Severe Debt!!!!!!! Very Complicated What Can I do?

gren05

Hi I am hoping that you will be able to advise me what to do.

Where do I start.....

I had approx £125,000 of debt on Credit Cards & Loans. My partner has transferred £23,000 onto his cards in his name & took out a loan of £14,000 to try to help me out.
My current situation after the above is that I have

-Debts on Credit Cards £72,282 (13 Creditors)
-Loan in my name BOS £11,400 (£8400 still o/s)
-Loan in Joint names of £10,000 (£7100 still o/s)

I am employed by BT & have been off work Long term sick since the 11th April & wef 11th August my basic salary was reduced to 50%. I will not be returning to work for at least another 4 months.

I have a mortgage in my name only of £182,500 & recently applied to remortgage & include my partner on the deeds so that I could raise £50k to help reduce the debts. (My house was valued at between £280K-£300k). Although my Lender agreed to the additional lending there is a second charge on the property of £42K held by the RBS which I agreed to because the RBS needed security against my partners overdraft facility for his company. My partner is in partnership with his elder son who also has a £42k charge on his house through the RBS. Anyway because of the amount of borrowing I had requested & with the 2nd charge the RBS would not agree to the addional borrowing & was refused. My partner is not in a position to cancel the 2nd charge.

We now find ourselves paying Credit card (minimum payment) bills alone in excess of £2k per month & not actually clearing any of the debt only paying the interest & because I am now on reduced basic we cannot meet our outgoings each month.

My partner cannot enter into any kind of Debt plan beacuse he consulted the Business Debt Line & they have advised him it would seriously affect his positon with RBS & also his suppliers. (He employs about 14 people).

I have consulted the Citizens Advice who have advised me that they are not able to provide me with Legal Aid because of the equity in my house & also because of my partners income input into the house £2500. They have advised me to put together a Personal Budget Sheet showing my income only & send letters to my creditors offering lower amounts each month. They also recommended Bankruptcy.

I do not want to go down this route if at all possible But I do not know what to do to clear the overwhelming debt & interest being applied.

Once again my partner does not want to be included in any debt plan because of the implications to do with his business.Is this correct?

I would prefer to go down the Iva route & my partner has said that he would pay me Child maintenance to ensure that I had in excess of £200 clear per month so that I could enter into a IVA........

At the moment my income is only:

Wages £650 (now after 50% reduction)
Child Benefit £80

Partners Input £2500

Total Joint Income per month £3230
Total my Income £730


Outgoings Mortgage, Utilities Food Ins ETC £ 2000
Credit Cards £2111 (Minimum payment)
Loans (3) £700


As you can imagine my relationship with my partner has been severly damaged by the debt , & he has consulted a solicitor, has he is worried that If I go Bankrupt then he will be left with nothing other than my debts that he has taken on. After making 10 years contributions to the house he feels he should have a share of the equity. His soilcitor has recommended that I sign a deed of trust & also he is seeking to put a 3rd charge on the house to protect his Interest.

If I thought my house would sell promptly I would not hessitate in putting it on the market....however at the moment we have 2 developments of Flats being constructed next door to us (1 block Housing Association) & the estate agents have recommened that we wait until they are constucted otherwise it will affect the price)


Please Advise????

mark55man

i am sorry not to be able to offer more help, but Sat mornings are kind of quiet.

There will be others along soon with more helpful advice. As you obviously keen to start resolving the problem that's the start.

i would read some of the other threads (if you search for SOA - statement of affairs) that will get you going on how to get spending sorted.

as for managing the debts, be clear you understand the interest rates you are paying on all og them

good luck and hugs

Bismarck

again, bumping this up.

and askign that you take care of yourself.

Toto

Hi first of all welcome to MSE. You have made the first step by admitting there is a problem so well done for that.

I know it seems an impossible task at the moment but even the biggest of debt problems have a solution. If you post a SOA, a link is HERE and we will have a look at it for you and make some suggestions about where to start.

mark55man

have you considered selling and renting. Even if you move to the same area, this would take the sting out of the debts. i know its not the best time, but its not the worst time either

if this thread goes quiet, I would try and bump it up again (by providing a bit more detail on expenditure) around 5pm its a lot busier

try filling in one of these (cut and pasted from different thread)

TMoose wrote: »

Congratulations on having your LBM!

In order to give you good advise, you need to post a Statement of Affairs http://www.makingsenseofcards.com/soacalc.html which will allow the good people here to come up with ideas of how to save money to throw at your debts

Also, is there anything you can eBay to get cash to throw at the debt? or can you earn more money?

also if you do search for the word makingsenseofcards in the search box (middle right) you will find many many threads with people offering similar advice to the many in similar situations

So_Sad_Angel

Hi gren05

Hugs to you Honey....I know how much pressure you must be under but you post makes it clear that you are ready to deal with your situation.... I think you know that you can`t go on as you are.

Do call Nat Debtline or see CAB as second opinion. Did CCCS not mention IVA or DMP options to you? You really need to just reduce the outgoings on those unsecured for a while to give you breathing space to get back on your feet.

I am surprised that CCCS mentioned bankruptcy this must only ever be the very last resort & you are not at that point yet.... esp given that you have equity in your house....you have an asset that may appreciate over the coming years too so BR wuld be an extreme measure especially as you will be back to work soon anyway.

Please please get a second opinion.Nat Debtline may be best bet as there is business interest in the 2nd charge on the mortgage.

Anyway...good luck...remember if IVA is mentioned there is an IVA board connected to the BR board...also DMP support is on DFW.

It will be sorted...there is always a solution.

Angiexx

Toto

I'm no expert on IVAs but I don't think it's the right option for you because of the equity in your property. I believe (and please correct me if I am wrong) that you would be expected in the 4th year of an IVA to release the equity in your home. I also believe that your creditors would be unlikely to accept an IVA when there is enough equity to pay the majority of the debt.

Under an IVA your credit rating would be almost as bad as if you were bankrupt. From the information I can gather from your first post I think a DMP would be the best option. You would pay what you can currently afford. Then perhaps when the flats are complete and the housing market has picked up a bit you could then sell your house and offer full and final settlements to your creditors.

So_Sad_Angel

I agree Toto......a DMP in the first instance esp given the sickness would be totally appropriate until the OP has chance to get back on their feet....creditors would often cease interest & give the debtor opportunity to continue servicing the debt, albeit at a lower monthly figure, of a sum that is consistant with reduced income.

OP my advice is to just get as informed as you can...about all options then you will know which one is best for you.

Angiexx

Ps I am in a DMP & I have to say that it really has helped reduce the pressure during my illness.

Little_Vics

just a quickie to say well done and I hope you find these boards helpful and friendly. There's always a solution, no matter what the problem. LV x

mark55man

oops sorry gren - I saw you already thought about selling.

however - most buyers won't be that put off by the new flats, and you have to decide if the extra cash you can get by waiting is worth the extra you will have to pay in interest etc over the next year or so by not releasing the equity

debbieblueeyes

Hi hun,sorry to here your in so much debt its good you are facing up to it,a dmp is a very good option for you im in 1 myself,please do go to someone like payplan phone number is;0800 917 7823 or national debt line,im with Baines and ernst who are charging me 35POUND extra per month,im in the middle of changing to payplan which is free,good luck hunnyx