serious debt problem

Good afternoon all

I would be grateful if anyone could advise me.

After a few years of acting the idiot loan after loan credit card after credit card missed payment after missed payment time has come to call a halt.

After all this having calculated everything i am 28000 in debt and i have no idea how to go about clearing it.

To give a breakdown

Loan from family member e1500.00
Work loan e300.00
Bank loan e7000.00
Car loan e7000.00
Credit union loan e11000.00

I have saving of about e3000.00 with credit union and thwe value of my car is approx e4000.00.i have no credit card bills at this stage.and i have no county court injunctions against me.

Of all the loans my record with the credit union would be the worst.

I dont know what to do!!!!!! Do i try and get one large loan to cover all or do i go to a debt management company.

I would be grateful if anyone could advise.


Many thanks
Mickeydoo


Changed real name, and removed email address.
(risk of spam)-[Rd]

[Edited by Marion to change case]

Hi Mickey,

First step would be to hit the CAPS LOCK key. It'll make your posts easier to read.

If you've decided to get this sorted out then chances are you will. Once you get started it should also prove to be easier than you think it will be.

Don't do anything rash. Those consolidation debt ads on the TV look very tempting. If you don't get a hold of the things that caused you to get into debt in the first place, these products will just dig you in deeper.

I'm afraid I don't know from your figures if €28,000 is a lot of money or not, that would depend on your income level, and your ongoing expenses like mortgage/rent, family situation etc.

Could you follow up your post with more info like...

Monthly Take Home Pay
Any Additional Income

Mortgage/Rent
Food, Clothing, Phone, ESB, etc.

Also, if you could post the interest rates on each debt.

From a practical point of view, if you haven't already, start carrying a piece of paper and a pen and write down EVERY single penny that you spend.

The more you know about how you spend your money the better placed you'll be to make a realistic budget and plan your payoff schedule.

Step 1 is to get stable, and to do that you need to work out how much you can afford to throw at your debt each month. If that amount is less than your creditors currently expect then we need to deal with that.

If you can post more info that would be great.

-Rd

wow !!!!!!!!!!!!!! a reply already !!!!! cheers

Ok

Aplogies for the large casing not the best at typing

I dont have the interest rates to hand but here is a close a breakdown as i can manage

I get paid weekly

Take home pay is E380.00

Rent E70.00
Petrol E40.00
CarTax/insurance E17.00
Food E50.00
Car Loan E55.00 2yrs left
Bank Loan E30.00 (have recently agreed to this with bank but even feeling this difficult) 5yrs left
ESB/Heating E20.00
Credit union E65.00 4 yrs left
Fone mobile E10.00

this leaves me with approx E23.00

I smoke at the moment but am trying real hard to ditch them but its a vicious circle you smoke when you are underpressure and i am under pressure so i buy cigs....aaaaaaaaaaaaaggggggggggggggghhhhhhhhhhh

Am really at the end of my thether

I share a house with one other person and I am single with no dependant children.

I dont know if any of this may help but thanks for the reply anyway.Would it be woth my while going to MABS

Hithere

Hi , I know what your going through , I am having the same trouble but I have to say the worse thing you can do is ignore the letters the bank send you , ring them and let them help and sort out a plan of action for you or go to Mabs , who will help you too .

Best Wishes
Sam

Re: Hithere

Hi Mickeydoo - Do you need your car and your mobile (for work) ? First thing would be to give this up if possible. I notice you dont budget for cigarettes above also. As Daltonr stated you must try and write all expenses down. Would it be possible to get a part-time job. I'm know I'm stating the obvious here but I hope this is of help.

County Court Judgements

May i first point out that i am not for one instance suspected your story MickeyDoo, but i just wanted to query one thing.


You say that you havent got any "COUNTY COURT INJUNCTIONS" against you. I know that these are relevant in the Uk but do we have theses as well, or something similar.

Re: wow !!!!!!!!!!!!!! a reply already !!!!! cheers

>Would it be woth my while going to MABS

Absolutely. Definitely call them. They're the pro's.
Don't bother with debt management companies. You'll be more in control and more motivated if you take charge of the situation. And you won't be paying someone else.

Check out the Motley Fool site. www.fool.co.uk
particularly the Dealing With Debt forum.

Just looking at the figures, it's tight, but I think you can take a bit of comfort in the fact that you've caught on to it now.
This may not be any comfort but...I've seen worse.
Things are far from hopeless. It may take a few years to get in the clear but there's no reason why you can't do it.

If you want to quit the fags, try thinking of it this way... each box of fags you buy is delaying the day that the debt is gone. The 5 year debt could probably be shortened by a year or more if you put the fag money towards it. Now, if that's not a way of easing worries, I don't know what is.

One other bit of advice. There is little advantage to having a lot of savings while also having debt. It's good to have an emergency fund, but is €3000 necessary? You'll have to decide that.

You have loans from work, and also family/friends. These may have no interest and so normally would be low priority, but most people would prefer to be clear of them. I'd dip into the savings if I were you. Banks are far easier to replace than friends.

In 2 years the car loan will be gone, at that point you can take the €55 you were putting towards that and increase the payments on one of the other loans. That would almost triple repayment on the 5 year bank loan and would clear it much quicker. You'll need to see how much you're paying in interest to see which loan should be tackled first.

Anymore questions, or just to let us know what you thought of MABS, feel free to post.

Hope this helps, Best of Luck.

-Rd

Re: wow !!!!!!!!!!!!!! a reply already !!!!! cheers

If it was me, I would concentrate on the family and work loans, or at least be seen to attempt to pay them. Friends and family can be great support, especially if they see you as been proactive.

They may give up their loyalty and respect for you if they percieve you as a squanderer with their money. If your employer doesn't respect your diligence with money, they might be slower to offer you overtime etc?

Who cares if you lose your mates in the bank........they'll be back!

How much is left outstanding on the car loan? Would you break even if you sold it and bought a banger? Remember, image isn't everything!

Try rollyourown instead of cigarettes.

Main thing is not to worry, and best of luck!

Re: wow !!!!!!!!!!!!!! a reply already !!!!! cheers

Hi MonkeyDoo,

just a comment on daltonr's posting :

'One other bit of advice. There is little advantage to having a lot of savings while also having debt. It's good to have an emergency fund, but is €3000 necessary? You'll have to decide that. '

Is the 3k the savings that you have in the account in the CU ?if so I dont think they will allow you to go near this until the loan is paid off.

Mickeydoo,
I think Ludraman's suggestion of Roo-your-own cigs is a good one. Also a good point about selling the car if you can sell the car and still have enough to buy new one. However, this might depend on the type of car finance you have. Is it a straight loan? Was finance arranged at the garage? If so it may be a Hire-Purchase or Consumer Hire Agreement. If you know and could post some other details - like when finance taken out, purchase price, any deposit paid - I may be able to offer some advice. The savings is probably secured against your loan with the credit union. Even if the Credit Union would agree, I would not recommend using your CU Savings to reduce CU debt. See if you can reduce all your payments to 'interest-only' payments. Then use surplus to clear the work loan - Info on Car Finance is Key. Also complete a 'living expenses' budget (ie excluding debts) and post what your surplus income is. No need to post your 'living expenses'. Although in your own interest you should also budget for items which you are not going to miss(these might include Christmas presies, clothes, social, cable tv,) When is you car tax/insurance due?

Are you renting accommodation? Can you find a place with cheaper rent? Is there space for a third person in your current accommodation? That would reduce your share of the rent and may also reduce the bills. Alternatively, is there a family member or friend you can move in with for no rent or lower rent? Remember that rent a room allows individuals to earn around 6000 per year tax free, so they may be willing to have you move in at a low rent to improve their own cash flow! Doing this for even six months would allow you to reduce your outgoings enough to pay off the loan from a family member and from work and put some towards your other bills.

UPDATE ON THE SIUATION

IN RESPONSE TO THE CAR LOAN

IT WAS FINANCE ARRANGED BY THE GARAGE WITH FRIENDS FIRST FINANCE

I BOPUGHT THE CAR IN JAN 01

HERE IS A BREAKDOWN OF THE AGREEMENT

TOTAL CASH PRICE INCLU VAT €9920.00
DEPOSIT PAID €640.00
CREDIT TO BE FINANCED €9280.00
INTEREST ON CREDIT TO BE FINANCED €2969.00
DOCUMNETATION FEE €63.49
PURCHASE FEE €38.09
TOTAL COST OF CREDIT FINANCED €3070.58
TOTAL AMOUNT PAYABLE €12350.58

ANY SUGGESTIONS WOULD BE GREATLY APPRECIATED

CHEERS !!!!!!!!!!!!!

Re: UPDATE ON THE SIUATION

So your car is worth about €4k and the loan outstanding is about 5k. Ring them up and offer to pay off early and ask them for a refinance deal. I'd say you could get out of it even steven providing you can sell the car. Tell them you cant afford to keep it and they will be left with no payment if they upset you.
This move will immediately save you €82 a week.

ideas

Well you are making ends meet so I'd say leave well enough alone, however, your income is quite low cmpared to your loans, so I would, if possible, consider looking for a better paid job, seeking a promotion or just ask for raise.

Your biggest problem is the credit union, however, you are also spending a lot on your car. Unless you really need the car I would consider downgrading or selling it.

Otherwise go and speak to the credit union and explain you are having difficulty with the repayments. They may allow you to pay off more slowly.

Don't refinance - you seem to have a problem borrowing and I would recommend you stop now before things really get nasty.

banks help you? you must be joking!

I have to say the worse thing you can do is ignore the letters the bank send you , ring them and let them help and sort out a plan of action for you or go to Mabs , who will help you too .

Click to expand...

I hate to sound bad minded but from my own experience and from that of a family member I can guarantee you that the banks will NOT help you. They will do what they like to ensure that they get their money bank from you, REGARDLESS of how it impacts you. You are a source of profit to them, nothing more. Unless your situtation is relatively minor (i.e. not having multiple debts and several missed payments) they will harass you until you settle with them on their terms if possible.

Your best option is to speak to MABS, who've great relationships with credit unions. The large credit union loan seems to be the biggest of your problems and they may be able to help here.

As to your expenses, the only thing I can suggest is to look into your car expenses. It might be a necessity or a luxury you cannot afford - this you need to decide for yourself. If you're not driving a 1litre engine I'd seriously consider trading down, or even buying a 1litre at the same price - you'll save on petrol and insurance and cut a bit off your costs. I would not recommend selling your car unless you're really desperate. I did that myself but still had to pay off the rest of the loan which took me 2.5 years and cost me over €4400. For nothing. Bear that in mind. Also, it will take you years to afford another one so try to stick with it if you can. But consider a model that will cost less to run.

Reducing debt

Please go and see this excellent site for reducing / coping with debt:

[broken link removed]

Hope this helps,
Pu66ycat