Advice from....

Sammy3008

CCCS.
This is now what CCCS have advised my DH to do.
Basically I went onto there Debt remedy today, and we have a surplus of something like £308.00 per month (however they only allow a limit on things like Groceries (£471 limit per month) etc), so they said options were IVA or DMP (currently on a DMP)
Thing is, we owe £76,560.60 in debts (excluding the mortgage), and I have been told by another Debt advice company (whom we currently pay DMP to) that for an IVA, we normally have to pay 25p back for every £1.00 borrowed, surely this comes over £308.00
However I did this Debt remedy about 5 weeks ago, and the result was BR, so unless I have forgot to add something this time, how on earth can that change?


So, after trying to get in touch with the CAB and BL, with no joy as yet, I have got to ring a Law centre up next Thursday or Friday and make an appointment to see them for financial advice, IVA advice and/or BR advice (which ever we can do really!) also going to ask whether we should voluntary repossess the house before an IVA or BR, and what rules there are to this, so if anyone has any advice to this, its always appreciated

So yep, thats just a little update from us

lee316

Sammy, I am by no means qualified to offer the advice, so suggest you do speak to the relevant body, but my personal opinion is that if you owe over 75 grand in unsecured debts, not counting the mortgage, than BR would probably be the best option.
You do not have to give up the house if you can manage the repayments after BR, as you would still have to rent and rent might be as high as your mortgage repayments.
I'm sure somebody will be along shortly with a more useful advice
Good luck with whatever you decide to do.

Sammy3008

lee316 wrote: »

Sammy, I am by no means qualified to offer the advice, so suggest you do speak to the relevant body, but my personal opinion is that if you owe over 75 grand in unsecured debts, not counting the mortgage, than BR would probably be the best option.
You do not have to give up the house if you can manage the repayments after BR, as you would still have to rent and rent might be as high as your mortgage repayments.
I'm sure somebody will be along shortly with a more useful advice
Good luck with whatever you decide to do.

Thank you.
To be honest, I could possibly try to buy this house, if I could get the fees together, but currently we have it on the market, as want out, although if it doesn't sell, then maybe me trying to buy it, once DH goes BR may be an option (should the OR offer it to me anyway, it is in negative equity at present too)
Is there a time limit or anything that I would have to keep the house for, before I can sell it?

lee316

I wouldn't know about the house, as ours will get repo'd, so never bothered finding out any details about selling it or buying it
You are doing the right thing by checking out all the options though.

peachyprice

Sammy3008 wrote: »

Thank you.
To be honest, I could possibly try to buy this house, if I could get the fees together, but currently we have it on the market, as want out, although if it doesn't sell, then maybe me trying to buy it, once DH goes BR may be an option (should the OR offer it to me anyway, it is in negative equity at present too)
Is there a time limit or anything that I would have to keep the house for, before I can sell it?

You wouldn't have to buy the house just because your OH goes BR, if there's no equity everything concerning the house i.e mortgage, deeds etc remains the same, all the OR would offer you is the beneficial interest, which in simple terms is the equity, as there isn't any you would by the future rights to any equity of £1 + legal costs, but even then it is not buying your OH out of the house.

A house can be sold at any time during or after BR, if the BI hasn't been bought the OR will have to give permission for the sale and will want any profit, if the BI has been bought it can be sold at any time.

HTH

Tinytim

Hi Sammy,

It can sometimes be confusing, especially when there appears to be conflicting information from so many different sources. The following is my opinion, and there will no doubt be those who dissagree with me. Obviously, I don't know what your income or expenses are, but it is generally accepted that the "allowances" you get for expenses are more generous for BR than they are for IVA or DMP.

Personally, I can't see very much point in an IVA unless it offer some essential advantage, such as enabling you to follow an occupation you would be excluded from by BR, or because you had significant equity in a property you wanted to keep. Certainly, an IVA is considered just as bad as BR as far as most mortgage lenders are concerned, and will effect your credit file for much longer, simply for the fact that an IVA is for five years whereas BR is almost always automatically discharged after a year. The amount you will have to pay on an IVA will also be more, as it will run for five years as opposed to an IPO/IPA, and will almost certainly be significantly more for the same level of income.

If you have little or no equity, and do not work in a profession which does not allow BR, BR is often the better option. There will of course be minor irritants, such as having a basic BR friendly bank account which may not apply with an IVA, but most of the time these are minor considerations. I also think a settlement of 25p in the pound is lower than that normally looked for; I was under the impression that most look for around 45p in the £.

A DMP is worth considering, if it will result in your debts being paid off within a reaonable timescale. It will do damage to your credit file, and it is arguable that this will be less than BR or IVA. For instance, there are many DMP's arranged which are expected to run for 15 or even 20 years. In 15 years time, your credit file would still show "arrangement to pay", and lenders would still consider this an increased risk. In comparison, the same application disclosing a BR discharged 14 years ago, or an IVA satisfied 10 years ago would almost certainly be considered as a normal risk, especially if the credit reference had been spotless since.

Whatever you decide, do be careful of costs. There is absolutely no reason to pay anyone anything to assist you with BR. It is not difficult and there is a vast amount of knowledge here to help. The courts and the OR tend to be very symathetic and helpful, and it is well within the capabilities of almost anyone.

With an IVA or DMP, the most important thing is how much of what you pay gets to your creditors. You should not consider paying fees for advice when CCCS, CAB and National Debtline can provide it for free. It is true, that in some cases they are funded by lenders to a certain extent, but to the best of my knowledge the advisors are not remunerated by how many plans they arrange. Therefore, they should be fully impartial, at least at the coal face. It is also worth comparing the charges for running an IVA or DMP, as this is money which doesn't go to paying off debt.

Whatever you do, don't make any decision either on the phone or in someone's offices, make it at home after careful consideration. If any pressure is applied, walk away

Sammy3008

Thank you TinyTim for your advice

I'm so confused about this BI on the house still, I must sound really stupid, lol!!
If I were to buy the house from DH once he's gone BR (the house is in negative equity by about £10,000, maybe a little more) and I wanted to sell the home after I'd brought it, would I only get money from that sale if I managed to get over the amount of outstanding mortgage?
Example, incase I'm making everyone confused, which knowing me, is possible lol:
Our current mortgage stands at £79028.00 (including early settlement charges), we've had estate agents round recently to value the property (currently on the market at £69,000) and its been valued between £65,000 and £70,000. If I were to buy (is it the BI?) and then wanted to sell, would I have to make over £79028.00 to make anything from the sale of the property, or would what I sold at, go in my pocket?
Again thanks everyone for advice

Angiepange

Sammy3008 wrote: »

Thank you TinyTim for your advice

I'm so confused about this BI on the house still, I must sound really stupid, lol!!
If I were to buy the house from DH once he's gone BR (the house is in negative equity by about £10,000, maybe a little more) and I wanted to sell the home after I'd brought it, would I only get money from that sale if I managed to get over the amount of outstanding mortgage?
Example, incase I'm making everyone confused, which knowing me, is possible lol:
Our current mortgage stands at £79028.00 (including early settlement charges), we've had estate agents round recently to value the property (currently on the market at £69,000) and its been valued between £65,000 and £70,000. If I were to buy (is it the BI?) and then wanted to sell, would I have to make over £79028.00 to make anything from the sale of the property, or would what I sold at, go in my pocket?
Again thanks everyone for advice

Hi Sam

I am not the most experienced on this board for advice but if/when your DH goes BR then if you were to sell your house and there was a shortfall you would become liable for that shortfall as you are not BR. All you will be doing by buying the BI is protecting any equity (ie enabling you to keep any profit) there may be if your house price was to rise and you sold the home when it becomes worth more than the mortgage.

If you sell your house you will only make a profit if you sell it for over £79028, as that is what is needed by the mortgage co. and any secured lender to cover what you have borrowed. If you have bought the BI and lets say in 1yrs time your house price has risen any profit made then would be yours to keep. If you have not bought the BI the OR would take any profit to go towards your DH BR.

Hope that makes sense, its a minefield out there.

Angie x

Sammy3008

Angiepange wrote: »

Hi Sam

I am not the most experienced on this board for advice but if/when your DH goes BR then if you were to sell your house and there was a shortfall you would become liable for that shortfall as you are not BR. All you will be doing by buying the BI is protecting any equity (ie enabling you to keep any profit) there may be if your house price was to rise and you sold the home when it becomes worth more than the mortgage.

If you sell your house you will only make a profit if you sell it for over £79028, as that is what is needed by the mortgage co. and any secured lender to cover what you have borrowed. If you have bought the BI and lets say in 1yrs time your house price has risen any profit made then would be yours to keep. If you have not bought the BI the OR would take any profit to go towards your DH BR.

Hope that makes sense, its a minefield out there.

Angie x

Hi Angie,

Thanks so much for that, its certainly made it clearer, and made my mind up, lol!!
Personally I don't think the house will ever be worth much more than its currently on the market for (69,000) because of the area, and if it did rise in value, it would probably be only something like an extra £5,000, so I can't really see the point in buying the BI.
Hope your both well. And thanks again

Sam.