BR or IVA? and voluntary repossession

terr123

Hi Folks,
I was glad to come across this forum as there seem to be friendly, helpful people on here! This is my situation:

Own business that didn't do very well
Divorce with crippling maintenance
Went back into salaried job 4 years ago, but was earning much less than my outgoings, so debt - particularly on credit cards rose.
Gradually got into a position where I have a good income, but...
took out a 125% mortgage with Northern Rock two years ago. The house is currently worth roughly what I paid for it, but is expected to lose £10-15k over the next 12 months
I currently have debts of about £70k including £28k on unsecured element of Northern Rock mortgage
Although my salary is just short of £2k per month net, my outgoings (particularly credit cards) far exceed this.
This situation has certainly not come about through living the high life, but more by trying to survive after divorce and a bad business.

I have been advised by a friend who deals with company insolvency that BR is the best option, though a BR solicitor friend of his who gave me some free advice also mentioned IVA
I am wary of IVA because it is 5 years rather than the 3 of bancruptcy and seems less flexible (if I lost my job, for example - which is by no means secure)

The crazy thing is that, although I am horribly overstretched, I have managed this debt so well over the last four years that my credit file looks brilliant - no missed payments. This is mainly by robbing Peter to pay Paul.

I am considering voluntary repossession, then bancruptcy. My biggest fear is that I will secure a rental property beforehand with money borrowed from parents and then be thrown out of it when the OR informs the landlord.

I have read through many of the threads and they have been REALLY helpful. What can I expect? Any advice or comment would be very much appreciated.

Dez-Titute

Oh Terr

Welcome to the board.
same old same old ,You are not the first and you will not be the last.

Please contact one of the debt charities ie CAB,CCCS or NDL##
But you will always be welcome here

terr123

Thanks Dez,
I realise it's the same old story and that people go through it every day, so in that respect, I am no as worried as I otherwise might be - especially after reading the experiences of others on here.

I completed the CCCS online thing today and it recommended IVA, but I am going to try giving them a ring tomorrow.

peachyprice

Hi Terr, and welcome.

You need to seek advice from one of the debt charities as to which is the best way forward for you, as Dez said above.

If you do decide on BR and voluntary repo and move out into a rental property you can stop paying your all your creditors for a couple of months before and use the money for your BR fees and setting up your rental. Don't borrow from your parents as you won't officially be allowed to pay them back, as that would be favouring them over your other creditors.

If you do take this route it's unlikely a landlord would ask you to move out once you're settled and they know you are paying the rent.

terr123

Took your advice, someone from CCCS is ringing me back in early August. I have decided to get rented accommodation with a view to a Voluntary Repossession of my house. Spoke to a couple of estate agents that have rental property that I am interested in and they pretty much didn't seem to think that there would be a problem with bancruptcy and renting, provided I could pay 6 months rent upfront. By stopping paying my mortgage and other creditors, I can just about do this at the end of the month.

Should I send the keys back to the mortgage provider or hand them over to the OR?

blind-as-a-bat_2

terr123 wrote: »

Hi Folks,
I was glad to come across this forum as there seem to be friendly, helpful people on here! This is my situation:

Own business that didn't do very well
Divorce with crippling maintenance
Went back into salaried job 4 years ago, but was earning much less than my outgoings, so debt - particularly on credit cards rose.
Gradually got into a position where I have a good income, but...
took out a 125% mortgage with Northern Rock two years ago. The house is currently worth roughly what I paid for it, but is expected to lose £10-15k over the next 12 months
I currently have debts of about £70k including £28k on unsecured element of Northern Rock mortgage
Although my salary is just short of £2k per month net, my outgoings (particularly credit cards) far exceed this.
This situation has certainly not come about through living the high life, but more by trying to survive after divorce and a bad business.

I have been advised by a friend who deals with company insolvency that BR is the best option, though a BR solicitor friend of his who gave me some free advice also mentioned IVA
I am wary of IVA because it is 5 years rather than the 3 of bancruptcy and seems less flexible (if I lost my job, for example - which is by no means secure)
The crazy thing is that, although I am horribly overstretched, I have managed this debt so well over the last four years that my credit file looks brilliant - no missed payments. This is mainly by robbing Peter to pay Paul.

I am considering voluntary repossession, then bancruptcy. My biggest fear is that I will secure a rental property beforehand with money borrowed from parents and then be thrown out of it when the OR informs the landlord.

I have read through many of the threads and they have been REALLY helpful. What can I expect? Any advice or comment would be very much appreciated.

That statment alone says an IVA is not for you, you have to be as sure as you can be that your income is stable and will be before entering an IVA, as all money you will have paid is lost if it fails due to loss or reduction of income.

If your employment isnt guarenteed (and lets face it who,s is) an IVA is at best a risky move at worst a very big and expensive mistake.

As for renting, in 14 months posting on here and elswhere, ive only read of two that where asked to leave because of there BR, so i cant say it doesnt happen, but it is very rare by the evidence ive seen, also i have seen many get a rental property after BR, granted this was made harder, but they managed it anyway

k2nga

Yeah i was just going to say that i would say that BR is for you. If you can afford the 6 months rent up front that is good but you could also ask the LL if they would accept a gaurantor and you could ask your parents to do that for you?

Just check with the landlord that after the 6 months that you just pay monthly from there on in as i remember reading a post on here where the LL asked for 6months up front everytime.

SuzySu

So glad I came across this post as this is exactly where I am at the moment ie. considering BR and voluntary repossession.

Good luck to you Terr123 and I hope it works out for you.

sandywindsor

Good luck Terr,I want to move to rented but unable to at the moment due to unemployment:mad: I have got a guarantor......just have to keep job hunting