just been made redundant

craigw007

Out of the blue, i find i am on the scrap heap like many others i suspect.

Problem is, with my job loss our joint income has gone from just under £100,000 to just over £20,000 (my wifes income)

My redundancy package, hasnt been defined yet but i am pretty accurate in assuming that its going to be statutory.

finding another job paying about 75K in this climate is going to be hard if not impossible. Reality implies a drop of perhaps 15-20k to get a job now.

So, weighing this up with everything else i am considering going bankrupt.

I just got a rough estimate of the houses value, about 25k less than what i paid for it but its one of those northern rock mortgages with a unsecured loan which makes the negative equity closer to 55k.

Unsecured debt between my wife and i is 114k.

House is a detached 4 bed house and its just my wife and i (we did have a baby boy but the NHS money problems not having a bed for my 9 week old son ultimately contributed to his death)

this is the 2nd time this has happened to me 6 years ago to this very month last time a former employer failed to pay me on time and at the end didnt pay me for 3 months. long story short i had to remortgage the house, 2 years ago we sold it and got rid of the 2nd charge moved further north (away from greater london) to get more bricks for your money.

Debt wasnt great but we could see light at the end of the tunnel, loans were coming to an end in the next 2 years etc etc, cash flow would improve increasing the chances of paying of the other debt. On top of that i had about $500,000 dollars worth of company stock to sell (worthless until they go on the stock market but that was the plan this year before the current turmoil started)

i know until i get back into employment the only option open to me is bankruptcy, otherwise IVA/debt management could be an option.

We both accept going bankrupt could result in the loss of the home, not because there is no equity but because the IPO could be so prohibitive that it makes it impossible to stay. I know someone could by the interest in the property i.e. parents/in laws to stop them from selling it again in say 3-4 years time but what i am interested in is the effect that this unsecured loan from northern rock would have on things?

I dont want to contact them just yet to ask because we know what asking questions does, and technically my redundancy doesnt kick in until mid january.

Any advice would be gratefully appreciated?

Horace

Hi and welcome

Can you post your statement of affairs so that we can see incomings and outgoings? As we may be able to give on advice on what to cut back on to chuck at your debts. https://www.makesenseofcards.com/soacalc.html - there is a button on there to formulate it to MSE enabling you to copy and paste it here.

Go and register with some agencies because you may be able to pick up some temp work or even permanent work. Unfortunately, in this current climate then it is unlikely that you will be earning as much and will have to take a drop in salary.

Sorry to hear of your loss, you have my condolences. As you have this 4 bedroom house and there are only two of you, cannot you not take in a lodger? Even if you have one that stays Mon-Friday only that will be a help.

HTH

sammy115

I just feel your reaction is a bit knee jerk and extreme!

both me and my OH both lost our jobs a couple of years ago. We went from earning 62,000 to NIL! with three kids and a new baby.....couldn't get benefits or anything (long story!0

But with the help of this site we moved forward......we are still p!icking up the pieces and it hasn't been easy...I know there have been many many argument about bankruptcy on here but I just think you haven't considered any other options.

Stupid question - any mortgage protection, any chance of a mortgage holiday!

craigw007

Your probably right Sammy, it maybe a knee jerk and extreme but just investigating my options. If i said i was going to go down the route of bankrupty then that wasnt my intention. I am looking at all possiblities right now, so that if i dont find employment anytime soon i know what my options are.

Mortgage payment holiday, ironically i had already asked for this to take place in Jan/Feb (before becoming redundant) so i was going to redirect that money into paying off other debt. not now of course. (coming of a 2 year fixed rate - just so happens that the rate on my fixed is greater than current SVR)

i will post my income/outgoings once i can get everything finalised.

sammy115

Phew, glad you didn't take offence - I just wanted to say keep your chin up and to get through this is not impossible. To be honest, it kind of gave us the strength to be tough on our creditors and not let them bully us. We offered them a £1 per month. Most of them accepted.

The most important things are mortgage and council tax. They take no prisoners although council tax people were very very helpful.

Get yourself down the jobcentre, swallow your pride and sign on. See what your options are. My OH took it as an opportunity to go self employed, I ended up changing direction in my career that I would not have thought possible.

What doesn't kill you makes you stronger, it seems life has been pretty rough on you up to now.....

TotallyBroke

Agree with Sammy115 post your soa asap.
Ring mortgage people ask them about ppi or a payment holiday. Also ask them to freeze the interest on the loan until you get another source of income. On all your loans and credit cards check and see again if you have any ppi. Also ask them to freeze the interest.
Phone utility companies and see if you are in credit with them. If you are then explain you will be stopping the direct debit due to circumstances.
The usual things we advise are paying things over 12 months that are normally paid over 10. Cancelling sky etc, going out, mobile phone contracts, gym memberships. Reducing grocery shopping which I'm sure you can probably half by shopping better.
Good luck

Horace

I wish you all the best craig - I know what its like to be made redundant, I was made redundant in August 07, I had no warning, I was called into work whilst on sick leave and they wouldn't say way and boing I was made redundant with immediate effect:mad: They only paid me the statutory amount of redundancy pay so I too swallowed my pride and went and signed on - I have been unemployed since then but I am not officially unemployed now because via New Deal I have set up my own business and I am test trading for 6months whilst still getting my benefits, at the end of these 6 months there is no way I am going back on the dole, I shall be applying for working tax credit instead.

It can be quite shocking but it is possible to live on a heck of a lot less money by cutting back and only buying what you need and batch cooking. Admittedly, I am only cooking for me but if you saw me cooking you would think that I was feeding the 5000 because I make up my own dinners and freeze them. I make a bit of extra money from mystery shopping - have a look at the Up Your Income board for details.

When you have sorted out your SOA - we can pick away at it. Try not to fret too much, the good folks on here will help you out.

sammy115

last post then i must go......as to the gym thing......people may shout at me for this. We actually approached the gym and told them what had happened, and they gave us a six month payment holiday! This was because we had been members for years....I have since cancelled my gym membership but OH still has his...

This was a big chain of a gym.

craigw007

i got some breathing space if you can call it that, my redundancy interview in tuesday next week, i expect to still be paid for December as normal, as i assume my 1 month's notice will be served on Tuesday. Come end of month the 4000 quid i get (thats my salary - if you wondering what i do for a living i am a very senior technical engineer in the information technology space)
With a payment holiday on my mortgage for Jan/Feb - thats the biggest outgoing (car is on HP) the rest of the biggest out goings is credit cards/loans.

I am still working out with my OH about our expediture and income. Well now, its going to look a lot more like a bomb site.

Horace

Craig - you and OH can start cutting back now - have a look at the moneysaving oldstyle board to get tips on meal planning and reducing the grocery bill (it might seem like a small step but its a start).

When you have your redundancy interview, make sure that they help you find another job, you have the right to attend interviews whilst you are waiting for the day of your redundancy. See if you can register with some agencies, get your CV typed up and load it onto Monster jobs and other job websites.

I know it all seems black at the moment - its the shock of it all. As soon as you post your SOA, we will be able to see where you are overspending and give you plenty of tips, you will need to do an SOA if you decide to speak to one of the debt charities (don't ever pay anyone to sort out your debts because you will never pay them off). Whilst you are still in employment can you transfer your credit card debts to a 0% balance transfer card? You will most likely have to pay a small fee but at least you will have some breathing space and a huge interest-free period.

Merlot

http://www.worksmart.org.uk/rights/redundancy

Read this and find out what you are entitled too, and do not sign anything in your interview until you have taken some kind of advice.

You must remember to take out life insurance out for yourself if you had life cover from your work, this is essential, and more so than a mobile phone.

You will get through this, my OH was made redundant a few years ago and it was the best thing that happened to him, he started on contract work and hasn't looked back.

Register your details with monster, fish4jobs, Hayes, etc etc. My OH recieves a few calls a day offering him work. He has never been out of work in the three years of contracting.

Merlot.x.