advice sought from here

alastairq

I am in a quandary as to my next course of action....and would appreciate advice/views from experienced folk on here.

My situation is, I have roughly 60k's in debt to credit card companies. So far I have gone through the processes of writing, explaining my situation,ultimately seeking an agreement on nominal payments to each..[at least 7 cards...all maxxed out]. One company has volunteerily sought just £1 a month nominal payment! They have all recieved my statement of finances, which show a slight minus fugure, outgoings against income....and I get paid monthly [all courtesy of MSE's excellent budget sheet...and CAB's.] .Currently at the stage of recieving mail from some Debt Collectors, usual threats, etc..I ignore attempts at telephone contact, since I pay for the call, and it is seen as an opportunity to put pressure on the debtor to agree to pay something which they probably cannot afford.

Had appointment with CAB...who thought I had done a good enough job without them....and would I like to be one of their Debt Councillors??

Assets consist of one family house, on a mortgage.

personal situation, my wife has separated from me,has moved out to rented house.

I have a 9 year old son, who nominally lives with Mum, but he has shared residency...spends rather a lot of time living with Dad!

Last April, we agreed to place our house up for tender, on advice from estate agents.

To make it more appealing,I agreed to move to a rented house....seizing what I saw as a good opportunity at the time.

So.....we have a modest amount of arrears on the mortage, and we have jointly negotiated with the BS for reduced payments..ie interest, plus some arrears.

Currently I am able to obtain a modest amount of overtime at work, which covers my share of these payments.....but which cannot be guarenteed over the coming months....

I am completing my sixth month as a tenant, so CAN tender my notice to quit without penalty.....

I also am fully prepared to accept bankruptcy at some point in the near future.......perhaps a credit card company will force the situation and pay for it? [pigs might fly too]

My quandary is....Neither I nor my estranged wife can support a shared mortgage payment, plus rent...for long. She has minor debts, and is seeking her 'share' of the proceeds to pay these.....I doubt I will recieve anything like enough to stave off the creditors....no matter....so we prefer to sell the house ''ourselves' rather than have the BS foreclose, put up for auction, possibly leaving us both with a balance to pay.

Although up for sale, the current economic climate has seen virtually zero movement in the housing market hereabouts, we HAVE potential buyers, but they can't sell their houses either.

As I see it, my options are, to move back into the family house, taking over the mortgage payments..[Wife does NOT want to move back]......fending off the credit card companies in the meantime...[NO arrears/debts of a primary nature, apart from mortgage]...until the house actually sells, when I shall have to find rented accomodation again......or:-

Stay where I am.....pay my half of the mortgage, in the hope the house sells reasonably soon, for a sum the BS, and wife, find acceptable.[as I said, given my level of debt, it doesn'tmatter if I recieve nowt from the house..my 'share' goes down the pan anyway]...

[I happen to LIKE my present rented house...so does my son....and it is a reasonable rent.....so I have a certain reluctance to leave....]

If I move back into the family house, then have to leave, will the fact that I do/will have a credit reference showing defaults have any influence on future renting, given that references are always sought?

What to do, that will likely have the LEAST adverse effect regarding bankruptcy in the future? [I have no interest in having credit..can live well enough without it]

all advice readily absorbed......thanks folks.

deedee_3

Houses are extremely complicated and can be a minefield in bankruptcy. You had best get proper advice from a debt charity such as National Debt line. You will need to do this any way as the judge may postpone your bankruptcy if you haven't taken proper advice.

Hopefully some one can will come along in the morning with some proper advice.

RichOneday_2

Well the first thing is that the chance of pigs flying is actually very low compared to the chance of getting a credit card company to make you bankrupt. They won't. The only creditor that will is HMRC.

Now, the house. Am I right in thinking there's some equity? Or is it doubtful? Is it a case of there was but maybe not soon?

Your house could be stuck for a while and all indications are looking at a further 30% drop over the next 3 years so it could be tricky. You might consider letting it out to cover a big part of your mortgage payments and then marketing the property with a sitting tenant. This would then aim the property at a different part of the market which isn't tied up in chains.

If you could argue there was no equity, you could go bankrupt and your wife could buy the beneficial interest in the property for £1.

A lot depends on value of property and outstanding mortgage.

get_me_out

Hi

As already said someone will be around to advise on house front.

However from what I have read on here and local experience. It can be hard to get a landlord to accept you after BR. Smaller ones can be ok but the bigger estate type ones can be difficult.

You need to talk to CCCS or even your local CAB. As they would have an idea of what happens in your area.

If it was me I'd keep the rented place you are in, after all you have proved your a good tenant so you should be ok after BR.

How about renting out your own house for the time being?? Don't fully know implications of this. But if a sales a long way off may help ease pressure.

If you filed BR, then the house would fall to your ex to pay anyway. As will any other joint debts council tax, fuel etc.

deedee_3

RichOneday wrote: »

Well the first thing is that the chance of pigs flying is actually very low compared to the chance of getting a credit card company to make you bankrupt. They won't. The only creditor that will is HMRC.

Amex are another that will petition for bankruptcy and a in recent development it seems councils are jumping into it for council tax arrears. This seems to be because of reaching targets etc.

alastairq

Now, the house. Am I right in thinking there's some equity?

the house WAS guide-priced at 150k.....only offers were chancers/cash at around 100-105k...

mortgage currently stands at around 104k [balance]

then there are the costs associated with simply selling a house...fees, etc...

Given the [sudden] severe slump either in house values, or the ability of folks to obtain mortgages....equity of any sort I believe will be a 'miracle'.

Renting out is actually quite a costly thing to do......especially if maintenance issues are identified [not that there are any I know of].

the house is quite rural...with zero local amenities.....plenty of land, a nice place with plenty of potential for expansion [within Planning rules]...and buyers are aware of this......but it is pretty basic......

the issue is the ongoing effect of the bottom dropping out of the market.

If the creditors take me to court..I have reason to believe my current income/expenditure will see little or no effect occuring,ie they wont get much out of me....but.....does a court take into account any overtime worked?
plus....how would they view my paying part of a mortgage on top of my own living expenses?

[incidentally, the town where I live has an extremely high incidence of bankruptcies...so the local CAB tell me]

RichOneday_2

OK, this is looking as though if you went bankrupt you could point to the offers to show no real equity.

That would enable your wife, or yourself, to buy your beneficial interest in the property for £1 say. This is probably your best aim.

Once bankrupt, and you've got rid of all your cc payments is it likely that you're going to have net disposable income. If over £99 you are going to end up with an IPA which will involve you paying between 50-70% of your disposable income in to the bankruptcy for 36 months.

This IPA can be increased/decreased as your income/expenditure changes. So, if your overtime is variable this is how it would be dealt with.

alastairq

Thanks..the only other debts I have at present are an overdraught, at roughly 1.1k at present....and a small unsecured bankloan which is costing me around £95 a month....and on which I have no arrears.

As far as the CC payments are concerned,Apart from the nominal £1 a month to one of them, I am unable to pay anything to the others....despite their attempts....[ought not pay one, to the detriment of all the others]

so, if going bankrupt.....that would also affect the overdraught AND the personal loan , would it not?

{personal loan taken out in March, before arrears built up....to pay deposit, rent and essential domestic items..like washing machine.]

Going by my present declared outgoings, disposable income would be less than £99....just....

I do have a couple of cars....both of little value.[depends I suppose on scrap prices?]...one actually GIVEN to me, and one bought some years ago, for about £500, current value pretty meaningless..
My 'wife-ex' uses one, for commuting...I use the other......running costs at a minimum except for petrol, as I do all my own maintenance...

I gather this is allowed by an OR?

If the house does magically sell in the meantime.....for example say, for 120K...which is about 15-20k more than the highest current hard offer [but still short of our asking price].....what would be the situation, if I have already sold my beneficial interest to my wife, as suggested...for £1??

regarding the overtime......although irregular, and oversubscribed....it IS optional.

Does it actually matter, once Bankrupt, if I 'refuse' overtime, in order to keep my salary at it's basic level? [Thus keeping disposable income to a minimum?]

RichOneday_2

In my view if at all possible you want to avoid an IPA for obvious reasons.

Once you've achieved that overtime could be disastrous on this basis.

If we're very simplistic and assume things go incredibly smoothly and you get discharged after 6 months, lets compare accepting £500pm net overtime or not.

Accept: Gain over 6 months £3,000 IPA Payments over 36 months £9,000

Don't Accept: No additional income, no IPA payment.

After discharge you can then take the overtime, so from month 7 in this example.

So, and this is a very simple argument, if you accept overtime during the period up to your discharge you will pay it back THREE TIMES over.

Or I may be talking rubbish as usual!!

philnicandamy

and you could go the other way & be discharged in 12mnths.....early discharge is never a guarantee

(mine took nearly 9mnths)

RichOneday_2

philnicandamy wrote: »

and you could go the other way & be discharged in 12mnths.....early discharge is never a guarantee

(mine took nearly 9mnths)

If it was 12 months to discharge, the same logic would lead to the overtime being paid back 1.5 times.