MABS Self Help Tool
The MABS Self Help Tool will allow you to assess your debts, make out a budget and show you how to take the first steps in dealing with your creditors. It takes roughly 45 to 60 minutes to work through the tool.
Self Help Guide:
Instructions
How to use the Self Help Guide
Give yourself 45 minutes to 1 hour to complete the Self Help Guide. Before you start, make sure that you have as much of your financial information to hand as possible. This will include:
- Recent payslips and/or details of your Social Welfare payments
- Recent regular bills, such as your electricity and/or gas bill, telephone bills (land line and/or mobile)
- Recent bank statements
- Receipts for your weekly shop
- Details of your mortgage repayments (if applicable)
- Any correspondence you have received from people you owe money to
If you are working out the budget for your household you may want to go through the Self-Help Guide with your partner. Be sure to ask them for their information including payslips,bills, receipts etc. If there is anything you don't understand as you go through the steps, check our glossary for an explanation.
STEP 1:
Assessing Your Situation
[Task 1 of 3]
Introduction
First, take some time to put together a full list of all the money you owe - this is vital to having a clear picture of your financial situation.
This section will help you to:
- Understand the difference between priority and secondary debts
- Make contact with those you owe money to
- Identify debts for which legal action is pending or has already taken place
Understanding Priority Debts
Some debts are more important than others. Important debts (such as mortgage arrears, rent arrears, fines, and maintenance payments) are called priority debts. These must be dealt with first because not making repayments on them can have serious consequences. Examples of priority debts, and the consequences of failing to make repayments, include:
- If you fail to make mortgage repayments your home may be put at risk
- If you fail to pay your rent you could be evicted
- If you fail to pay your electricity, gas or telephone bills, your service may be disconnected
- If you fail to pay a fine or a civil debt, you could receive a prison sentence
- If you fail to make repayments on a hire purchase loan, your car or goods on hire purchase could be repossessed
Understanding Secondary Debts
Secondary Debts are debts where money has been loaned to you without security and where the creditor does not have extra powers (such as repossession).
Examples of secondary debts include:
- Bank overdrafts
- Moneylender and catalogue debts
- Credit card debts
- Credit sales agreements
- Credit union loans
- Debts to friends and family
- Personal loans with finance companies
You can be taken to court if you fail to keep up the agreed payments on these types of debts. However, as long as you don't ignore the problem and you respond to court documents you will usually only have to pay what you are able to afford.
STEP 1:
Assessing your Situation
[Task 2 of 3]
Write That Letter
It is very important that you contact those you owe money to right away to explain your financial situation. You can do this in person, by phone or by letter - although we suggest making contact by letter so that you have proof of contact with your creditors.
Remember to:- Write to a named person if you know one
- Send it to the proper address
- Check that you have provided the correct reference number
- Keep a copy for your records
Online Letter Template
This template allows you to write and print an initial contact letter to your creditors. Simply fill in the name and address of the creditor and then modify the main text to suit your needs. Once you are finished, simply click the 'Print' button at the bottom of the page.
I am writing to you regarding the above account to inform you that I am currently experiencing financial difficulties and am trying to resolve them.
I am at present assessing my full financial situation, using MABS self help guides, and working out how much I can pay each of my creditors taking into account all of my living expenses and commitments.
While I am doing this, it would be of immense help to me if you would put a hold on any action being taken to recover this debt and if you would suspend any interest and other charges currently being added to this account.
I will contact you again within two weeks with my proposal.
May I take this opportunity to thank you in advance for your co-operation.
Yours sincerely
STEP 1:
Assessing Your Situation
[Task 3 of 3]
Make sure to set aside enough time to fill out your debt assessment sheet accurately. Also make sure you have a clear understanding of priority debts and secondary debts. Next, gather together all the documents necessary to complete your Debt Assessment Sheet. This includes:
- Recent payslips and/or details of your Social Welfare payments
- Recent regular bills, such as your electricity and/or gas bill, telephone bills (land line and/or mobile)
- Recent bank statements
- Receipts for your weekly shop
- Details of your mortgage repayments (if applicable)
- Any correspondence you have received from people you owe money to
Where you do not have the information you require, contact your creditor for an up-to-date statement.
The information provided here will be used in later steps to help determine your repayment schedule. Don't forget to find and check all your original documents and contracts to ensure you are in fact liable for the debts. If you have any questions about this, contact the MABS Helpline on 0761 07 2000.
STEP 2:
Working Out Your Budget
[Task 1 of 6]
Introduction
There is nothing mysterious about creating a budget. However it is one of the most important tasks to be done in addressing your financial situation.
This section will help you to:- Create a budget
- Keep track of your spending using the Spending Diary
- Fill in a budget sheet
- Prioritise your spending
- Possibly increase your income
What is a Budget?
A budget is simply a plan of the money you expect to receive and how you plan to spend it.
A budget will show you:
- How much money is coming into your household
- How much money is going out of your household
- How much you can afford to pay those you owe money to
- How you can best plan your spending in the future
How to work out a personal budget
The Personal Budget Sheet is an essential tool to help you to tackle debt problems and manage your money into the future. The information and tools in this section will help you work out how much you have coming in, and what you have been spending it on. It will also show you how much you have left over to pay your debts.
How to fill out your personal budget sheet
The Personal Budget Sheet allows you to see what your income and expenses are, in a safe and secure environment, on a monthly or weekly basis. It will also show you how much money you can afford to put towards repaying your priority and secondary debts.
Weekly or monthly?
Remember to fill in either weekly or monthly figures on your budget sheet, whichever best suits your needs. Be careful not to mix weekly and monthly expenses - stick to one or the other when filling in your budget sheet. To work out a weekly payment on a monthly basis, multiply the weekly payment by 52, and divide that figure by 12.
STEP 2:
Working Out Your Budget
[Task 2 of 6]
How to fill in your Income Sheet
Add up the income for you and your household. Include:
- Wages and salary after deductions. Only include overtime if you receive it regularly
- Check your tax and tax allowances/reliefs. Visit www.revenue.ie for more information
- Include all the social welfare payments you recieve in the S/W payment sections
- Include your child benefit
- Are you entitled to Living Alone Allowance, Family Income Supplement, etc.? Check with your local Citizens Information Centre
- If you are sick or disabled you may be able to claim a range of illness benefits. Check with your local Social Welfare office or Citizens Information Centre or visit www.welfare.ie
Self Help Guide - Income details
| Income: | |
| Wages/Salary: | € |
| Partners earnings: | € |
| Non dependant contribution: | € |
| Total Wages/Salary: € | € |
| Social Welfare Payments: | |
| My S/W Payment: | € |
| Partners S/W Payment: | € |
| Total Social Welfare Payments: € | € |
| Pensions: | |
| My pension: | € |
| Partners pension: | € |
| Other pension: | € |
| Total Pensions: € | € |
| Child benefit: | |
| Child benefit: | € |
| Other Income: | |
| Maintenance: | € |
| Boarders/lodgers, etc: | € |
| Back to Education Allowance: | € |
| Student grant: | € |
| Other: | € |
| Total Other Incomes: € | € |
| Total Income: | € |
STEP 2:
Working Out Your Budget
[Task 3 of 6]
How to fill in your Expenditure Sheet
How much do you spend each week on basic living expenses? Use the MABS Spending Diary to keep track of your spending.
At this stage, don’t include any debts or arrears or loan repayments. You can organise your spending under these general categories:
- Mortgage (including mortgage protection insurance)
- Rent
- Food and Housekeeping (including groceries, toiletries, cleaning materials, etc.)
- Utilities, such as gas and electricity (bills issue every two months). Multiply the total for your last bill by 6 to get an annual amount then divide that figure by 52 (for a weekly budget) or divide by 12 (for a monthly budget). If your usage is high, you can find out about energy efficiency from Sustainable Energy Ireland at www.seai.ie
- TV licence. Divide the total cost of your TV licence by 52 (for a weekly budget) or divide by 12 (for a monthly budget). This is a priority payment - if you don’t hold a current licence you may be fined
- Hire purchase car loans. If you bought a car for work purposes using a hire purchase type of arrangement, you will need to include these payments in your expenditure or the car may be repossessed
- Clothing and footwear. Estimate how much you spent on clothing and footwear last year and divide the amount by 12 (for a monthly budget) or 52 (for a weekly budget). If you have children, don’t forget the cost of school uniforms
- Education costs. This amount can be high, particularly if you have more than one school-going child
- Telephone: Include only your ongoing bill. If you have been disconnected, treat the bill as an unsecured debt
Make sure you are realistic with your expenditure and only include items that are essential - but do allow something for a social life.
Self Help Guide - Expenditure details
| Expenditure: | |
| Housing costs: | |
| Rent: | € |
| Mortgage: | € |
| Mortgage protection insurance: | € |
| House & contents insurance: | € |
| Property Tax: | € |
| Total Housing Costs: | € |
| Food/Housekeeping: | |
| Groceries: | € |
| Milk and bread: | € |
| Nappies/baby costs: | € |
| Work and school lunches: | € |
| Other: | € |
| Total Food/Housekeeping costs: | € |
| Utilities: | |
| Electricity: | € |
| Heat/Fuel: | € |
| TV licence: | € |
| Water charges: | € |
| Bin/Waste charges: | € |
| Total Utilities: | € |
| Telephone / Other utilities: | |
| Landline: | € |
| Mobile: | € |
| Cable/satellite: | € |
| Broadband/internet: | € |
| Total Telephone / Other utilities: | € |
| Other Important Items: | |
| Other 1: | € |
| Other 2: | € |
| Life insurance/pension: | € |
| Total Other important items: | € |
| Transport Costs: | |
| Transport to work: | € |
| Transport to school: | € |
| Road tax: | € |
| Insurance: | € |
| Petrol/diesel: | € |
| NCT/Maintenance: | € |
| Parking/tolls: | € |
| Total Transport Costs: | € |
| Educational Costs: | |
| School books: | € |
| School uniforms: | € |
| School fees/contributions: | € |
| School trips: | € |
| Other educational costs: | € |
| Total Educational Costs: | € |
| Other Costs: | |
| Childcare: | € |
| Savings: | € |
| Clothing/footwear: | € |
| Total Other Costs: | € |
| Medical Costs: | |
| Dentist/optician: | € |
| Doctors bills: | € |
| Medication: | € |
| Health insurance: | € |
| Other: | € |
| Total Medical Costs: | € |
| Repairs and Maintenance: | |
| Repairs to property: | € |
| Household maintenance: | € |
| Other: | € |
| Total Repairs and Maintenance: | € |
| Other Expenditure: | |
| Hairdressing/haircuts: | € |
| Childrens pocket money: | € |
| Applicance rentals: | € |
| Family outings: | € |
| Lottery: | € |
| Hobbies/pets: | € |
| Gifts (Christmas, Birthdays): | € |
| Club membership / professional subscriptions: | € |
| Cigarettes/alcohol: | € |
| Total Other Expenditure: | € |
| Total Expenditure: | € |
STEP 2:
Working Out Your Budget
[Task 4 of 6]
Now enter your Priority and Secondary Debts below.
STEP 2:
Working Out Your Budget
[Task 5 of 6]
Self Help Guide - Debt Allocation:
| Income: | |
| Wages/Salary: | |
| Total Expenditure: | |
| Money available for creditors: | |
| Total Priority Debts repayment: | |
| Money for secondary debts: | |
| Creditor name: | |
| Arrears: | €0 |
| sum to allocate: | € |
| Creditor name: | |
| Arrears: | €0 |
| sum to allocate: | € |
| Creditor name: | |
| Arrears: | €0 |
| sum to allocate: | € |
| Secondary Debt Allocation: | |
| Creditor name: | |
| Scheduled payment: | €0 |
| Pro rata allocation | € 0 |
| Suggested allocation: | €0 |
| Creditor name: | |
| Scheduled payment: | €0 |
| Pro rata allocation | € 0 |
| Suggested allocation: | €0 |
| Creditor name: | |
| Scheduled payment: | €0 |
| Pro rata allocation | € 0 |
| Suggested allocation: | €0 |
STEP 2:
Working Out Your Budget
[Task 6 of 6]
Standard Financial Statement
| Name: | |
| Address: |
| Income | |
| Wages / Salary: | |
| Social Welfare: | |
| Pensions: | |
| Child Benefit: | |
| Other Income: | |
| Total Income: | |
| Expenditure | |
| Rent: | |
| Mortgage: | |
| Mortgage protection insurance: | |
| House & contents Insurance: | |
| Property Tax: | |
| Food/Housekeeping: | |
| Electricity: | |
| Heat/fuel: | |
| TV license: | |
| Water charges: | |
| Waste charges: | |
| Other Important Items 1: | |
| Other Important Items 2: | |
| Telephone/other utilities: | |
| Life insurance / Pension: | |
| Transport Costs: | |
| Educational Costs: | |
| Childcare: | |
| Savings: | |
| Clothing/footwear: | |
| Medical Costs: | |
| Repairs & Maintenance: | |
| Other Expenditure: | |
| Total Expenditure: | |
| Net Income Calculation: | |
| Income: | |
| Expenditure: | |
| Available Income for Debts: | |
To the best of my/our knowledge this is an accurate record of my/our financial situation at the above date.
Signed:_____________________________________________________________________
Date:___________________________________________________________________________________________________________________
STEP 3:
Dealing With Your Debts
[Task 1 of 2]
How to Make an Offer - Priority Debts
Send a letter to each priority creditor outlining what you can afford to offer along with a copy of your financial statement. Be sure to include the following:
- Your account number or reference number
- Explain why you are in financial difficulties (for example due to sickness, unemployment, or relationship breakdown)
- Tell them when you will be able to start payments and how much they will be. Only offer what you can afford in addition to your normal payment
- Ask your creditor to suspend interest and other charges if appropriate
If your offer is accepted:
- Write to the creditor to thank them for their co-operation
- Make sure you get the acceptance of your offer in writing
- Inform them of the method of payment you intend to use
- Include your first payment
If your offer is not accepted:
- Write again to your creditor asking that your offer be reconsidered
- If your creditor refuses to freeze interest and other charges, point out that your offer was based on interest being frozen - and otherwise the debt will not reduce
- Remember, if your creditor continues to refuse your offer, they will have no option but to bring you to court to enforce their debt
- If your agreement is a hire purchase agreement and you have paid back one third of the loan your creditor cannot automatically repossess the goods without a court order
Other Debts
As with your priority debts it is best to communicate with creditors about secondary debts in writing, enclosing a copy of your financial statement. In some situations creditors may have sent the debt to a debt collection agency. If that is the case, write to the debt collection agency and send a copy to your creditor as well.
How to make an offer - Secondary Debts
Send a letter to each secondary creditor outlining what you can afford to offer, along with a copy of your financial statement. Be sure to include the following:- Your account number or reference number
- Explain why you are in financial difficulties (for example due to sickness, unemployment, or relationship breakdown)
- Also explain that the payment offer you are making is on a pro-rata basis
- Tell them when you will be able to start payments and how much they will be. Only offer what you can afford in addition to your normal payment
- Ask the creditor to suspend interest and other charges if appropriate
If your offer is accepted:
- Write to the creditor and thank them for their co-operation
- Make sure you get the acceptance of your offer in writing
- Inform them of the method of payment you intend to use
- Include your first payment
If your offer is not accepted:
- Write again to your creditor asking that your offer be reconsidered
- Include with the letter a payment in the amount you offered
- Tell the creditor if your offers to other creditors have been accepted
- If you creditor refuses to freeze interest and other charges, point out that your offer was based on interest being frozen - and otherwise the debt will not reduce
- Remember that, if your creditor continues to refuse your offer, there is nothing they can do to get their money without going to court
Note:If your agreement is a hire purchase agreement and you have paid back one third of the loan your creditor cannot automatically repossess the goods
STEP 3:
Dealing With Your Debts
[Task 2 of 2]
Write That Letter
It is very important that you contact those you owe money to right away to explain your financial situation. You can do this in person, by phone or by letter - although we suggest making contact by letter.
Remember to:- Write to a named person if you know one
- Send it to the proper address
- Check that you have provided the correct reference number
- Keep a copy for your records
Online Letter Template
This template allows you to write and print an initial contact letter to your creditors. Simply fill in the name and address of the creditor and then modify the main text to suit your needs. Once you are finished simply click the 'Print' button at the bottom of the page to print your letter (remember to print 2 copies, and keep one for your records). We recommend that you send this initial letter to your creditors by post.
You can also download a Microsoft Word version of this letter at the bottom of the page.
Print
We would recommend that you print and post your initial letter to your creditors.
Dear ____________________
Further to our recent correspondence, I am writing to advise you that I have now completed a full assessment of my current financial situation taking into account all of my living expenses and commitments.
In my efforts to address my situation I have used MABS self-help guides to work out affordable proposals.
As a result I am now putting forward an offer of €_________ per week/month as being realistic in my current circumstances. If my circumstances change and I can increase this offer I will contact you immediately.
In the meantime, I hope this proposal will be acceptable to you. I would be grateful if you would suspend any interest and other charges being added to the account to help me resolve my difficulties as soon as possible.
I look forward to hearing from you.
Yours sincerely
STEP 4:
Manage Your Payments
[Task 1 of 1]
Introduction
Once you have made your budget and decided how much you need to cover living costs, arrears and credit commitments, the key to staying in control is to find the cheapest and most convenient way to pay as many of your debts as possible when you receive your weekly or monthly income.
- Choose a method that is not time consuming. If possible, set up a bank account in which you can deposit on a weekly or monthly income basis to pay your utility bills and other credit agreements
- If you are paid weekly, then make a weekly budget. Put aside the weekly portion of the amount you will need to your weekly, monthly or yearly bills
- Choose a method of paying your bills that is the most convenient - choose a service that is near to where you live or work
- Shop around for the cheapest method -some services may charge a fee
How to Pay Creditors
Direct Debit:
You can pay your mortgage and other bills through a direct debit facility in your bank. Some banks charge a fee for this, so shop around for the option with the cheapest bank charges.
Internet Banking:
You can set up a facility on the internet to pay your utility bills as well as your credit card and loan repayments. Your bank or utility supplier will supply you with the information necessary to set this up.
Bill Pay
This is a free service for paying bills at your local post office. Enquire at your local post office for more detail.
An Post Household Budget Scheme:
If you receive a payment from the Department of Social Protection you will have the option of making your Local Authority mortgage or rent payments through An Post. These payments are taken directly from your allowance before you receive it. You can also pay some utility and phone bills in this way. The scheme is available to many types of Department of Social Protection payments, but not all, so check with your Social Welfare office. (Note that the maximum that can be deducted for bill payment is 25% of the total amount that you receive.)
If you miss a payment :
- Contact your creditor immediately
- Tell them why you missed the payment
- Try to pay that missed payment in full on the next payment date or ask the creditor to spread out the missed payment over a few payments
If your situation changes :
- If there is a change in your circumstances and you are unable to keep to the payment plan you have agreed with your creditors, then contact them immediately
- Contact them (preferably by letter or email) outlining the details of your new circumstances, how long it is likely to last and how much you can offer to pay now
- Ask for this new offer to be accepted for a set period, usually 3 or 6 months
- If you have been paying by direct debit, be sure to cancel the direct debit at your bank or change it to reflect your changed circumstances
- If your circumstances change for the better and you can pay more, contact your creditors with an improved offer