short term debt consolidation

foureyes

Hi, does anybody have any suggestions regarding debt consolidation loans. We have credit union loan, bank term loan, credit card debt and car loan (all with different financial institutions) All short term debt - approx €60000 in total - we own our own house - mortgage free (valued at €270000 conservatively) Tried to stay debt free after selling our last house about 8 years ago, hence no mortgage. But the debts/ loans slowly built up as a result of me becoming unemployed a couple of times, my better half has always been employed by HSE ( nurse for 13+ years, permanent and pensionable) and I have started working for HSE about 6 months ago. We have never defaulted or missed payments on loans but current monthly outgoings - servicing our debts is crippling us - approx €1800 per month. We can plug away as we are currently but life is tough ( no social life or holidays and feel as if we are working for local petrol station and mechanic. 2 cars needed and fuel costing €100 per week and tyres / servicing coming around too regularily.
Any help / suggestions would be really appreciated regarding who or where to apply for a loan to consolidate / restructure our current debt. We have previously approached our bank (BoI) who said that they wouldn't consider external debt.
Thanks

phormium

Most banks do not want to take on other bank debt certainly not on an unsecured basis. Your only option for this amount of debt would be to mortgage the house, again though the banks may not go for this as it doesn't show great money management to end up with 60k of unsecured debt, I know there are reasons but the bank just mainly looks at the figures.

What about the credit union? They are usually more open to listening to personal stories rather than saying 'computer says no', would it be an option with them to borrow the full amount to clear all debt on the basis of a secured loan on your house. The rate will be higher than a bank mortgage and the term offered will be shorter but that is no bad thing as otherwise you will be paying for those cars for example long after they are gone and you have another new car loan.

If it is a bigger credit union they may be open to a proposal like this, some of the smaller ones don't do what is in effect a mortgage but larger ones definitely do, it's just the reason for it they may be dodgy about, consolidating debt kind of died with the tiger but I think if there is any hope it might be with credit union.

foureyes

Thanks Phormium, I know we didn't do the best job of managing our affairs . At the time 2007 our credit union manager advised to us to not take out a mortgage while building our current house and to use the proceeds from sale of last house. Personally I believe, now, that we should have taken out mortgage for about €150k at the time and put our own cash into an account. The same Credit union manager hasn't been remotely helpful since, so I think going back to him would be a total waste of time.

phormium

Well if he shoots it down you could write a letter asking for it to be referred to the credit committee or to the board at next meeting and state your case in the letter. It won't make you popular with him but do you care?

Alternatively is there another credit union that you would be eligible to join based on common bond, is there one near work or attached to work. What about the HSE, do they have affiliation with a credit union? Even though you would be new member there are always exceptions to the usual requirements re length of savings etc, especially if you are an employee where they can just take repayments from your salary before you ever get it and also remember you are offering the house as security, you haven't a hope of borrowing that much otherwise