€10k Irish Debt - Live in UK - Intend to Pay

[RonaOha]

- I have a loan with just over €2,600 outstanding paying approx €80 a month. I can make these payments and have done so. (AIB)
- I also have an overdraft of €2,750 which is constantly up to the red (AIB)
- I have a credit card with a limit of €5,000 which is a few hundred short of the limit. (AIB)

In 2016 I had a tough break up with my ex. I previously took a loan out from the bank and raised my credit card to help finance move to a new place (renting and to furnish) her folks had issues and her mother was involved in serious issues with my exs stepfather beating family members up so I lent the family €2,500 to assist with issues they badly needed. Yes it was stupid, I realise that.

A few months later my ex left me but I was entered into a lease at €1,450 + bills a month which had only recently been renewed, I had no choice but to continue this even though I really could not afford to pay this and the bills myself, because of the lease commitment and the fact all bills were jointly in our name which ate away at my savings, but with cut-backs on non essential areas I was able to run at a loss of no more than €150.

Soon as the lease ended I moved out to share with a friend and reduced my monthly rent and bills by approx half to €800. However just before CHristmas I was laid off from work and was hit by a 25% rent increase a few days earlier and demands from my flatmate of half of a €400 electricity bill (80% used by her) and found it impossible to pay this for more than a couple of months as just when I was finding my feet I lost my income,

In the end, being British, I returned to the family in UK as a safe place to go, sustained a bicycle accident and was unable to work for approx two months, the person I was staying with sold out so without any income I had to go to another relatives who live in a rural area with little chance of jobs. I've done some temporary work but have found it hard to find employment because whilst my skills are in plentiful demand they are not in rural areas.

Basic facts for the last several months:
- I have income of £292 a week from Jobseekers in the UK
- I am paying €80 a month on loan repayments to AIB
- I'm also having to pay €125 a month minimum on credit card to AIB
- Every 3 months I'm paying €80 in quarterly overdraft interest + €15 bank fees.

On each month I've got about £50-£60 left over which isn't enough so effectively I'm having to supplement this with credit card spending, so even though I may pay €120 off the credit card, I end up having to spend almost all that for daily living so the balance doesn't go down and the €6.25 fee each time I transfer money from UK to IE doesn't help.

I have never missed a repayment or gone over any limits, but I worry about December since at the end of December I will have to pay €125 credit card + €80 Loan + bank fees + overdraft interest + facility fee. I will almost certainly go over limit or miss a payment at that point and I cannot afford it.

I would like to constructively work on dealing with this debt with AIB but I'm scared of doing so because realistically offering paying €100 a month of a debt this big sounds a totally pathetic figure to suggest, but of course it will increase when I gain employment.

I post here as debt companies seem unwilling to help me much because of the fact I live in the UK and the debts are in Ireland so the debt charities here don't want to touch cross border debt, the fall of the pound hasn't helped.

 

[RonaOha]

Any help really appreciated.

 

[vandriver]

Is your income £292 a week,or a month?
Will you be coming back to Ireland?
Have you informed AIB about your difficulties?
It seems on the face of it,that you can't actually afford any repayments and you should inform AIB of that.
It's probably on a month or two till you max the card,then you're going to have to face your reality.
What will happen then is that you will get piles of letters,then eventually debt collectors will try,then seeing as you're in the UK,and the amount is really not that much...probably nothing.
So,don't pay anything for 6 months,and save up a deposit for accommodation where the jobs are.

 

[RonaOha]

Is your income £292 a week,or a month?

£146 a fortnight UK Jobseekers which is effectively the same - however I have to sign on every 2 weeks which costs me £6 bus fare since out in the sticks, so effectively I'm £280

Will you be coming back to Ireland?

I cannot answer that for sure, but I do not have any strong requirement to do so. But I have no family there, but if it was my own way, I'd never have left but was put in an impossible position of having toleave.

Have you informed AIB about your difficulties?

Not yet. I believed that I could ride it out since I would find a job easier. I've read their literature about it on the website though, but everything mentions visiting AIB in branch or making an appointment - impossible when you're in another country.

It seems on the face of it,that you can't actually afford any repayments and you should inform AIB of that. It's probably on a month or two till you max the card,then you're going to have to face your reality.

My credit card balance is fairly stable, on an average month the amount I spend on it + interest is a little more than the minimum payment I have never missed so the card could go for another several months most likely without me maxing it, the problem comes when I face the quarterly interest charges, bank fees, stamp duty and facility charges.

The bigger issue is the fact that whilst I get £292 a month jobseekers from the UK, at least £215 of that is going via international transfer to my AIB account, to ensure that there is another buffer on my overdraft so AIB can take the €80 loan repayment and make the €125 payment on the credit card, bearing in mind that AIB take a 6.35 fee for an incoming international payment and my UK bank charges me to make one also.

Realistically late December and early January is going to be where it catches up on me as within a week I'll have bank fees (€15) Loan (€80) Credit Card (€130 estimate) Quarterly interest on overdraft (€75) Facility fee €25) and Stamp Duty (€40) all being due, that is going to total €365 which is obviously going to be impossible for me to pay on an income of £292.

What will happen then is that you will get piles of letters,then eventually debt collectors will try,then seeing as you're in the UK,and the amount is really not that much...probably nothing.So,don't pay anything for 6 months,and save up a deposit for accommodation where the jobs are.

But there is the prospect of them seeking to enforce in the UK and then taking out a CCJ in the UK no or other actions?

I could have simply ran to the UK and not give AIB my new address, but I did, because I'm a citizen who believes in paying their debts when I can rather than defaulting. I've never defaulted on something in my life and had an excellent credit rating up until the break up.

 

[vandriver]

'But there is the prospect of them seeking to enforce in the UK and then taking out a CCJ in the UK no or other actions?'
Not much.And at least a year.The process just isn't that quick.

 

[RonaOha]

It really takes that long?

My fear is if I don't pay and leave it and walk away
1) I'd feel guilty
2) The debt of €10k will end up becoming €15k or more from all the additional unauthorised overdraft charges, late payment and overlimit fees on the credit card etc.

 

[RichardTea]

Sorry to hear you got stuck in a debt trap. I keep reading about them in the Guardian but I think in Ireland people are more blasé about just not paying off their loans. Fellow Brit here but don't have experience of that sort of debt myself - however I have a few tricks from when I was a student in Ireland, which helped me avoid it and might help you.

Try using Revolut to avoid foreign transaction fees (requires a smartphone app) - that will save you £10 a month at least.

UK banks love to throw out cheap to 0% balance transfer credit cards and you might get one of these to transfer some debt to and reduce monthly interest. Or enrol as a student in some sort of eligible course to get a free £2-3k sterling overdraft. Some banks will give you a free overdraft anyway for a monthly fee or whatever. Basically borrowing in the UK is much cheaper and easier and you should do it ASAP before your credit file is hit the UK. A good site to look at would be moneysavingexpert to find the best deals.

As you're UK resident you may not need to pay stamp duty on your Irish credit card - you don't have to pay it on a UK account. If you stop spending on your Irish credit card that will go away, and you will also stop getting charged 3% ish for currency conversion on each transaction.

If you've little job prospects and might be stuck in the trap for years then does it matter if you default on debt. Maybe bankruptcy/insolvency is an option. Or some way of restructuring your debts to a lower interest rate maybe with a personal loan. This might not be an option for you though.

I imagine the interest rate on the credit card is probably higher and maybe you'll persuade AIB to give you a pause in paying off the personal loan in order to pay that down more quickly.

You could consider moving back to Ireland to get much much more in benefits from the state and you can rent a room for next to nothing in the West of Ireland.

Sorry for multiple edits, just added in a few other thoughts.

 

[vandriver]

I just wonder how you are eating and paying bills.

 

[RonaOha]

Sorry to hear you got stuck in a debt trap. I keep reading about them in the Guardian but I think in Ireland people are more blasé about just not paying off their loans.

I never thought I would get stuck in one truth be told, thought it would never be me, I was never in debt my whole life since graduating but the series of events which happened ultimately put me up a creek without a paddle so to speak.

UK banks love to throw out cheap to 0% balance transfer credit cards and you might get one of these to transfer some debt to and reduce monthly interest.

I have got an approval for a £200 overdraft with my UK bank when I opened an account a few months ago but pretty much everything else is subject to me gaining employment, I asked around the banks and I don't think any of this is going to be a goer unfortunately, I was in Ireland for 12 years so essentially they have no info to go on in the UK.

As you're UK resident you may not need to pay stamp duty on your Irish credit card

My AIB Account is registered with a UK address now, so they shouldn't be charging me anything?

don't have to pay it on a UK account. If you stop spending on your Irish credit card that will go away, and you will also stop getting charged 3% ish for currency conversion on each transaction.

Effectively I have to spend on my Irish Credit card to allow me to survive right now.
- I get £292 a month
- I transfer £210 to AIB account allowing €125 paid off CC a month and €80 off loan
- Frees up room to use the CC fo daily living using contact less to avoid some charges.
- I then add that to the £82 remaining and live off that for the month.

If you've little job prospects and might be stuck in the trap for years then does it matter if you default on debt. Maybe bankruptcy/insolvency is an option. Or some way of restructuring your debts to a lower interest rate maybe with a personal loan. This might not be an option for you though.

Realistically the very very most i could afford to pay a month would be €100 and that would be on condition all other one off and quarterly charges are suspended. It would take 10 years to pay off at that rate, but obviously I would up repayments when I found work.

You could consider moving back to Ireland to get much much more in benefits from the state and you can rent a room for next to nothing in the West of Ireland.

Perhaps - however the issue is as I found when I looked last year before coming back to the UK, finding a place to live before you have a job is very difficult.

I just wonder how you are eating and paying bills.

I'm staying with family in a spare room right now so I don't have bills as such, but for food I'm averaging spending no more than £3 a day, I've literally cut right back to the bone in every area I can.

 

[vandriver]

You need to look after yourself,not the bank.It is simply not sustainable to pay anything while on £280 a month.
You need to move on with your life,not just barely exist on sub Saharan income .
How do you hope to replace clothes or shoes ?

 

[RonaOha]

You need to look after yourself,not the bank.It is simply not sustainable to pay anything while on £280 a month.

I see what you mean and part of me agrees - but I just have very strong principles unfortunately.

How do you hope to replace clothes or shoes ?

I will not be at that point just yet since i am not short of these things thankfully, but obviously that could start to be a problem next year, this is why essentially I need to get this resolved before December since the situation is only feasible for this month and next month as I will run out of money by the end of December where I will not be able to pay over €300 of quarterly charges and repayments.

 

[RichardTea]

Perhaps - however the issue is as I found when I looked last year before coming back to the UK, finding a place to live before you have a job is very difficult.

From my experience in the west just a cash deposit and a month's rent upfront secures you a room. Sounds like you don't have that but probably have the means to scrape it together. I'm renting a big ensuite in a western county town for €230 a month. Plenty of jobs going here too and direct train to Dublin and bus to local airport available. It's quite possible to live in town and walk everywhere you need to go as my housemate does.

Effectively I have to spend on my Irish Credit card to allow me to survive right now.
- I get £292 a month
- I transfer £210 to AIB account allowing €125 paid off CC a month and €80 off loan
- Frees up room to use the CC fo daily living using contact less to avoid some charges.
- I then add that to the £82 remaining and live off that for the month.

Realistically the very very most i could afford to pay a month would be €100 and that would be on condition all other one off and quarterly charges are suspended. It would take 10 years to pay off at that rate, but obviously I would up repayments when I found work.

As far as I know UK jobseeker's allowance is designed only to cover costs of getting to job interviews. There are other benefits available when you're unemployed but very difficult to access if you're a genuine person who doesn't want to fiddle the system, and it takes a long time to get in somewhere and reap the benefits of social housing etc.

Others here will be able to advise you better but you can prove to AIB you don't have the means to pay off your debts in your current situation. hopefully they will let you come to an arrangement like €100 a month, compared to some of the people on here's arrears you are still doing great.

If you can't get AIB to come to an arrangement then you probably need to default on one of your debts. Usually the credit card would be the higher interest rate here in Ireland but depending on charges for using your overdraft paying that off and closing your Irish current account might be more beneficial. (then use Revolut as current account to make your payments). Perhaps stop paying off the loan and keep enough income to pay your day to day living expenses. You can maybe then afford to keep making the minimum repayment on the credit card so don't have to default on that and get it paid down ASAP. Interest rates are like 20-25% aren't they so that will build up by €1000-1250 a year. But I think you should definitely stop spending on the credit card as that's creating more debt which is the opposite of what you want to do.

Not overly familiar on the consequences of default, but if I was you I would never want to borrow money again and not care about a CCJ or whatever on my credit file.

 

[vandriver]

Don't pay another cent to AIB,save £680 and
https://www.gov.uk/apply-for-bankruptcy ,while you have no income.In 12 months you'll be debt free and discharged from bankruptcy.

 

[TLO]

Don't pay another cent to AIB

Plus one on this. £292 a month is way below the threshold which would trigger an Income Payments Agreement in a bankruptcy scenario.

As a UK (England or Wales) resident with no property, and debts of less than £15k, RonaOha is entitled to apply for a Debt Relief Order. It lasts for a year, same as bankruptcy, wipes out all listed debts, but only costs £90. Apply through an intermediary such as the local Citizens Advice, Stepchange or National Debt Line.

 

[RichInSpirit]

Hi RonaOha.
Congratulations on surviving so well on so little. And maintaining an unblemished credit record.
I have more income but a totally tarnished credit record.
Your loan, credit card and overdraft are all with AIB. If you combined all these into a term loan, lose the credit card and overdraft, you should be a little bit better off provided that the loan doesn't have too high an interest rate.

 

[RichInSpirit]

On mature reflection Vandrivers and TLO's advice is probably much better.

 

[RonaOha]

Don't pay another cent to AIB,save £680 and,while you have no income.In 12 months you'll be debt free and discharged from bankruptcy.

Thanks - I will take a look later, I thought about bankruptcy but there seems to be a lot of consequences for that and quite a long-winded and expensive process?

Plus one on this. £292 a month is way below the threshold which would trigger an Income Payments Agreement in a bankruptcy scenario. As a UK (England or Wales) resident with no property, and debts of less than £15k, RonaOha is entitled to apply for a Debt Relief Order. It lasts for a year, same as bankruptcy, wipes out all listed debts, but only costs £90. Apply through an intermediary such as the local Citizens Advice, Stepchange or National Debt Line.

So far I have had brief discussions with some of the above and they have been less than helpful because the debt is from another state, they seem to think that they cannot help me in such circumstances?

Hi RonaOha.
Congratulations on surviving so well on so little. And maintaining an unblemished credit record.
I have more income but a totally tarnished credit record.
Your loan, credit card and overdraft are all with AIB. If you combined all these into a term loan, lose the credit card and overdraft, you should be a little bit better off provided that the loan doesn't have too high an interest rate.

I'm a man of my word. The problem is I'm effectively stuck in a trap since I cannot save anything and I'm literally living week to week and some weeks I'm down to my last £10 before getting my next payment for jobseekers.

Thing is if I'm paying €80 a month off now + €5k card + €2.75k overdraft, even if they spread it over five years 10k is effectively going to be €167 a month without any interest or other charges which right now is not going to be affordable, or are AIB going to allow me to spread it over a longer term?

Despite the fact the last 12-18 months have been tough I've always made all repayments, trimming everything back to the bone, but December will be where it catches up with me sadly.

 

[vandriver]

It's time to think about YOU.If you want to be freeloading in some relatives bedroom eating noodles for the rest of your productive years,while engaging in a noble but futile attempt to repay huge(to you) debts,then carry on.
But,as it stands,even if you landed a chance of a dream job in the big city,you couldn't even afford the transport cost for the interview.
You are so wrapped up in the stress,worry and struggle of AIB's problem that you can't see the bigger picture.
You are only reducing your debts by about 8 quid a week,and condemning yourself to a bleak future in doing so.

 

[RonaOha]

It's time to think about YOU.If you want to be freeloading in some relatives bedroom eating noodles for the rest of your productive years,while engaging in a noble but futile attempt to repay huge(to you) debts,then carry on.

I don't - but also it makes me feel a little ashamed to go bankrupt or get a debt relief order etc, maybe I shouldn't but I've always been the most careful person with money all my life and it's not a step I take easy.

But,as it stands,even if you landed a chance of a dream job in the big city,you couldn't even afford the transport cost for the interview. You are so wrapped up in the stress,worry and struggle of AIB's problem that you can't see the bigger picture.

Very true, I guess I was just brought up to always pay debts and have a strong sense of morals

You are only reducing your debts by about 8 quid a week,and condemning yourself to a bleak future in doing so.

Generally more than that since I'm paying AIB €80 a month loan repayment which I never have missed. but you're right, the bank balance is hovering around the same month to month (just below overdraft limit) and the credit card is stable but not going down (payments I make are generally equal to usage + interest, again in line with minimum requirements)

 

[TLO]

So far I have had brief discussions with some of the above and they have been less than helpful because the debt is from another state, they seem to think that they cannot help me in such circumstances?

The below quotation is from the Technical Manual of The Insolvency Service. It basically says that debts incurred outside England and Wales can be included. It would have the effect of preventing AIB from taking legal action against you in England or Wales. A DRO that includes Irish debt is unusual but possible.

46.85 Territorial extent of effect of a DRO

A DRO will have effect only in England and Wales, though any qualifying debts (see [broken link removed]) incurred outside of England and Wales can be included in the DRO – the effect of this being that the creditor would not be able to take action to recover the debt (see [broken link removed]) in England and Wales.

The URL from which the above was taken is:
[broken link removed]