Help needed (again!)

DeepintheRed

I posted my SOA recently - see link - and have received fantastic support form everyone here ...

http://forums.moneysavingexpert.com/showthread.html?t=1028635

I've now heard from Payplan that due to the excess expenditure over income the best (only?) course of action is to make Informal Arrangements with my creditors. As yet, I haven't missed a regular payment so we don't actually owe anyone anything - that time will come! - and now I've been offered a family loan (£10K) to help with things. The house is for sale but there's both a mortgage and secured loan to pay off on it resulting in negative equity although one of the Debt Management firms (fee-charging of course) says the balance of the secured loan could become unsecured when/if we sell and added to an IVA.

I have a number of personal pensions that I think I could release to get 25% value (hopefully around £15-20K) which I could use towards the debt and I am also selling my car (say £5K). The secured loan PPI is also due to pay 25% rebate in September (about £3.5K)

So my question after all this rambling is ... how best to approach things? Leave everything unpaid and then make offers based on my liquidated assets or use the £10K to struggle on for another 10 months or so and pay more of the debt off on time?

Any help would be gratefully received.

rubydoiwannabee

Hi there,
sorry I can't offer to much advice but I'm sure some of the experts on here will. Just one point... I wouldn't rely on the pensions, I think I am right in saying if you stop paying you still have to leave the pension pot there, you can't cash it in until retirement. Anyone else have a view?

tyllwyd

Can this family member afford to lose their £10K? If they can't, then I would say don't take their money, because you cant be 100% certain that things won't get worse, and their money will be lost. At least at the moment everything you owe is to commercial companies, so there isn't the same guilt if you don't repay them in full, and options like bankruptcy and IVA stay open to you. Once you borrow from family, things get more complicated.

About the pension - I don't think ruby is completely right, so if you are over 50 you might be able to get some cash out (with an impact on your future pension, of course). Have you had professional advice on this?

DeepintheRed

tyllwyd wrote: »

Can this family member afford to lose their £10K? If they can't, then I would say don't take their money, because you cant be 100% certain that things won't get worse, and their money will be lost. At least at the moment everything you owe is to commercial companies, so there isn't the same guilt if you don't repay them in full, and options like bankruptcy and IVA stay open to you. Once you borrow from family, things get more complicated.

About the pension - I don't think ruby is completely right, so if you are over 50 you might be able to get some cash out (with an impact on your future pension, of course). Have you had professional advice on this?

I'm over 50 (just!) so I can take the pension release route ... although I've been told that the cash might not be as much as it looks on paper. In my position anything's better than nothing though so I'm waiting for the offers from the pension companies to arrive.

I guess having money from my car and Picture if we hang on long enough will also help - but I daren't just make a final "take it or leave it" offer - so IVA is looking a better option in the long run:eek:

Debt_Free_Chick

Did you revise your SOA then?

According to the link you had a deficit

Or did Payplan ignore your secured loan repayments of £601 and deem you to have a surplus of £475, to be split between all your creditors?

DeepintheRed

Debt_Free_Chick wrote: »

Did you revise your SOA then?

According to the link you had a deficit

Or did Payplan ignore your secured loan repayments of £601 and deem you to have a surplus of £475, to be split between all your creditors?

No Payplan just took the SOA as read - deficit meaning they couldn't help. Shame really - if I thought I could "ignore" the secured loan, that would be a helpful course of action. Don't think that would be possible though?!:eek:

RAS

Can you get your SOA into the balck, or even by cuting expenses and then talk to them again?

dancingfairy

What about CCCS or CAB ? do they not have slightly different guidlines - ie what's acceptable in terms of repayment to creditors is slightly different?

Debt_Free_Chick

DeepintheRed wrote: »

No Payplan just took the SOA as read - deficit meaning they couldn't help. Shame really - if I thought I could "ignore" the secured loan, that would be a helpful course of action. Don't think that would be possible though?!:eek:

So sorry - although I read your OP several times, I kept reading "excess expenditure over income" as excess income! :doh: :doh: :wall:

Back to your original question .... looking at your SOA, have you been here before? Are the secured loans the result of consolidating old unsecured debts?

I don't see anywhere in your SOA that could find the £1200 you need to keep your head above water - sorry. Add to that rising fuel prices, rising food prices and no emergency fund ...... and houses are not selling fast at the moment and certainly not at top valuation/asking price. Even if you sold your house, think of the EAs fees, solicitors and negative equity ....

Sorry to sound doom & gloom but I wonder whether BR isn't the answer, here

mummytofour

Hi sorry my brain has stopped working......
In all honesty i cant see any other way than B/R. Keep your pensions for a rainy day. Get out of this mess and once its over your will be able to sleep better.

DeepintheRed

mummytofour wrote: »

Hi sorry my brain has stopped working......
In all honesty i cant see any other way than B/R. Keep your pensions for a rainy day. Get out of this mess and once its over your will be able to sleep better.

I'm seriously considering B/R is my only option. However, don't you have to have some sort of excess income over expenditure to be able to go B/R?

I'll look at the thread.