Please help £107,000 debt, and unsure best action to take

Jacko123_2

Hi, I am new to this forum and i am looking for help.

Credit cards (7 cards) £43,500
Personal loans (3 loans) £63,500

Total outgoings £2450pm

Income £2900pm

I am £107,000 in unsecured debt at this time. I also have a £94,000 mortgage on a property valued at £170,000. All the unsecured debts are in my name only, while the home is in both mine and my wifes names.

My story is proberly simular to many others, and needless to say I feel very bad about my situation, and have finally come to terms with the fact that i can no longer fight it financialy. Therefore, during November I started to research all options open to me. At this time I have not missed a single payment, but after Feb 06, i am going to crumble, the question is, what way do I deal with it.

Bankruptcy brings me many more problems associated with my work, therefore it is the last option.

IVA, looks positive, I have about £1000pm available, but with the equity in the house, even though they would only try to take my share, it's highly likely they will force a sale. As we have 2 children, again this is not really what we want.

DMP, is OK. How will this work?, will all interest be frozen?, can any debt get wriiten off?.

Finally, full & final settlement, this occured to me as I could raise another £38,000 from the equity in our home, then keep this money to offer at a later stage to get a reduces settlement figure from creditore, all the time maintaing my mortgage. This option if possible would allow me to offer 50-60% and then clear the vast majority of the debt.

Please, any advice is greatly appreciated.

Many thanks

bonnie_2

i really feel for you especially at this time of year. but even at a thousand pound a month it will take you at least 9 years to pay of could you sustain it for that long or if your situation changed.
are you not better of to sell your house and rent. and then start again when more finanacially better.
try posting a list of all your incomings and outgoings.
best of luck mate.

Xbigman

If bankruptcy and IVA are not an option then your only recourse is a DMP. Full and final settlements are not an option as there is a big catch 22 involved. No company will consider an F&F offer until you default, and once you default your credit is shot and you can't get the money you need.

If you go for a DMP you need to shift your view of the situation the other way. Work out how much you need to live. Include something for cloths, replacing electrical goods and long term car maint. Then throw the rest at the DMP. Forget how long it will take to pay off for now as this is a meaningless number. You just need to get into the budgeting habit and living within your reduced means. Post you incomings and outgoings details in as much detail as possible and various of us will pull them apart and see if more savings can be achieved. Trying a DMP for a year or so would not stop you considering an IVA or bankruptcy later if it didn't work out.
One word of caution. With debts that high you can almost guarantee some of your creditors trying to put a charge on your property. Just be aware this might be a long stress filled fight you are facing.
Regards



X

jcr16

i can see where bonnie is coming from but even by selling , if you got £170k , you would have estate agents fees and solitors fees to take out of that. plus u wouldn't be able to clear everything. but then i suppose £30k of debt is better than £201k.

may i ask please what is going to change in feb ? is the income yours only or is that a joint income?

i'm sure someone will soon be on ans able to give u lots of advice. well done tho on being brave and having your lightbulb moment.

jellycat40

Hi Jacko

This is awful for you. The problem will be that if you go down the route of either IVA or bankruptcy then you will have a charge put on your property. If you do a DMP then you will ruin your credit rating.

I think that if you intend to remortgage your home for a full and final settlement later on you may as well do it now and pay of your creditors as far as possible and then look at an IVA for the rest.

I could not entertain Bankruptcy either as I am a company director of my own company and could not lose the directorship. I have applied for an IVA and I am waiting for the meeting of creditors.

Please try not to stress and jeopardise your health.

Best Wishes and hugs

Louise :grouphug: :grouphug:

ellou02

Hi
I'm no expert on this, but I wonder if it would be worth transferring your half of the house to your other half? At least then the roof over your head is protected?

As the other replies have said, the most important thing is that you've decided to take the steps to sort it out, even if it's hard and takes a while.

Best of luck - it will be worth it.

mrsbez_2

Hi Jacko,

I would find your local insolvency practitioner in your phone book and make an appointment TODAY. it won't cost you anything to go and see them! At least you can then rest easy over christmas. They will probably suggest an IVA.


You will probably have to make repayments and raise the approx £38,000 equity in your home, and this will go towards the p in £ offered to creditors.(p.s don't worry about them forcing a sale, you have children and wife so they cannot just do this- IP will probably advise you to remortgage to raise this equity, which is possible in your situation)

As long as your can show in your income/outgoings that this is all you can afford then they should accept this and whilst in an IVA you shouldn't have any further probs. And the equity should produce an acceptable settlement figure.

Have a great christmas and phone someone today!!

Debbie

i don't know much about debt management programmes, so can't help you there. But personally i would go and see an Insolvency Practitioner- look in yellow pages.

Xbigman

jellycat40 wrote:

Hi Jacko

settlement later on you may as well do it now and pay of your creditors as far as possible and then look at an IVA for the rest.

Louise :grouphug: :grouphug:

Remortgaging now to raise the money for F&F offers might seem a good idea but it is very dangerous. After the remortgage you would still need to default on the unsecured debt. As part of any financial statement you you would have to explain why you have 38k in the bank and why you just remortgaged knowing you would need to default.
With the amount of debt you are carrying I cannot see you getting a good rate on the remortgage. And if the remortgage did not save you and you IVA in a year or two you have killed a lot of equity and increased your secured debts.
Lastly. Best case scenario, if you borrowed 38k and managed to get 50% F&F settlements (60 to 70 is more realistic) you would still owe 31k plus the mortgage of 132k.

This option would need carefull thought and very carefull planning. I would not recommend it.
Regards



X

Jacko123_2

Firstly, thanks to all that have posted advice. the feedback was good to read, and helped me a great deal.

My monthly budget is ok, i could post all items per £, but I have been through this site very well and have come to a total figure of £1148pm + £651 mortgage and council tax. Total £1799.

I have about £1000pm spare, some months as much as £1200 depending upon work.

With an IVA they would put a minimum charge of £38,000 on the property, then they would want the spare £1000-1200pm. Therefore, after 5 years I would have paid minimum £98,000, and if £1200pm, then all debt paid. To construct an IVA is expensive.

It is better for me to just go to DMP, will interest and charges be susp[ended if I go DMP, and how should i arange the DMP, alone, or with the national debtline or CCCS.

I know it's going to take a long time to clear, but I just want to choose the write path.

Febuary is my last month that i can pay all payments as then my money to hand runs out, I have another £33,000 available on cards, but the time has come to stop this mad merry-go-round.

Many thanks again

Jacko123_2

Anyhelp please

southernscouser

ellou02 wrote:

Hi
I'm no expert on this, but I wonder if it would be worth transferring your half of the house to your other half? At least then the roof over your head is protected?

The house is protected anyway as long as the mortgage is paid, as the debt is unsecured.