Financial Mess

LegacyUser

Firstly let me start off by acknowledging that I understand that there are many more people in far worse dire straits than me but I've gotten myself into a mess and I haven't a clue how to get out of it. Over the past 5 years I've managed to accrue roughly 5000 euros worth of debt. I did so through study fees, helping family etc.

I have a full time, permanent job in which I get paid roughly 700 fortnightly. From this I need to pay rent (over 300 euros a month), electricity, travel, etc. All the usual bills we all have to pay. The debt I have accrued is split like this:

- 1,500 Euros on a BOI credit card: I do my best to pay at least the minimum charge monthly but occasionally I am unable to do so. BOI have spoken to me a couple of times about late payments and this is a terrible worry.

- 2000 Euros on an Ulster bank loan: Managed to fall into areers at Christmas for a couple of reasons. Of course the usual overspending we are all guilty of at that time of year and secondly a missed payment from work. My wages get paid directly into this account. I'm now in overdraft and have arranged a payment plan to catch up. This payment plan is so crippling that after they take their amount fortnightly I only have enough left to pay my rent and get to work. I've spent quite a few days without food, warmth etc.

- 1,500 Euros Credit Union Loan: So far I've managed to keep up with my payments here. But i'm really worried incase I fall behind.

There really isn't anyone I can turn to to sort this whole bloody mess out and I'm not even sure why I'm posting on here. Any help appreciated.

seamus

It's a matter of budgeting. Lots of people just seem to be really bad at it.

Budget basically involves writing down, "How much do I have, how much do I have to pay before my next payday, and how much do I have leftover" and then sticking to it as best you can.

On the loans in general, consolidation doesn't always work out best, but if you can it may work for you. That credit card balance is the worst and it needs priority. If you can, try extend the credit union loan to €3k and clear the credit card and cut it up. It doesn't reduce your overall debt but it reduces your repayments because of lower interest.

Also look at your regular outgoings - bills and so forth. Can you switch to a cheaper mobile plan or provider? Can you drop to the slowest web package and most basic TV package? Are there cheaper alternatives in your travel budget - such as walking or cycling?
If you answer any of these is "no" simply because e.g. you don't fancy the idea of cycling to work, then you're not trying hard enough.
"I don't want to" is not an acceptable reason for not reducing your luxuries when you're low on money.

Here's a simple budget for you:

Monthly Income...........................€1400
Less:
Rent...........................€300
Elec...........................€100
Phone..........................€40
TV/Web.........................€40
Food...........................€300
Travel.........................€100

Total Expenses.................€880

Total Left Over...........................€520

That left over is what you can afford to throw against your loans. Adjust for your own figures - Electricity, Food and travel may be a little high there. If you know exactly what your bank account looks like this month, then you will think twice before you spend a fiver in starbucks or before you accept that invite to the pub.

It might seem obvious to keep track of your cash, but many people budget solely in their heads and focus on what's sitting in their bank account now (i.e. before the bills have been paid) instead of what will be sitting in their bank account at the end of the month and they make the wrong decisions because they think they have more than they do.

LegacyUser

Go see or ring the below people. They will offer you sound advice and assist you in managing your debt.

http://www.mabs.ie/

hi OP
the problem with minimum payments is that if you only make min payts, you'll never really pay off the debt - interest will accrue fairly quickly.
If at all possible you should get the credit card paid off with a new loan/extension on an old loan and pay that off instead. The rate would be more favourable.

Keep a written day to day budget of everything you spend as well as a monthly budget.

Oryx

MABS are who you should be talking to. They are there to help people untangle financial messes like this.

Other than that, the main thing to do is to talk to the people you owe money to. See if your bank, or the Credit Union will refinance that cc debt as a term loan at better rates, and then cancel the card so you cant run up more debt. Even if they cannot do that, they may come up with a restructured payment scheme you can manage.

Never ignore any demands or letters about your debts. Keeping in communication with your bank and the CU will let them know you are keen to sort this out.

up for anything

Go to MABs. They'll help you work out a more liveable on loan payment plan, intercede with your various lenders and maybe consolidate your debt it it's cheaper to do that. Good luck. Money worries are a nightmare.

Squiggler

You're earning approximately €1400 a month, paying €300 rent, say maybe another €100 for bills.

That should leave about €1000 a month, what are you spending it on? What proportion of that spending is discretionary and unnecessary?

Your first priority should be to get rid of the credit card debt (because of the extremely high interest rates), while continuing to make the payments on the other two loans.

Stop spending money you don't have
Figure out how much you NEED to spend to live (food costs)
Curtail your social life for a few months (stay at home, visit friends at their homes, if you smoke try quitting, or even just taking a break from it, likewise with drink.
Put ALL of the rest towards paying off your borrowing.

Then, with all loans paid off - don't borrow any more

You need to be tough about it for a few months, but when you get to the point when you actually have money, instead of owing it, you'll feel great.

Permabear

This post has been deleted.

R.D. aka MR.D

I just wanted to post to say I was in a similar position to you not so long ago and next week I will be able to make my last payment and I will be debt free.

It took a lot of sacrifice. No nights out and no take-aways and no treats full stop. But i've managed it.

I felt that I was staring into a black hole that was going to consume me. But it is do-able. You will be able to pay it off if you make a commitment to it.

So keep your chin up. You'll make it!