Relative in financial difficulties

I've recently become aware that a close relative is in financial difficulties.

They have two investment properties in negative equity and are holding balances at max limit on credit cards, are overdrawn on the current account and have two car loans.

They work in one of the major banks. Their situation is worsening as they have a kid going to college in Sept and are waiting to hear the details of an impending pay cut in the next month. The person has been borrowing money from family members to get by and after another request for money they were asked to share their financial situation with me.

I stressed the need to consolidate loans and assumed they could get a top up mortgage. My estimate is that ca€50k would see them through the situation for the next 5 years. The person however seems to be in denial about the extent of the problem and doesnt want to approach the bank for fear it will impact their career prospects. He seems incapable of sitting down and drawing up a list of options and pursuing the best path, probably because he doesnt want to face the reality that serious lifestyle choices such as sale of a second car need to be made.

Our family are conscious he is under severe stress having lived with this issue for over 3 years but equally want to ensure that he finds a way out of the problem. He says he doesnt think he would get a top up mortgage but I'm not sure if this is the case or not. I approached MABS for advice but they will only deal directly with borrowers which is understandable. Does anyone have experience of how staff members are treated in the banks when they come clean about their personal situation or have any other advice on the matter.

Any help appreciated!

Don't know about staff members but in general consolidation of debt is not happening and top up mortgages just as unlikely if there is already a shortage of income. Whether there is leeway for staff I don't know, used to be the case that staff were actually underwritten more strictly than general public but think that went out the window a few years ago.

Are the borrowings with the bank your relative works for?

I think your relative needs to realise that their financial situation could very seriously impact their job. AFAIK, most of the big banks have a clauses in their employee Code of Conduct that cover conduct of financial affairs - he may well be in breach of the code and the bank may become aware of this.

My understanding of banks is that those who work there have to be squeaky clean money wise. Having said that it's well known that a lot of bank staff overborrowed. Including borrowing to buy the banks own shares (AIB). So banks know their own people are in trouble and he will not be the first. Remember that it is in both the banks interest and his own that it gets sorted. So he should not be afraid to approach HR or his boss etc.

You state he is in denial but it might be worse, stress can affect people very badly. People like that need help. You have to be careful. If you are close to him perhaps with your help and some facts and figures he may be able to sort it out. If he is embarrased to go to Mabs would he allow you to post up the figures on her to get some advice (on the money makeover thread).

The worst thing he can do is not deal with it, it will eat him up. Has he told his spouse?

Thanks for the input. The house loan, credit card and overdrafts are with the bank they work for; the buy to lets are with another bank. His spouse knows but i'm unsure if they are aware of the extent of the problem.
I agree with your comments re stress. I have put together a spreadsheet with cashflow from now until 2018 in the hope that it will help them address the issue in a comprehensive fashion. I keep stressing that addressing it comprehensively has to be better than sticking plaster solutions of seeking sums periodically from family members to get over a requirement to keep credit card or overdraft within limits.

I'll address this from an "insider" position.
Bank staff are no less vulnerable to debt problems than any other members of society. Your friend is not in any worse/better position than many of his colleagues. Bank management are well aware of the potential difficulties for staff and all of the major banks have a policy on dealing with staff members in difficulty. The main risk here is that a staff member in financial difficulty may be tempted to dip into clients funds, as an option, rather than addressing the issues with Bank HR.
Please advise your relative to approach the Bank HR staff on this issue. It will be dealt with sensitively and privately (without direct managers being informed) and if he co-operates with the system a satisfactory resolution can be reached. His career prospects are more likley to be damaged if he fails to deal with these problems, than if he uses the system that is there to help all staff in difficulties.