Looking for help!

ibroxkev

OK, bit of a long story, my wife and I bought our home 5 years ago, from northern rock through a "together" mortgage which meant we got a 125% mortgage, the house is not in negative equity but if we sold it now we could not clear the entire loan and would be left with the unsecured loan, on which the interest would shoot up if we paid the actual mortgage off. We are looking to get out of this house as it is 3 flights of stairs up and our 15-month old son has a medical condition meaning it is hard to get him up the stairs just now and he will have real difficulty once he is walking. We have been classed as general medical by the local council on the waiting list for a ground floor house, but it could still be years before we get a place from then, so we ideally would sell up and rent a place privately.

We also have other debt - 2 loans and my credit cards, probably about £6000 all in. I work full time and my wife is a full time mum, she did not go back to work so she could look after our son. We receive high rate DLA and carer's allowance for him. We are struggling to make ends meet month to month and are really looking for advice on where to go from here.

We are in Scotland if it makes a difference to anything.

some questions:

1. Any general advice on where to go from here?

2. If we were to go bankrupt what would happen to our home? We're at the point where we really don't care if it's repossessed as long as we got it off our backs, but what would happen to the unsecured loan if the house is repossessed?

3. Would it be a good idea to try for a consolidation loan to clear the unsecured loan and the rest of the loans and CCs? Although I don't think this would be affordable.

4. What about these voluntary agreements we could enter into? Citizens advice told us about them a couple of years ago but advised against them as they didn't think our situation was actually that bad, things have changed since then however with the arrival of our son and my wife not working.

Thanks and I'll probably be back with more questions as I think of them!

Kev

pure_dead_dopey

Morning Kev

I just wanted to say don't consolidate, its the road to ruin unless you are very very very organised and don't run up the money again. There are many more experienced heads on here who will be along in moment to help. Just remember there is always a solution, you just have to find it....
I'm in Glasgow, and the sun is shining, so there, that's one good thing about to-day and you have made the first step to getting yourself sorted by posting on here, so that's another good thing about to-day, so we're motoring already and its only 9.30am!!!

Good luck and cuddles to your wee baby

PDDx

Tixy

Hi Kev and welcome

I think there are a couple of things that would be useful starting points for you. 1 would be to complete a financial statement of affairs - http://www.makesenseofcards.com/soacalc.html - so that you and we can see your full financial position and see how bad things are month to month financially. Then I think you probably need to see advice from one of these organisations - http://forums.moneysavingexpert.com/showthread.html?t=2077631 I think all cover Scotland as well as England (well except the NI one!)

With regards to consolidation that is rarely the right option for people, and whatever you need a full understanding of your finances before you would even consider it.

The legal options are different in Scotland to England and I don't know all the information about them. Bankruptcy is essentially the same, an informal debt management plan (DMP) would be the same but the other options are trust deeds which differ from IVAs we have here.

With regards to what would happen with the house this would depend on whether you both went bankrupt or just one of you, however before you start considering this do write out a financial plan.

On a different note would it be at all possible for you to rent out your house and then rent somewhere else for the same money but that would be more suitable for your family?

Welcome to the board and I do hope you can find a solution with our help and professional help.