Money woes

LegacyUser

I want to tell someone about this problem because nobody on the planet knows really and I want some outside opinions of what im gonna do.

Basically Im in a huge, huge amount of debt and see no way out for the rest of my young life. Im 24 and have amassed a lot of money problems, im not blaming anyone but myself for this, ive been v stupid with money up to now.

I owe around €13,000 to the bank of ireland resulting from a £4000 personal loan i was offered when I was 19 and on good money. I got it out to pay for car insurance but stupidly did so over three years. Next years premium appeared so i got out another £3000 topup loan to cover that. Somehow the next year I got more and a credit card. I was earning about £2000 a month so payments of £300 per month for the loan and £100 for the card were'nt too bad. Im not sure what happened next but somehow I blew another £2000 loan on computer stuff and probably drank a lot of it. I left the job with the good money and started a business (stupid I know but cant change the past) when I was 21. I was on terrible money for about two years more as the busienss didnt do well and I put most of what i did earn to the payments. That business went arseways and left me another €5000 of a loan to be paid back along with back payments on my car and no payments made to several companies. A high court case is now looming for another business I was involved in which could cost up to €10,000 in fees allthough my sol is confident we can win.

To sum up. I now owe €11,000 to the BOI, €1,000 to the credit card, €5000 of the business loan and facing a lot more problems if the court case goes bad. My credit rating is destroyed, I'll never get another loan or a mortage. Ive had debt collectors call to my door and letters from every agency in the countryI did drink a lot and do a fair amount of drugs for about two years to try and blot it out but have copped on now and try and save most of my €400 a week wages but most gets eaten in payments. Im really depressed, hate my job, really want to travel but cant afford to get away and am watching my youth slip away into repayments for stuff I cant even remember buying. My parents have nothing and I wouldnt take anything from them anyway. Im single and practically none of my friends know about my problems. Ive been to MABs but all they did was work out a budget for me which I had done anyway and still leaves me with nothing really to save and very little to have fun with. Im not afraid of hard work but I just cannot see any way out of this for another 5 years or more by which time my head with have exploded and I wont have done a thing with my life. I know I should have stayed working for a decent job and paid off stuff properly but its too late for that now and I cant leave my current position even though I know I might earn a bit more elsewhere.

WTF do i do?

Victor

1) Realise that it isn't the end of the world.
2) Is it possible to get a second job?
3) Have you only gone through MABS or have you spoken to the bank direct?

Endurance Man

I would have to say there is no easy way out. You messed up and now your gonna have to put in a lot of hard work to get out . Work hard, no/very few luxurys and just concentrate on getting it all payed up as soon as possible. DO NOT take out another loan!

ronbyrne2005

saw a programme about a new law in uk which allows anyone with un manageable debts to declare bankruptcy and basically get off with all their debts except for a few grand and it doesnt affect your credit status! dont think you can do it here though so unless you move to uk and transfer your debts to uk banks and then declare bankruptcy i'd say try and get someone to loan you money at a lower rate,if your parents have a house they own they could borrow the money for you using their house as security ,it would mean you get the loan for mortgage rates so less than 4%interest you could pay back the money much quicker this way.
its only 13k if you paid back 150 a week it would take 2 yrs,hardly the rest of your life! your youth lasts into your early thirties these days,i knwo peoplein their 30's travelling for a few years round world.

do you have any assets to sell? car? sell anything that isnt a necessity and move back in with parents if you dont already live at home.

Ruu_Old

cut up the credit card, plug away at your job even though its going to be hard on you and keep paying off what you owe, bit by bit. you will have to cut a few things out of your life, work out how much that is costing you and then put that money into paying the loans back. best of luck.

Gordon

I'll move this to BEF.

masterK

There are advertisements on the radio at the moment from the CSO looking for people to take part in the census early next year, it will be evening/weekend work and the sum mentioned was €2200.

Alternatively you could look for other evening/weekend work such as take away delivieries.

Is it possible for your parents to take out a loan on your behalf over a longer term that would enable you to pay off your Credit card and get the debt collectors off your back? At least that way you could shop around for the lowest interest rates and give yourself some breathing space.

0utshined

The Motley Fool have a couple of very good message boards on their site which you could get some advice form, the Dealing with Debt board and Living below your Means board. You have to sign up to view them but it's worth it although they can be UK-centric at times. The address is fool.co.uk

Best of luck.

Culchie

You're 24 now, so the 'youth slipping away' argument is a denial one.

I was once in similar situation to you with a badly thought out business idea when I was your age as well. I should say badly thought out business partner, but that's for another day.

A part time job will prove an enormous help to you, supermarkets, bars, promotional work, there are lots of opportunities to help you tackle these loans. I'd say that you offered your services available for work here on boards (if there is an appropiate thread), you will receive plenty offers.
You have to take the bull by the horns though, you've had your little whinge now, you entitled to that, but it's now time to take control of the situation.

No creditor in the country is going to bring you to court, if you can show that you are working to pay off their loans....at the end of the day, all they want is their money back.

Contact all the creditors and explain situation and come to agreement with each of them on how much you can pay each week from your existing job(you probably have).

Then with your part time income, you will see this as bonus income, and get a sense of satisfaction when you are adding €20 here and €30 there on top of your weekly payments ...it will actually lift your spirits, and of course the debts will get paid off quicker.

All the best Man..... you come out the other end of this (and you will if you want to), it will make you all the better, and future trials and tribulations will be like water of a duck's back.

AARRRGH

OK. You owe €16,000. Not the end of the world.

I'm in a mildly similar situation to you.

1. Lots of people our age have large loans. Sure, they might be car loans, but they're still loans. It doesn't seem to bother them.

2. The vast vast majority of the world would love to swap places with you. Really, you might be in debt, but it's many times better than living in Iraq being shot at by some Americans...

3. I'm sure the money was not wasted. Did you learn a lot from your business? Did you have some great times?

4. You took a risk with the business. Most businesses fail. You're not abnormal.

5. Your credit rating will be wiped clean after 7 years.

Regarding the part-time job. There are plenty of "easy" part-time jobs. You don't have to choose something "degrading" (you know what I mean.) Maybe a few hours in an internet cafe or something like that?

And realistically, €16,000 paid off over 5 years is under €300 a month. Not a huge amount!

Stay positive. You'll figure something out. Just try to keep things in perspective...

Linoge

nosparechange wrote:

Ive had debt collectors call to my door

Thats illegal btw, so next time tell them to F off.

If you explain that you are struggling to your credit card company they might be able to put you on a preferable rate. Either way, I'd pay them off ASAP because of the high interst.

I wouldn't take any loans from friends or family, thats where it can really start to get nasty.

Look at the whole thing realistically. Its a car loan for Ford Focus that you dont have. You'll pay it off eventually!

Anyway, as Robert Kiyosaki says, if you're going to go broke, go broke before you're 30. (so congratulations!:) )

tonymahoney

I think you need to consolidate all your laons into one and i highly recommend your local credit union as a way out of this. They are a friendly co-operative society and will be sympathetic towards you.
Talk to me privately as i have vast experience in this field {and i am in debt myself}

Rgds
T.

FranknFurter

Linoge wrote:

Thats illegal btw, so next time tell them to F off.)

Is that true? Where does it state that exactly?
Wondering because somone I know recently had a similiar experience, the whole experience scared her, she thinks she is in big trouble and is a nervous wreck. :mad:

kilman

I went to give you a success story!
When I was in my early 20's I wanted to complete my degree through the Open University. So I applied for a loan and decided to get a loan of 5000(twice what I needed)
During the next few years I would regularly top this up.Got a loan for wedding, then one for car.
Over those years I was getting decent enough money but I was scrapping by and depending on credit cards/monthly child benefit to survive.One day I sat back and realised between credit cards and loans I owed over €32,000.
That was in April 2002(I was in mid 20's then). My partner(who wasn't working at the time) and I decided that if we wanted any chance of buying our own home we'd have to get rid of these loans.
We set a strict budget and managed to survive on that. At the same time we started to put the extra money(maybe only 100-200/mth) in to clearing the loans.Due to using pay increases and any extra money to clearing the loans, they were all gone in September of this year. I still use my c/c but religiously clear it every month. Don't dispair. You will get there

AARRRGH

That's a great story kilman. Thanks for sharing

GreeBo

Consolidate your debts so you can afford the repayments.
Especially the CC one, you are getting creamed on interest on that.
Even get a new card and transfer the balance and avail of the x months interest free.
Keep moving around and keep paying it off.
Try and renegotiate the bank loan for a longer term and use that extra cash to pay off the CC.
Its crap but its not the worst state anyone has ever been in.
Take an accurate account of what you are spending on a weekly basis and then cut out the non essentials.
You will be surprised at how all those €5 lunches in BK add up when compared to a Ham & Cheese toasty from home...

good luck.

bk

You have gotten some great advice here, to summarise:

1) Don't Panic

- Your debt really isn't that large, with the right attitude, mature thinking and hard work it can be paid off in just 2 years.

2) Change your attitude.

Your attitude until now has been denial, you continued to dig yourself into debt and when you started to see it you tried to drink away your worries. That needs to stop, you need to put all your energy into solving this problem.

3) Pay off your credit card and cut it up.

This is probably your biggest problem at the moment due to high interest rates. You need to pay this debt off right now. A credit union loan would go a long way to help with this.

Then cut up the credit card, you really don't need it and it is too easy to spend money.

4) Resctructure all your debts.

It is very likely that you are paying more interest now then you need to, you should try to get a loan from the credit union to pay off all your other debt. Typically a credit union loan would be cheaper then all your other broken up loans, of course make sure it is.

DONT get more from the new loan then you need to pay off all the other loans and pay them off immediately (be careful of any early closing penalties). You don't need to push yourself any further into dept.

5) Plan carefully

You need to start to become like an accountant, you need to know exactly what you have coming in, what you spend and what you have to pay on the loans.

You should be able to estimate your monthly spend, how much will go to paying off the loan and then you should know exactly when the loan will be paid off. It makes it much easier to be careful with your spending when you have a real goal and you know exactly how much over or under you are each month.

6) Change your lifestyle

Your goal for the next 2 years needs to be paying off your debt, this will likely require a change in lifestyle. You need to cut out anything frivulous, reduce your spend on drink and going out, etc.

One very good tip is to decide now what you want to spend each month. Take that much money out at the start of the month and then put away your ATM card for the rest of the month (put it in a drawer, etc) and live on what you have budgeted for.

One thing you might be able to do is move back in with your parents to save on rent and put it towards paying off the loan.

Or you could sell your car and get a bike, use public transport, etc.

7) Get a part time job

Get a second job and use it to pay off the loan faster.

Remember you most do everything you can to pay off the debt, rather then just the interest on your debt, the quicker you pay off the debt, the less interest you will have to pay.

You can easily have this debt cleared in two years, but only you can do it, it will take your hard work and discipline, no one else can do it for you.

RainyDay

ronbyrne2005 wrote:

saw a programme about a new law in uk which allows anyone with un manageable debts to declare bankruptcy and basically get off with all their debts except for a few grand and it doesnt affect your credit status! dont think you can do it here though so unless you move to uk and transfer your debts to uk banks and then declare bankruptcy i'd say try and get someone to loan you money at a lower rate,if your parents have a house they own they could borrow the money for you using their house as security ,it would mean you get the loan for mortgage rates so less than 4%interest you could pay back the money much quicker this way.

Irish bankruptcy legislation is very different to the UK. You can't declare bankruptcy here, only your creditor(s) can declare you bankrupt. It costs about €13k to go bankrupt, funnily enough. But even in the UK, it's not as easy an option as the headlines might lead you believe. You can say goodbye to ever getting further credit (mortgage anyone?) if you have a bankruptcy on your record.

No disrespect intended, but I think his parents would be crazy to use their house as security to give a loan to anyone who has a history of blowing money on drink & drugs.

The solution is fairly simple really. Increase your incoming revenue by taking on more work. Decrease your outgoings dramatically. Pay off your highest rate loans (probably credit card) first. MABS can help in negotiating with your creditors for more time.

Lump

Yea, advising some one to declare themselves bankrupt over €12,000 is madness. If you declare yourself bankrupt, you will NEVER get another loan, even credit in a newsagents. If you inherit a house someone is bound to take it from you. etc etc etc.

Consilidating all your debt is a good idea, but do it with a bank/credit union (these are very competitive) and manage your payments. €13,000 over 10 years is likely and would be hardly any money per month. GO AND TALK TO THE BANK MANAGER. The reason they send you letters is because they are ****ting themselves that they haven't heard from you and their money is walking.

If you talk to them, they'll be helpful to you and would probably increase the term of the loan to at least get their money back with interest. Obviously if you increase the term, you'll end up paying more back.... but at least the monthly amount will be less.

To sum up, €13,000 seems like a lot, but it's managable. My friend in the Uk is 29 and in £60,000 of debt, be didn't work for a year and still managed keep his head above the water.

It'll be fine, but seriously, go to the bank. They'll offer assistance.

John

lomb

yes, as others have said, what u need is as long a term loan as u can get say 5 years, and as low an interest rate as u can get, seeing as u owe the bulk to boi, get an appointment with them and give them what u can afford and ask for a loan to consolidate the lot. it shouldnt be alot per month that way.

remember people in their 30s take out loans these days for many hundreds of thousands ok they may be 30 year loans and they may be low rate loans but they are still loans, with obligations.

dont worry about the business that failed, as long as uve learnt from it uve got something out of it that u can use in the future.

try to find a way to increase ur income, part time work helps etc.

maybe think of a way to make money in a part time business of some kind without any major risk or investment other than time . there are ways to...
u need to stand back from it all and take charge, u feel desperate because u are in the middle of it, but try to stand away from it, and u will see that u are not in a desperate situation. as others have said many people in the world dont even know when they will eat next.

LegacyUser

Linoge wrote:

If you explain that you are struggling to your credit card company they might be able to put you on a preferable rate. Either way, I'd pay them off ASAP because of the high interst.

God .. did you think the bank wasn't going to ask you for the money back! What were you thinking of!!

If it is that difficult to pay it off and you have people knocking at your door .. then I'm surprised your not on the bad credit list. If you are on it, then the credit card company should stop your card completely .. by that I mean .. stop adding interest to it. You still have to pay it off, but there is no more interest added.

I gather you don't intend to by a house in the next few years, until your loans etc are sorted out ....

Most of all .. don't worry .. its not the end of the world. But DO keep paying it off ...
There are very few people who don't have one loan or another .. just keep on top of the payments .. speak with your bank about making the payments more manageable.
Don't leave it until it gets on top of you.

The bank wants their money back , in most cases (unless they are mad) they will do whatever they can to help you out.

"I can't afford 400 euros a week payments at the moment"

"Okay .. what about 250 euros, over 8 years instead of 6".

Speak to your bank!