order of 95e permth since they closed in ireland)
MBNA-13,100 (try and pay 200 per month)

*Do you pay off your full credit card balance each month?*
no

*Savings and investments:*
2000 e credit union

*Do you have a pension scheme?*
Yes, frozen at the moment
*Do you own any investment or other property?*
no

*Ages of children:*
4 and 7

*Life insurance:*
Yes.

Ok as you see from above we have alot of debt but my biggest problem is the MBNA cc i seem to be getting nowhere with this debt.
I have not used this credit card in 18 months and have it ripped up.
All our laons are payed and managed but i ca nt seem to make progress with this cc.
I have applied for numerous loans to pay it off but i was declined.
I have rang mbna and they wont lower the interest until i ahve cleared the arrears

Any advise

Thank you


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## cl061969 (28 Feb 2011)

Hi, granted i emmigrated last year.  I had three loans in Ireland, each being paid off and meeting monthly payments.  I'm 40+ and had never missed a payment.  When the situation with the banks came in, I reviewed what I was doing.  I decided that the panic with paying back loans on time is simply psychological.  With the current situtation, you don't benefit at all with paying back your loans on time.  In fact, you may benefit if you pay them back at all.  If you're worried about being black listed, most people in the country are black listed at this stage.  In fact, it would be very difficult not to be black listed.  I decided not to worry so much.  When I wrote to AIB to tell them I couldn't pay back my credit card and asked them to freeze the interest, they wrote back to me and told me that if I paid euro 10 per month, that would be fine.  However, given that this left my balance as was, still accruing the usual horrendous interest and allowed them to make even more profit, I decided not to worry. I wrote to them, told that that I would attempt to pay back an amount which was 800 euro less then the balance owing, and anything that accrued in interest from that, they could write off.  Naturally, they didn't write back.  The problem with financials for people in your situation is that you feel that you have no control.  You have control.  The only real issue is the roof over your head, heat and food for your family.  Everything else can be paid off or held until you have a way of managing the debt.  Write to the financial institutions telling them that you are not in a position to repay at the same level and offer what you can.  Then find a book called "The Richest Man in Babylon", sit down, read it and do exactly what it says. Because it really works.  Creditors don't get upset. They just pretend to.  They have to give people a hard time, because if they didn't, everyone would default.  Really, is being black listed such a bad thing?  Take control of your situation and read that book.


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## Bronte (28 Feb 2011)

You need to go to Mabs, they will help you deal with all your creditors.  Have you anything you can sell to pay back some of the loans.  Can you do overtime or get an extra job to help?  You also need a spending diary to see where you can make cuts to sort out your overspending.  Though your overspending is probably due to the fact that so much of your income is spent on servicing debt.


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## alaskaonline (28 Feb 2011)

Joint income: 59k
Loans: 50145€
Repayments p.m.: 1071€ (without mortgage)

That's huge! I never understand how people with this type of income manage to borrow this much money without the banks interfering. Anyway this doesn't help your situation now so I just wonder, did you try to put the CC debt onto a "normal" bank loan? In other words merge the CC one with an existing loan which doesn't have a high CC interest fee attached to it?

Also as Bronte suggested, get a spending dairy to get a better overview of your overall financial situation and where cuts are maybe possible.


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## carly (28 Feb 2011)

Thanks for the replies i work full time as dose my spouse 
we really dont have anything we could sell and as i said i tried to get a loan for the cc
You see the repayments are ok and we are managing i just cant seem to make any progress on the cc
Hopefully when a couple of the loans are paid we will be able to put alot towards the cc
Imagine our loans and cc are 1071 thats alot of surplus we could do with


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## truthseeker (28 Feb 2011)

Youve got ~100k worth of equity in your home.
Sell the house, clear the loans, use the ~50k left over as a deposit on a new house.


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## carly (28 Feb 2011)

truthseeker said:


> Youve got ~100k worth of equity in your home.
> Sell the house, clear the loans, use the ~50k left over as a deposit on a new house.


 
there is no way we will sell our house its our home and we love it never had issues with our mortgage so selling the house is not an option ever


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## truthseeker (28 Feb 2011)

carly said:


> there is no way we will sell our house its our home and we love it never had issues with our mortgage so selling the house is not an option ever


 
I dont understand this. You have the option of a completely clean slate and restart without debt right now. Or you can struggle for the next 6 or so years, crippled with debt, and you prefer to do that. How are you going to not borrow going forward? Its clear by the amount of debt you have that there are money management issues. As your children get older they will need more money for things as well. What if there are emergency expenses like car problems, health problems that need an injection of a good few quid? I just dont see the position of servicing the debt for the next number of years as anything other than a massive struggle. Then if you do end up borrowing for bits and pieces you end up with a longer struggle, and so it goes.

Or - you can clear it all, and start again with only a mortgage.


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## Bronte (28 Feb 2011)

carly said:


> You see the repayments are ok and we are managing i just cant seem to make any progress on the cc


 
You are not managing.  And ECB rates are forecast to go up by 2%.  Could you ask the bank for a payment break on the mortgage to help you pay down your other debts.  Only do this if you don't lose your tracker.

What is the monthly interest on the credit card?  It looks like your repayments are only interest so naturally you are not making any headway with the debt.  With Mabs you may be able to negotiate on the interest that has been applied.


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## niceoneted (28 Feb 2011)

Carly you need to write to MBNA immediately and explain your situation. Point out to them that you have not used the card in 18 months and ask them to freeze the balance on this basis and on the basis that you make a commitment to pay a certain amount each month and stick to it. 

I find it also helpful to have exact take home pay listed and other costs utilities as then some people can help point out where cut backs can be made that you cannot see yourself.  

What are the repayments on the mortgage - interest and capital - may be worth looking to go interest only for 12 months to get CC cleared as a priority.


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