31K in Debt - How can I climb out of this debt hole?

[don1964]

@buzzard I ignored my credit card bills ,,,,,,,,,,, blocked all bank phone numbers relating to bills by marking them as spam .......... ignored all mail sent by CCard company ....... 5 months later a debt collection company rang me to say they now owned my dept and how much would I be able to pay per month I chose as little as I could after they told me I only owed the original amount ,less all interest so if u 5000 plus 2000 interest you know only owe the 5000.

3 of my friends did the same after I told them
Hope this helps a bit ....... PS I owed 9580 only had to pay my original 6000

 

[2ndprizepopple]

@don1964 Yeah but this also goes on your credit history for a number of years where you probably won’t get a loan or any financial product

 

[don1964]

@2ndprizepopple No it doesn't because the bank get their full money and so your clear normally before it's due time

 

[forestux]

@buzzard Do you have a mortgage on the property you own?

 

[buzzard]

@forestux

Do you have a mortgage on the property you own?

Property I own is abroad, no mortgage on it, I cleared it a couple of years ago. Unfortunately it is in a country where cost of living is significantly lower than here, so geo-arbitrage is working at my disadvantage.

I considered to sell the property to someone else instead of than my tenant. I am not too attached to it, but I would prefer not to give him the notice. Anyway it is still something I am pondering.

I reckon I am paying in the region of 500/600 just in pure interest which is the part which is frustrating me the most.

I would rather get some extra income somehow rather than relocating to a cheaper accommodation, which anyway it is not excluded

 

[forestux]

@buzzard Have you looked into some kind of equity release on your property?

 

[buzzard]

@forestux Having my income here and the property abroad makes my position weak on both countries. 10/15 k would be sufficient to make my situation bearable

 

[forestux]

@buzzard Wouldn't think this be straightforward but specialist advice could help you find a solution. 20k would transform your situation. Do you have any family or relatives connected with your property that might take a half share or anything like that?

 

[buzzard]

@forestux

Do you have any family or relatives connected with your property that might take a half share or anything like that?

Well I could (should?) ask for help (low rate loan) within my family. That would be probably a good financial decision, I have just to accept the psychological cost

 

[forestux]

@buzzard Well only you know the downside of doing this but personally I would go this route. Get rid of those cards and the monkey on your back.

 

[killalljewishpeople2934]

@buzzard I think the big problem is that you have too many things. Not just the amount of debt. The number of different things is causing you stress also as you are having to juggle them all.

Taking your list:

Bank1 Loan - Outstanding balance: € 12.000 @ 10.9 % (monthly repayment 386)

Bank2 Loan – Outstanding balance: € 200 @ 13.4 % (monthly repayment 105). Final payment end of November

Bank3 Loan – Outstanding balance: € 1800 @ 0 % until Feb'24, 20% afterward (monthly repayment 100).

Avantmoney – Revolving Credit Card – Outstanding Balance € 7000 @ 20% (min repayment 180)

Foreign Credit Card – Revolving Credit Card – Outstanding Balance € 6500 @ 18 % (monthly repayment 210)

Bank1 - Agreed Overdraft € 2500 @ 15%

Bank2 - Agreed Overdraft € 1000 @ 15%

You ideally want to add another 6k to your Bank1 loan. Then use that to pay off - Bank2 loan, Bank3 loan, Bank1 overdraft, Bank2 overdraft. Then cancel Bank2 overdraft facility.

So you are now down to:

Bank1loan - €18,000 - monthly repayments the same, €400, just repaid over longer time period

Avantmoney - €7,000 - existing repayment €180.

Foreign Credit card - €6,500 - existing repayment €210.

Instantly thats now vastly easier to conceptualise. You only have to keep track of three repayments a month instead of seven. You also have the backup of the unused overdraft with Bank1 in case things go wrong. Plus you are making €200 a month less in repayments.

That €200 a month needs to go only to AvantMoney. You need to focus on one debt at a time and learn the joy of seeing it being paid down. So now rather than just paying off the interest on this you are seeing it actually fall. Try to get the monthly repayment on this up towards €700 - so scrounge up a few hundred extra from somewhere. Your income should support this. If you moved into shared accommodation you would have this up over a grand in monthly repayments and its fully done and you're on to the second credit card before the summer of next year.

Consolidate then pay off. Good luck!!

 

[confundido]

@killalljewishpeople2934 This feels intuitive but surely it's not the best solution? OP should calculate which loan is incurring the largest monthly interest and 100% focus on paying that off while doing nothing more than minimum payments on the rest, and once that is cleared move on to the next highest, etc.

Your suggestion might reduce stress a little by simplifying the variables but it costs more. You are leaving the two credit cards - generating 1400/year and 1170/year, respectively - until last, while prioritising, for example, a loan that is 0% interest until February next year.

 

[buzzard]

@killalljewishpeople2934

I think the big problem is that you have too many things. Not just the amount of debt. The number of different things is causing you stress also as you are having to juggle them all.

you are correct saying that all those moving parts are generating additional stress, and I admit it affected my wellbeing/mental health. This is basically my sole/main underling thought in the back of my mind for months and months.

Said so, part of the mess (created by me anyway) is due to the fact those elements are spread across 3 jurisdictions: 1,2,4,6 are in Ireland, 3 in UK and 5,7 in the foreign country where my rented property is