Martin (or anyone!), advice DESPERATELY sought: £122,342.83 of (non-mortgage) debt!

On_A_Financial_Death_Bed

Dear All,

Apologies for such a dramatic thread "subject field", but I truly find myself in dire straits, not to mention in financial meltdown: I have a personal (non-mortgage) debt of £122,342.83 and the monthly repayments on this are debilitating: £1741.00 per month spread over 16 separate liabilities.

It gets worse:

• £76,000 of this (approx.) is in my parents' name and, naturally, should I default on repayments then that brings the threat of my parents being forced to sell their home. (Which, admittedly, is mortgage-free and worth low six figures, but that is their pension pot since they have no recourse to a private pension.)

• My father only just pulled through - though remains critically ill - after recently being given 48 hours to live because of multiple organ failure

• My nett take-home is a paltry £1450.00 pcm!

At the moment, I am only surviving as I "own" 4 flats -- (I say own, but all four mortgages are interest-only mortgages) -- rent them out to tenants and make approximately £1300.00 per month profit. HOWEVER, I keep getting unexpected bills of high three-figures or low four-figures (property maintenance costs, service charges, etc.) cropping up out of the blue which are eating up any profit and leaving me unable to start to reduce my overall debt.

It will get even worse, too, if interest rates start rising again, which, if some of the media reports are to be believed, isn't light years away from happening.

In the nicest possible way I NEED MARTIN'S/SOMEONE'S HELP OR ADVICE. :embarasse

With a poor credit rating, I doubt I can get any more credit cards (in the parlous state I'm in anyway, that may not be a good idea whatever the case) and any "debt reconsolidation plan" -- even through bona fide, reasonably-priced avenues -- may not be available to me for the same reason, especially as all four flats that I own are in negative equity (approximately each being worth £20k less than the original purchase price).

I DON'T KNOW WHERE TO TURN...

I have contacted various debt-lines which MSE has recommended, and also some government bodies, but they have been less than helpful, in all honesty.

I have also considered an IVA (and I have read Martin's IVA explanation and accompanying caveats, etc.), but, with £76,000 in my parents' name, as mentioned, and with the threat of losing my flats with any such IVA, then I fear being saddled with this £76,000 amount without then having any assets (flats) should I plump for an IVA.

Bankruptcy is naturally something I would like to avoid, although, of course, I'm realistic enough to appreciate I may be out of options now.

For what it's worth: I'm a 37-year-old male, who has got burned badly by the property downturn and is in jeopardy of forcing my parents to sell their only asset to bail me out of a financial meltdown at a time when my father is still himself not out of the woods in terms of his own mortality. My health, as you may imagine, is also suffering very badly -- and, having had major brain surgery in the recent past, then this is not especially helpful -- and I feel as if I'm staring into the abyss right now, one panic attack away from a nervous breakdown (something I can ill afford financially given the above).

PLEASE... if anyone can help or would even be prepared to meet me over a coffee to perhaps suggest to me any way out of this horrendous situation that I find myself in, then I really cannot emphasize strongly enough just how indebted and grateful to you I would be.

Whatever the case, though, thanks so much for reading this and apologies if this may have inadvertently contravened normal forum protocol -- this the first time I have ever used a forum.

Many thanks! S

niksyg

My god, that's a lot of money! Well, congratulations on making the effort to write it all down on here and start looking for help!

I have to say that I am not all that knowledgable about mortgages etc as I don't have one, but my first instinct would be that surely selling a property would help? The first rule of becoming debt free is that if you can't afford it, you can't have it and it seems to me you can't afford these 4 flats. I know they are an investement but surely they're not worth it given the state you're currently in?

I hope someone comes along soon with more useful help

Take care N x

savingmummy

Martin dont post on the forums anymore due to how busy they are.
BUT there are alot of people here who have experience of high debt, some are CAB advisors and have alot of knowledge on how to get the help needed.

I think you really need professional debt help and although some have been unhelpful in the past hopefully you will find one who helps you back.
Can i be nosey to ask how you got in so much debt?

Good luck x

*MF*

Hi ...

Many of those who post on here - each with their own problems - find help here, and I hope you do as well.

You mention having had contact with advice agencies, but not found it helpful - it might help those responding to you to know who you have contacted.

As someone who is new to the forum -are you aware of this thread and links to one such source of advice and help (one most on here would recommend I believe):

http://forums.moneysavingexpert.com/showthread.html?t=1231527

You mention your parents house as being their "pension pot" - that could mean at some stage they may consider downsizing - is that what is intended? I ask because it may be one way of separating you and your debts from your parents - which to me (without more details) seems essential - if it can be managed.

Sorry - that doesn't give you answers, but stay calm and I hope you will get those as we think thru' how best to suggest helping.

niccatw

Hey there!

Try filling out a SOA http://www.makesenseofcards.com/soacalc.html to see exactly where your money is going. Folks are generally very good at giving advice on where to cut back - albeit it blunt! Bear in mind, when we are being blunt, it's because we've been there and are currently working our way through it.

Before selling your folks place, any chance you can sell one or more of your buy-to-lets? I appreciate you might not get the amount you want for them right now, but you need to reduce your outgoing and get that debt down - you might need to seriously consider this as an option.

I'm sure you've had a look throught the forum and read some of the DFW diaries - they are full of inspiration - just look at how much some folks have managed to clear in a year to keep your motivation up. You've made a start by coming on here and if you put your mind to it, you'll be able to get stuck into it in no time. Good luck

gotmaintvtr

wow thats alot of money. i dont post on here much but id just like to say good luck and hope your sort it all out.

sallyx

Ok firstly you say that some of the debt is in your parents name. Are they loans and are they secured against their house? Are all the mortgages for the houses/flats in your name? and only your name? What has all the loans/debt you have accrued been used for? i.e. have they been robbed from peter to pay paul so to speak? Have you had these properties valued in the last month?

Can I ask what you do for work? Is there any chance of you getting a second job?

immoral_angeluk

With that level of debt you are never going to repay it on debt management plans or IVAs. I do believe your only realistic option in this case would be to go bankrupt unless you can imagine things dramatically improving in the near future. You need to see someone about this now, preferably with your mum.

Ames

Firstly, you need to take your email address out of your post, it's just asking for spam!

Some of the bills you mention, like service charges, should be paid by your tenants.

DarkConvict

Have to ask, these loans in your parents name, did you have their permission to take them out. If not ....

The problem with bankruptcy is it only wipes out debts in your names, you will be leaving your parents with £70k of debt!
The houses you have would be taken by bankruptcy so still leaving you with no assets to pay off the debt in your parents name.

Snippa

I have contacted various debt-lines which MSE has recommended, and also some government bodies, but they have been less than helpful, in all honesty.

First be honest. By less than helpful do you mean didn't tell me what I wanted to hear?

I don't mean that to sound nasty, just realistic. With that amount of debt split between you and your parents, and five houses between you, it's going to be really difficult to get rid of the debt without losing some, or all, of the properties.

Really, you only have 2 basic options: pay the debt off somehow, or go bankrupt. If you go bankrupt, it's very likely your parents house will have to be sold to pay off creditors, if some of the debt is secured on that.

You (and your parents) really need to get some advice from someone like the CAB ASAP, to see exactly what your options are, and get the figures. There may be some scope for your parents to do something like mortgage-to-rent, if the worst comes to the worst and their house is included in bankruptcy proceedings.

I really wish there was some better answer, but I honestly can't see an easy way out.