Car as Personal Loan Payment

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Nugget

Registered User
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Hi All

I recently lost my job in January.

I have a credit card of E 3000.00, Overdraft on C/A 1500.00 and personal Loan of 11240.00. I have 196pw and awaiting decision on housing assessment. No letters or actions have been taken yet, so this will be a proactive action. Total owed 15740. I also have rent arrears of 1450 and other debts of about 1600.00.

I have read all the posts on debt settlement and payment ideas. I must admit I had considered just taking my Mrs and new baby and leaving the country, but having seen that banks may accept 40-50% as a settlement, I want to get this sorted now. I do not worry about my credit rating; I just want a fresh start. Now having looked at all the advice I am considering the following, would anyone have any advice as to this course of action.

I have written a letter to the bank manager of my local branch. I outlined all debt and that I wanted to consolidate this all into one loan. I have proposed a payment of 30pw (as this all that I can afford).

Now I need help on the next step.
The only way I can ever hope to get out of this situation is to try to make a settlement. Do I make the offer to the bank or do I wait for the bank to approach me? I have a car with a book value of about 9000.00 and I was going to offer this as payment on the debts. Do banks accept this or would I have to sell the car and give them cash? Has anyone had experience were they would take the vehicle as full or partial settlement. I could possibly raise about 1000.00 euro from a loan form my sister, although she has already lent me about 2000 and I will need to pay this back sometime. Anyone any ideas please?
 
Hi Nugget - sorry to hear of your circumstances - if you do get to sell your car for E9k - that will leave you with debts of c. E10k (I'm including rent arrears and other debts).

By my calculations (and I'm using a rate of 10% for calculation purposes) - you could pay off the E10k over 7 years, with a weekly repayment of just about E38.

I know it won't be easy - but if you could manage it, it will protect your good credit rating for better days ahead...

Best of luck.

pjmn
 
Thanks for the post pjm.
That is a possibility, but getting book value in this day and age is quite hard. Is it a plausable to think that the bank would take the car and what ever cash I can scrape together as full and final settlement. As I just want this to be over, and my credit rating is not important to me as I will most likely need to seek employment abroad for the next 5 years or more. I do not just want to run out, but outside of this I do not see another option.
I just do not want to break any laws. If I can get my loans paid, I can start to look outside Ireland for work and start over. Who know I might be able to retrain or have enough money to come back home one day?
Thanks again for your ideas pjmn.
Cheers Nugget
 
Hi Nugget, they are tough times indeed for you. But what would the bank do with a car? It's not a bartering system we have unfortunately. You need to be realistic. The bank might not necessarily just write off half your debt. You can't just leave the country to escape it. Maybe you should start by going to MABS and seeking advice and a letter which you can send and then the interest on the loans may be frozen so you can repay the amount, even small amounts would help. Start by selling the car so whatever you get can go off the amount owed and then have a weekly payment like pjmn suggests. Good Luck.
 
Have an appointment with Mabs for Wednesday.
I have been doing some more re-search. The personal loan and c/c, overdraft are unsecured loans, although I borrowed the money to buy the car in the first place? How does this affect the situation?
 
Sell the car, clear the overdraft and the credit card as these are probably the most expensive. Use the remaining balance to continue repayments on the personal loan and to finance relocation to a place where there is work available for you. Then with a new job you can continue the repayments on your personal loan.

The key to your situation is whether or not you can obtain a job in the coming months.
 
Went to Mabs. This was great. The lady I spoke to in Dungarvan had BOI on the phone in 15min and strait through to a person who was only dealing with mabs accounts.

She laid out the plan then and there She offered to write the correspondants and really put my mind to rest. She is applying for all debts to be rolled into one persoanal loan, and freezing the intrest on that. Then putting into place an affordable payment plan. She said this could take a while and I might have charges and intrest for next month, but there after all intrest and charges would be frozen and I could work at the principle. She said if I could find work or wanted to go and find work in another country I should do so as this would not effct me as long as I stuck to the payment plan. Once paid I should have a clean credit record in 5 years.

She then also got BOI to agree over the phone to take a reduced settlement if I can sell the car. They agreed to negotiate a settlement then and their, and the lady on the phone from BOI seemed quite open to this suggestion.

Will have to wait and see how it all plays out?
 
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