AIB CC Debt - ICB implications - how serious is it?

tech bro

Hi folks,

My CC debt with AIB had been going on for the past 2.5 years. Last January I've canceled the card. My credit card debt is relatively small, only 2 k. I am a student for the past 3 years and now doing unpaid work experience as part of my studies. I have managed to reduce the debt slightly from the original amount but I cannot pay it off in 1 go unfortunately. I have calculated that I have paid AIB more then 1 k of interest on this CC debt already and for the past year or so I am just paying my minimum payment of EU 50 every month but it doesn't improve the situation at all. I have been engaged with AIB since January this year and tried to come to some sort of agreement with them. I explained my circumstances, e.g. I am in arrears with ESB and have another 4 k loan repayment in CU. I offered AIB to stick to my commitment of EU 50 a month but asked them to stop the interest for the time being until my circumstances improve, but they do not want to listen. I've sent 3 registered letter and several emails with my proposal and havn't got a single response, not even an acknowledgement of my letter, not to mention the fact that they are extremely difficult to deal over the phone, credit control section seem to have a standard script response to most of my questions. I have missed 2 payments since March and they are now threating me again to be reported to ICB (deadline to come to agreement is this coming Wed 10/08/2011). The interest will be stopped if I reported to ICB and I will be dealing with debt collectors and solicitors as far as I know. I have the copies of all the letters and emails sent to AIB since January 2011 (e.g. I did explain my circumstances and offered very reasonable solution, e.g. keep repaying the debt providing they stop the interest), so I am not too concerned if I ended up in court as I have the evidence of being engaged and committed to settle the matter the best I can. I am, however, concerned with the impacts of ICB on my future credit needs, mainly mortgage in the next 3 or 4 years.
At this point I have 2 options: 1.keep paying the interest, or 2.let them report me to ICB.
I've maid all reasonable efforts to deal with the debt for the past 2.5 years, I had offered very reasonable solution which they didn't accept, I do not know what else to do.
I had made it clear to AIB that I am committed to repay the debt, not walk away from it, but their response is simply black and white: repay in full (which I cannot); keep paying minimum payment (it's been long 2.5 years and I don't see any point to keep giving them free money out of my pocket any longer, I am living on the breadline for the past year or so...); or simply default and deal with debt collector/solicitors (might be the only option at the mo).

Extra info: I have tried to get a top up loan from CU but providing the fact I am a student, I already have a loan there and my only income is social welfare they cannot assist. I have also tried to take a 9 month 0% credit from alternative institution MBNA, but they do not open accounts for students. So these options are out of question unfortunately.

Having explained all this I have two questions:

1. How serious is the implication of being reported to ICB ( I presume I am already there anyways for missing couple of CC payments or late payments for the past few years) when applying for mortgage in the next 3 to 4 years providing the fact that I will repay the full amount of CC debt in foreseeable future in a lump sum when I come back to employment again. I realize that 2 k is a relatively small amount to get urself into trouble but I have no other choice I guess.

2. I would like to ask your opinion on this speculation ? Had anyone been in similar circumstances before (default on ur debt first and repay in full later when financially viable) and managed to get a credit again ? B.t.w. I spoke to a friend of mine who is junior account and he said that many people are in the ICB list already for all sort of things (minor and major) and I am most probably reported for missing payments anyways, so being reported again would not do much damage providing the fact that I will repay the debt in full when I get a job ( the ICB record will be rectified as "debt settled" ). E.g. I have ordered my ICB report and will look at this in a few days, just curious whats there?

If anyone been in similar circumstances please let share your thoughts folks.
Thank you very much for your advises.

callaway92

Is there any way you could borrow money from your parents? Maybe 50% of the current Credit Card bill. Your Credit Rating in the future is going to be a disaster if you don't start paying more than €50 a month off.

All of this leads to difficulties getting money for Future Loans/Mortgages etc.

It is difficult though, for a student and they are putting seriously unneeded pressure on you for only €2,000. Maybe go into your local branch and ask to sit down with someone from there and hopefully they'd help you as much as they can.

tech bro

Hi folks,

Any input on this matter is appreciated. have to make a decision and just looking for an advise if anybody else been in similar circumstances. Thank you folks.

MagicMarker

Just keep on paying 50 a month, yeah it sucks that it's only covering the interest but this is what you signed up for when you applied for a credit card.

Mr. Loverman

AIB are not being unreasonable. You are the one who is choosing to not pay back the debt. It is not AIB's fault you have chosen to be a student and have no income. So really you need to stop feeling sorry for yourself and accept responsibility for your situation. Regarding your credit history, it will be damaged for 7 years. This means no loans or mortgages. You should try to get a loan from a family member or friend to pay off your debt.

tech bro

Mr. Loverman wrote: »

AIB are not being unreasonable. You are the one who is choosing to not pay back the debt. It is not AIB's fault you have chosen to be a student and have no income. So really you need to stop feeling sorry for yourself and accept responsibility for your situation. Regarding your credit history, it will be damaged for 7 years. This means no loans or mortgages. You should try to get a loan from a family member or friend to pay off your debt.

Thanks for your response, but my question is of a different nature, I am accepting the debt and I am willing to pay it off once my financial circumstances improve, e.g. get back to the employment (say in 6 to 12 months time). I am wondering what are the consequences when you have been reported to ICB and you've have paid your debt subsequently (e.g. your record is marked as "settled"). Would there be a possibility for a loan/mortgage from a financial institution once you have cleared your debt, say in a space of 1 to 2 years afterwards ??? Thanks for any input folks...

Mr. Loverman

Hi tech bro, please re-read my post, I answered your query.

Mr. Loverman wrote:

Regarding your credit history, it will be damaged for 7 years. This means no loans or mortgages.

The slate will be wiped clean after 7 years. Note this may be 7 years after the debt is settled.

dublin daz

Mr. Loverman wrote: »

Hi tech bro, please re-read my post, I answered your query.



The slate will be wiped clean after 7 years. Note this may be 7 years after the debt is settled.

Its 5 years after the account is closed, not 7.

http://www.icb.ie/credit_rating.php#q02

Mr. Loverman

dublin daz wrote: »

Its 5 years after the account is closed, not 7.

http://www.icb.ie/credit_rating.php#q02

Yes you are correct, it used to be 7.