Q. I am overwhelmed with debt. Three credit card balances, a mortgage in arrears for the last 8 years, three personal loans between two credit unions and a bank plus I owe several family members sums of money ranging from € 500 to € 2,300 ! I was in the hospitality business and never thought it would go on this long. Have you any quick fix ideas to get me back on track ? Thanks Jim – Portmarnock Co Dublin
A. Thanks Jim yes it has been a very difficult few years between the recession, pandemic, the wars and cost of living crises. There is a quick simple way of looking at your debt pile – the Avalanche system is a sure-fire way to pay them off quickly…. This is what you do – three steps…
- Rank your debt in order of highest to lowest APR interest rates
- Once you have paid off the highest interest loan, the money that was being paid off this loan goes to the next highest loan until that is paid off
- So while you are still paying the same total monthly payments each month, once the highest loan is paid off, the next debt has a larger amount of money to pay off the next highest loan because it has added that paid off loan repayment to the next highest loan’s repayment.
You may have to write to some creditors to ask some forbearance, but they mostly will oblige especially if they know that down the line they will be repaid. If you have serious debt issues, please do not be afraid to drop in on any MABS office or contact the Insolvency Service of Ireland (www.backontrack.ie). They really are there to support.