What to do about debts if job is lost..

techie1981

Hi All

I am just looking for some sensible advice if anyone out there can help!

A few years ago when I was young and very stupid I managed to get myself in to debt with 2 personal loans...at the moment one of them has €13,500 remaining and the other around €8000 and I am keeping up with the payments after putting myself on a very strict budget and stopped spending like a fool!

There is a very good chance that my contract will not be renewed in work when it is up for renewal in Feb 2010 due to the recession and nothing else.

I am now looking for advice on what is best to do about these personal loans? I will obviously continue to pay these whilst I still have a job but I am just wondering should I approach the 2 lenders in question now and tell them about this or what is the best thing to do? I am terrified of what will happen when if I lose my job and don't want to end up getting a prison sentence for it!

If anyone has any advice I'd appreciate it!

Many thanks, John

m5ex9oqjawdg2i

Hey,

Welcome to boards.ie

Firstly, you won't go to jail for it. At the most, it would be a civil case, which simply has very little chance of happening.

Over the past few years I got loans for cars, holidays and college, they go up and down. from 24K to 14K (in nine months) back up to 19K and now down to about 14.5K. I am not too worried about it, even though I am unemployed. I spoke to my bank and credit union, I came to an agreement with them, rearanged the loans so it would suit us both. When I get a job I will have them payed off in about 9 - 12 months.

With expenses, I find it difficult to believe that you can live your life and be debt free. I don't mind being in debt, once it is managable.

I suggest talking to Mabs if it is getting to you.

Best of luck.

EORaghallaigh

my friend was in a similar situation, MABS is the place to go - they will keep all your creditors at bay... www.mabs.ie

eth0_

When you say your contract might not be renewed, do you mean you are a contractor, or are you referring to a probationary period in a full time job?

If you are in a full time job then you should take out payment protection insurance ASAP. This will cover your repayments in the event you are made unemployed.

Unfortunately this cover doesn't apply if you are a contractor, due to the unstable nature of your employment.

RangeR

Also, maybe try to pay off as much of the loans as you can now, before Feb. Just in case.

Starting to cut back [and offsetting your loans] now [when you have money] will also ease the transition if you lose your job.

Pythia

As soon as you do lose your job, ring the bank and tell them. This will make things much easier for everyone. They might be able to arrange a payment break or extend your term making the monthly repayments less. Try to pay off as much as you can right now too.

BuffyBot

Well you won't be going to prison that's for sure. Things have moved on a bit since Dickensian times

Solid advice from others - eliminate what you can now, while your working and then when you know for certain that your work situation is about to change, approach the lenders and talk to them. No point storing trouble just yet when you don't have an accurate picture of your future to present to them.

Mrs OBumble

Isaac Aggressive Alternator wrote: »

With expenses, I find it difficult to believe that you can live your life and be debt free. I don't mind being in debt, once it is managable.

If you get into debt, then a portion of your future earnings will need to be diverted from "living your life" to paying the interest on your debt. This effectively reduced the amount of money you will have to "live your life" in future.

Getting into debt is stupid, unless it's for something where the alternative to getting into debt would cost you even more in the long-term.

OP, the MABS advice is good. One more thing for you to consider: if your job does end, it may be some weeks until any welfare you are eligible starts being paid. How many weeks depends on where you live, and what you're eligilble for. But numbers like 5, or 8 or 11 weeks are not uncommon. You will need to have enough cash saved to tide you over for this period. (The community-welfare people can give you an advance on likely benefit, but you can't guarantee that they WILL do so. And these days, there's a waiting list even to see them!)

stepbar

I'm sorry but getting into debt is not stupid unless you have a reason for same (i.e buying a car). What I would say is that you talk to your bank and have it out with them. At the min the banks want to get back their debt. So if you argee to pay interest they maybe agreeable. But you need to talk to you bank first.

pog it

Any chance you can consolidate the two loans? And make the one payment per month as big as you can afford before February, and in the awful scenario that you do lose your job then and hey you may noT!, then you could reduce the amount you repay and stretch it over a longer period.

gogo

eth0_ wrote: »

When you say your contract might not be renewed, do you mean you are a contractor, or are you referring to a probationary period in a full time job?

If you are in a full time job then you should take out payment protection insurance ASAP. This will cover your repayments in the event you are made unemployed.

Unfortunately this cover doesn't apply if you are a contractor, due to the unstable nature of your employment.

Just going to suggest the same thing, talk to your bank about this, its good advice and something you can do now.
There are lots of terms and conditions tho, I think there is something in there about 'prior knowledge' of redundancy as well, so you mightn be eligable, there is definatly clauses about contract work. Talk to your bank.

partyguinness

eth0_ wrote: »

When you say your contract might not be renewed, do you mean you are a contractor, or are you referring to a probationary period in a full time job?

If you are in a full time job then you should take out payment protection insurance ASAP. This will cover your repayments in the event you are made unemployed.

Unfortunately this cover doesn't apply if you are a contractor, due to the unstable nature of your employment.

Most Loan Agreements that I have seen stipulate in the T&C that you most take out Payment Protection from the start of the loan. Therefore you cannot start half way through as such. Check the T&C.

john davis

i have been to mountjoy on the 12/06/ 09 for a cedit card debt for 5 days .and they still
want the money. but i hear thats changed

dobsdave

Can you give some more detail? (John Davis)

RangeR

john davis wrote: »

i have been to mountjoy on the 12/06/ 09 for a cedit card debt for 5 days .and they still
want the money. but i hear thats changed

Indeed, I believe a person can no longer be jailed for being poor. It came up a few months ago.

who what when

What do you have to show for that debt?
In other words what assets do you have?
If its an expensive car, trade down. Maybe you bought gold, diamonds, platinum whtaever, surely you have something to show for your €20,000+ debt and whatever it is get rid and pay off the loan

john davis

BuffyBot wrote: »

Well you won't be going to prison that's for sure. Things have moved on a bit since Dickensian times

Solid advice from others - eliminate what you can now, while your working and then when you know for certain that your work situation is about to change, approach the lenders and talk to them. No point storing trouble just yet when you don't have an accurate picture of your future to present to them.

i was put into mountjoy for 5 days for a credit card debt on june this year and they still
want the money 5800 .any info

john davis

dobsdave wrote: »

Can you give some more detail? (John Davis)

sorry first time on the boards what details do you mean

digital_d

AFIK the law is still unchanged since this article was written at the end of January this year:

http://archives.tcm.ie/irishexaminer/2009/01/30/story83274.asp

D

Toots

Please do not discuss any details of a legal case that is still ongoing.

dobsdave

john davis wrote: »

sorry first time on the boards what details do you mean

I mean what are your circumstances? employed/unemployed, couldn't pay monthly installments,ignored the debt etc.

Toots

Toots* wrote: »

Please do not discuss any details of a legal case that is still ongoing.

john davis wrote: »

sorry first time on the boards what details do you mean

dobsdave wrote: »

I mean what are your circumstances? employed/unemployed, couldn't pay monthly installments,ignored the debt etc.

If this case is still ongoing (which it would seem to be if the bank are still looking for their money back) it is not to be discussed on this forum.

djk1000

Talking in general terms (not about a specific case), if you owe money, you have to pay it. If you go to jail, it's not because you owe money, it's because you failed to meet payments set down by a judge calculated on your ability to repay. If you didn't turn up in court, then the judge is winging it as to how much you can afford.

Thinking that going to jail is an alternative to paying what you owe is crazy, that's not how the world turns, lots of people would probably choose a 5 day spell in jail if they could walk away from their debts!

The law that sends debtors to jail was deemed unconstitutional by a judge, this set a precedent. The government has since passed a revised law that they believe to be constitutional and still includes the possibility of jail time.

O.P. don't put extra money off the loan now, any extra you have should be saved as a buffer. The moment you know that you'll be unemployed, WRITE to your creditors and ask for response in writing. Tell them the situation, ask them to freeze interest and payments until you have assessed your financial situation. Once you have jobseekers sorted and you've cut out all unnecessary spending you can make a reasonable monthly repayment offer. Creditors will accept this if it is backed up with a personal budget with realistic expenses. Remember that if they take you to court and you engage honestly with that process, the judge will not be unreasonable and the creditors won't get a better deal for themselves than they would by listening to you..

DO NOT make any offer that you are not absolutely certain of keeping up with, this more than anything leads to trouble down the line and never ignore communication from your creditors, even if your response is just an acknowledgment of their letter.

If you are being unduly pressured by a creditor, or if they get a debt collector involved, then get on to www.mabs.ie

Mabs also has some template letters that you can use with your creditors

Hope that's useful!

Mr.888

techie1981 wrote: »

Hi All

I am just looking for some sensible advice if anyone out there can help!

A few years ago when I was young and very stupid I managed to get myself in to debt with 2 personal loans...at the moment one of them has €13,500 remaining and the other around €8000 and I am keeping up with the payments after putting myself on a very strict budget and stopped spending like a fool!

There is a very good chance that my contract will not be renewed in work when it is up for renewal in Feb 2010 due to the recession and nothing else.

I am now looking for advice on what is best to do about these personal loans? I will obviously continue to pay these whilst I still have a job but I am just wondering should I approach the 2 lenders in question now and tell them about this or what is the best thing to do? I am terrified of what will happen when if I lose my job and don't want to end up getting a prison sentence for it!

If anyone has any advice I'd appreciate it!

Many thanks, John

Thats not much debt compared to a huge mortgage, dont worry, if brought to court could work out better for you than the bank, as the judge will understand and probably make you pay €10 a week from your dole money.
what else can they do? put you on the game lol