Advice please with secured debt? HHEEELLLPP!

Yorkhornet

Hi everyone, i must say what a great site this is!
Myself and my partner are looking at going bankrupt...we have both secured and unsecured debt...We both work an have an income of £2,400 a month...not enough!
We are aware we only have ourselves to blame, and previous partners, but it cant continue...
We have a few things that stand in the way..
1. We own our house and currently sit in £10k negative equity, weve only had iT three years...now 2 months in arrears with mortgage..WILL WE LOSE IT?
2. We have a secured loan on the house...£15k...what happens with this?
3. We have small debts with family/friends, which we obviously need to pay, what happens with these in bankrupcy?
4. Our secured debt per month is mortgage and secured loan £1,000 month
5. Our unsecured debt to companies and friends/family is £1,000+a month.
6. we then have the usual bills, food, babies to look after..
WHAT WOULD YOU DO?
we are about £400 a month short...its getting ridiculous..
Many thanks, it is appreciated...thankyou for your feedback in advance.
Alan

debtinfo

Hi, and thanks for bullet pointing, makes it so much easier. First of all i cannot advise you what you should do. There are other options out there including IVA'S and DMP's which you should check out before making a decision. I can answer the specific questions you have asked.

1) If it has negative equity the OR will offer it back to you for a £1 plus solicitors costs (currently £211 for a jointly owned property). The Downside of this is that you must continue to pay all debts secured on the property inluding the secured loan. The Upside is you get to keep your house.

2) If you keep the house you have to keep paying it. If you dont keep the house then it and the mortgage shortfall fall into the bankruptcy.

3) All debts are included in the bankruptcy and can not be paid back (their are a couple of exceptions (fines etc). However (and i am not advocating breaking the law in any way) after the bankruptcy if you wanted to give some money to your friends and family (which was out of the goodness of your heart and was in no way a debt repayment) then you could.

Feelingfoolish_3

Hi everyone, i must say what a great site this is!
Myself and my partner are looking at going bankrupt...we have both secured and unsecured debt...We both work an have an income of £2,400 a month...not enough!
We are aware we only have ourselves to blame, and previous partners, but it cant continue...
We have a few things that stand in the way..
1. We own our house and currently sit in £10k negative equity, weve only had iT three years...now 2 months in arrears with mortgage..WILL WE LOSE IT? who is your lender? Some lenders will start possession proceedings after 3 months, some after 6, if you don't want to lose it then you need to speak with your mortgage lender and if you are paying your unsecured creditors then you need to reduce those payments to meet your mortgage payment then if you do go BR then follow the advice of debtinfo
2. We have a secured loan on the house...£15k...what happens with this? as above - are you up to date with these payments?
3. We have small debts with family/friends, which we obviously need to pay, what happens with these in bankrupcy?
4. Our secured debt per month is mortgage and secured loan £1,000 month
5. Our unsecured debt to companies and friends/family is £1,000+a month.
6. we then have the usual bills, food, babies to look after..
WHAT WOULD YOU DO?
we are about £400 a month short...its getting ridiculous..
Many thanks, it is appreciated...thankyou for your feedback in advance.
Alan

Hi, I think it is unlikely you would be able to do IVA as you may not have enough surplus to do so if you want to keep your home. As you are in negative equity then you can keep your home as debtinfo says however as you are 2 months in arrears you must address this immediately. If you are happy to lose your home then all of these debts would go in BR

Merry_Gentry

1. We own our house and currently sit in £10k negative equity, weve only had iT three years...now 2 months in arrears with mortgage..WILL WE LOSE IT?
If you don't contact your mortgage company and come to some sort of arrangement, then yes you may well do. So call them. Just remember, if you decide you want to keep the house, you keep the secured loan too.

2. We have a secured loan on the house...£15k...what happens with this?
If you go bankrupt and let the house be repossessed, then £15k will go into the bankruptcy as soon as the house is gone as it is no longer secured. If you sort things out with your mortgage company and keep the house, you will have to continue paying your secured loan.

3. We have small debts with family/friends, which we obviously need to pay, what happens with these in bankrupcy?
You would list them as creditors, and should in no way try to pay them off before going bankrupt. This is seen as preferential treatment and the OR can and often does chase to reverse such transactions. However, you can pay them back from any surplus you have after going bankrupt.

4. Our secured debt per month is mortgage and secured loan £1,000 month
What is the cost of renting in your area?

5. Our unsecured debt to companies and friends/family is £1,000+a month.

6. we then have the usual bills, food, babies to look after..
WHAT WOULD YOU DO?

No one here can advise you to go bankrupt because we are not in possession of all the facts - you need to speak to a free debt agency and get some advice. If, having the full facts, they suggest bankruptcy, we can give you advice.

It may well be worthwhile popping over to the Oldstyle board for advice on cutting costs.