Understanding arrears

R

Riaghan

Registered User
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Hi everyone,

Unfortunately my other half fell into a lot of arrears with the cu when he lost his job. His statement reads 5600 left on loan, shares of 1500 or so and then loan arrears of 3000. Are the 3000 on top of what's left on the loan or included in it? And as we cannot pay off the arrears is there any light at the end of the tunnel. The most we will manage is the original agreed amount per week and that's stretching us but will this mean our interest will be accumulating each week because we have no way to get rid of arrears? Has anyone any suggestions? I'm quite desperate at this stage as we have found out that we are pregnant also. Thanks in advance.
 
You don't need to answer all of these questions here (some are a little too personal in terms of how much you knew but some answers may help people understand the situation better)
What engagement has he had with the CU so far? Has he had any discussions with them regarding the loan and his ability to repay? I am guessing you have not been aware that he was in difficulty until recently? If you are saying you should now be able to afford the amount he was supposed to be paying, what happened that meant he wasn't able to? And if that has happened already, is it likely to happen again? (you do say that the original amount will be stretching you). What is the outstanding term and what are the repayments?

Until you know what engagement he has had already, you can't really know what to do next. If he hasn't done so already, I think he needs to start by going in and sitting down with them. Explain what has happened and what he can achieve in terms of paying off the loan. He ought not to promise more than ye can manage so if you think you cannot manage the original repayment or are likely to get into difficulty again doing so (say for example if it is dependent on two incomes - having the baby may have an effect) then you need to say what is affordable for you - otherwise you just end up in the same position again. He ought to request that the arrears portion at least is parked and no interest accrues on it.

In terms of what is outstanding, I could be wrong but I think the arrears are on top of what's left on the loan. If he is unsure, the CU should be able to clarify that for him.
 
He became unemployed which meant he was unable to make the payments. He has now started working again but it is a minimum wage job and his loan was taken out when he was earning about double what he is earning now-hence it will be a stretch to meet the original agreed amount when finances were much healthier.

I did obviously know he had a loan but didn't realise how bad things had gotten. I guess I was engrossed in looking after the rent, utilities etc and managing all our other finances on my wage alone. He did get very down constantly applying for work and not getting taken on and I've a feeling he's engaged very little... An ostrich springs to mind.

Now that I've seen the statement complete with threats of court action I'm obviously very worried. And the 3000 arrears obviously make a huge difference to the loan if they are not included in the loan balance and are on top!!
 
He is picking himself up in general and well done to him for doing so, what that also means is it is a good time to start dealing with this decisively. The outcome he wants is probably an achievable repayment schedule. The first thing to do, is to sit down together and plan what it is you can achieve. Thus fortified with a plan and your support he needs to go in and talk to them. Threats are just that .they have had the desired effect, they have prompted a reaction. Now is the time to start demonstrating that the problem can be dealt with without resorting to court. There is no reason to hide from it. We are always harder on ourselves than anyone else will be, he may find that a meeting will not just help regularise his debt situation, it means he is taking back control of a problem that has been hanging over his head for ages, it is empowering to act, it disenfranchises us to sit back and let the world do it to us.

The arrears do make a big difference if they are not counted in the outstanding balance but it isn't an insurmountable difference. He needs time to address this and it will take time to pay down but once he has started managing it, the positive feedback will be beneficial.

As I've already said. The best approach is to sit together with him and plan what ye can do, what ye can afford and what ye would like to achieve. Write it down. Then, with your support perhaps, he contacts the CU and sets up a meeting to discuss the loan and the arrears. He sets out what ye have discussed and attempts to negotiate with them. After each meeting, document what was discussed. File it and keep it, that way if the worst every comes to the worst, you can always demonstrate to a judge exactly what you did to resolve this. Hopefully it won't come to that and it will be easier than he anticipates, however undoubtedly, he'll come up against blocks along the way.
 
Thanks to all for the advice.

So-crates, thank you, that's exactly what we are planning on doing but I was just hopping to clarify arrears etc beforehand. I am a little better at problem solving so wad trying to do a little background research before he has to go facing them. I know he's a bit daunted by it all.

Many thanks for all your input. I guess we will have to find out from the credit union whether the arrears are on top. With a bit of luck they may be included!
 
1. If statement says 5,600 left ,then that is what is left.
2. the 3000 {arrears} means what payments you have missed up to now.
3. You hold {shares} value 1500.

As I see it
A. You owe 5,600 less shares of 1500 = REAL amount still owing = 5600-1500 = 4100.

Suggest ,
Arrange to call to Union and honestly present your financial issues.
I would be surprised if Union will not be fair.
 
Don't stress OP its not a big deal. In the first instance write to the CU and request under Section 32 (5) of the Credit Union Act, 1997 to offset your shares against the loan . The debt is now roughly €4100. Work out with your partner what you can afford to pay and offer that to the CU. The CU will know they can't get blood out of a stone and no judge can either, nor will they try.
 
Thanks so much for answering my questions and relieving my worries. I now at least understand what my totals are and what needs to be done. Your help has been invaluable because it's allowed me to be logical and proactive.

Have spoken to my husband armed with the knowledge supplied here and we have come up with a manageable plan.

Thanks again
 
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