Bank advice (debt related)

davdela

Hi all.

I have spent a good while thsi morning reading through previous posts on this board to see if someone has already aksed the question I have.

Very interesting reading.

I have a credit card debt stretching back to November 2001.
Debt as it stands is €5400.
To cut a long story short, I missed payments quite a bit and did the bad thing and foolishly ignored the warning letters.
As a result, the Bank (BOI) passed the debt to solicitors who got a Judgement debt (reference begins with CCSJ...i presume that is Circuit Court something or other)

I arranged with solicitors/MABS to pay a set sum per month which has been kept to since 05/2003. (the amount paid each month has increased along with my ability to pay more)

According to a statement I requested about the CC debt owed, interest is being charged at 8% pa simple interest

I am in permanent fulltime employment for the past 7 months after a couple of years of contract, unreliable, lowpaid employment interspersed with one period of unemployment.


Besides this debt I have a Credit union loan on which I also missed payments when I was unemployed.
(I'm fcking terrible with money!)

What I'd like to ask is could I apply and get a loan to pay off this debt and credit union loan in one gulp. I am thinking of going to my branch where my account is and where my salary is paid directly.

I know this won't erase the bad credit rating I must surely have, but I would (feel?) better able to manage one repayment per month.

Any opinions/experience?

Is there any point at all approaching my local branch to ask (I know I'd be mortified if it was refused!)

TIA
David

BuffyBot

I guess it all depends on your relationship with your branch, but I suspect it would have to be a pretty good relationship in order for them to cover this.

From my experience, a lot would refuse - however, others might have more information.

Genghis

Dave,

How long (time wise) have you got to go on these two loans? I would be wary about taking out a single loan to repay the two you have if it means that (for example) you would be paying off these debts until 2009 (when otherwise they'd be cleared by, say, 2007 or whatever).

Other advice:

1. Don't be tempted to ask for more than the total amount you need to pay off these loans - there will be a temptation (and possibly a push from the bank) to take a couple of grand extra, have a holiday etc. Anything extra will probably go on short-term purchases which you will be paying off for many years.

2. Decide what you can pay back in total and be insistent with the bank about the term of the loan (how many months). Ideally you might try to pay a little extra back so as to reduce the time until you are 'free' again.

3. Banks love people who rollover debt because it tends to lead to a situation where a debt becomes semi-permanent. So beware!

4. Remember that while it seems fine to sign up to a 5-year loan, perhaps at a lower repayment than you currently have, in the course of that 5 years your own personal situation might change. Having to repay an old debt in a few years time might seriously impact your ability to borrow for (say) a car, or a home.


If I were you I would be inclined for a number of reasons to continue paying back as you are, increasing payments as it becomes more possible. While the bank may not give you a loan now anyway, if you pay them back as you promised then I would expect that they will forgive your previous indiscretions.

spongebob

Originally posted by davdela
interest is being charged at 8% pa simple interest

Thats a GOOD rate, you will not do better even with a record showing that you did pay everything off as it fell due.

Besides this debt I have a Credit union loan on which I also missed payments when I was unemployed.

These are the ones you need to work on. When your record is still (apparently) crap on the Big Computer in Dublin the local Credit Union will still lend to you ..at about 8% ....while you do your penance. If you apply for a loan anywhere else such as a bank or building society they will check the compiuter and then , to add insult to injury, flag the rejection on the bloody record as well. The Credit Unions tend to judge application according to how long you are there and how good.

You can rebuild credit quickly with a CU if you had an OK record with them in previous years before your episodic underemployment....which could happen to a bishop TBH .

The other CC thing will hang around up to 5 years as I recall and will then be deleted. If the solicotors are not recording your (increasing) repayments in full on the SAME credit record then you should get MABS to force them to do so. Now you have been compliant for ages you should get some benefit from it.

You local bank branch is useless, the back office processes everything nowadays and will flag the rejection on the Big Computer.

Askaboutmoney.com is very good on this kinda stuff, there is a forum for people who need to rebuild their credit ratings after a hiatus of some sort.

The best advisor of all in here is Shoegirl (if she shows up) , do exactly as directed , she should have her own forum.

HTH

M

davdela

Thanks to all for offering advice.

I have a lot (more) thinking to do before I attempt to go down this route.

The 'psychological' effect of paying off a CC bill from years ago (and it seemingly neverending) is a bit wearing to say the least.

The temptation to apply for a consolidating loan is huge to me - despite my past crapness at managing my money I'm a lot more aware now of living within my means, not perfect yet by any means, but way better than even last year.

I understand what Genghis says about being tempted to add an extra few thousand in (if it was offered) - I know exactly how much I would need though and don't intend to go over it by a cent!

Muck - my local CU have been great and I'd love to be able to clear that loan with them.
I want to rebuild my line of credit/trustworthiness with them above all else.

Thanks for the advice and the link - I'm sure it's been said many times before on this board, but I'll repeat it anyway:

FOLKS! DON'T STICK YER HEAD IN THE SAND IF YOU HAVE DEBT PROBLEMS!!

Ignoring debt leads to more misery than could ever happen by facing up to them.

And whatever ya do, don't ignore the warning letters!
Aaaarghhh...if only...


Cheers

David