Help please....bankruptcy/IVA

Tommy_5_Bellies

I am hoping someone can help me. Two years ago I entered into an IVA as a solution for £30,000 of debt I and my wife had built up over the years. 12 months ago my employer decided that it was going to a Job Evaluation exercise and I was informed that as a result of this my salary would be reduced by 30%!!! However, they were giving me three years protected salary at my current salary. This meant that I would not be able to fullfill the IVA. I have a mortgage and a loan secured against the house however because of the size of the outstanding balance of both the mortgage and the loan I am in negative equity. The IVA people have said that they can extend the time and reduce my payments by £100 per month but I know that this wouldn't help as I'm having to take the pay cut in 2009.
I think the only option left open to us is to go into bankruptcy but we have a young family and we don't want to use lose the house. I am up to date with both the mortagae payments and the secured loan payments. I know the unsecured loans can be taken into the bankruptcy but I wanted to know if the secured loan can. Also, where and what I have to do now to get things moving.

Any help and advice would be gratefully appreciated. I know that the problem of the debt was our doing but I didn't expect to be loing 30% of my salary.

LilyBart

Hello Tommy,
I'm afraid that you can't include a secured loan in bankruptcy, only unsecured debts. If you want to keep the house, you'll have to continue paying both the mortgage *and* the secured loan. If you want to get rid of the secured loan, you'll have to give up the house, either through voluntary repossession or through waiting to be repossessed. Sorry it's not what you'll have wanted to hear, but the vast majority of those who've gone down the repo/vol repo path have done so because of their secured loans.
Lily

Tommy_5_Bellies

Thanks Lily

To be honest I thought that's what I would have to do. Our biggest worry that we would lose the house. I don't suppose you know the next step for us? We are at the point now that we have already defaulted on the IVA

kind regards

Tom.

LilyBart

Tom,
The first step is to get a current SOA together (someone clever will post a link to a calculator shortly), and to talk to the various advice agencies. The contact details are in the sticky at the top of the forum. I suspect a lot of this process will seem tediously familiar to you after the IVA hoopla, but if you're going for bankruptcy, stop paying all but priority bills, start building up the arrears on mortgage and secured loans, save like crazy for the court fees, moving costs and deposit for a new, rented home and start looking for somewhere to live. Develop a thick skin, because your creditors will start hassling you by phone and letter, and some of them will try to put the scarers on you. Post here if you get spooked, as there are some ferocious regulars who know their consumer rights from top to toe and will be able to help. Call your local court to find out whether they operate by appointment or drop-in, start filling out the forms, and post as many questions as you need to here, where you'll get plenty of help from people who've been through it too. Just to try and put your mind at rest, there are many family people here, me included, and the children have adapted really well and are happy in their new homes. Do as much research as you can, plan as carefully as you can, and get as much advice as you can, even if it's conflicting. The more you know about bankruptcy, the less traumatic a process it is.
best
Lily

ps My OH and I lost 50% of our income, so I know what a shock it can be. But once you go bankrupt, it's horrifying to think how great a proportion of that income was spent on servicing debts. Secured loans are an absolute killer.

aproblemshared

http://www.makesenseofcards.com/soacalc.html

Hopefully this will help, good luck

peachyprice

Tom
If you think there's a chance you will be able to pay your mortgage and secured loan once all the other debt are gone then there is no reason to rush into moving out. You won't lose your house to the OR due to the negative equity so you can always have a bash at staying, if it all becomes too much you can still leave your house after BR and any shortfall from the mortgage and loan will be included in your BR, even years later.

HTH

Tommy_5_Bellies

Thank you to both aproblemshared and peachyprice for your help and advice I'll start looking at this tomorrow.