Prison looming with high debts & mortgages outstanding

somewhat_ashamed

Hi all

Firstly, apologies if I have posted this in the wrong place. I am new to this site today and given the somewhat complex nature of my predicament I was unsure which heading this would fall under.

The long and the short of it is as follows:

I am due to be sentenced to a likely prison term of 2-3 years in around 8 weeks time. I currently have 2 mortgages on 2 separate properties, both of which are empty and on the market to be sold. One will probably sell at some point but the other is half way through a major renovation and is unlikely to reach the required asking price to clear the outstanding mortgage balance i.e. negative equity. In addition, I have in the region of approx £25k worth of unsecured debt via 4 different credit cards and a personal loan.

I have a major moral problem in declaring myself bankrupt (or whatever it is I would have to do) as I do not wish to be left blacklisted upon my release from prison. I run my own business and previously worked within a financial institution so am only too aware of the consequences of a bad credit file. However, I am now at the point of potentially having to put my feelings to one side as my partner will be unable to keep up with the required monthly repayments once I am gone.

All debts are in my sole name apart from the potential negative equity mortgage - this is joint with my partner unfortunately.

Where to turn??? Any input whatsoever would be greatly appreciated.

Thanks,

Adam

angelflower_2

Hi Adam

This is quite a complex situation and I would recommend you take advice from one of the free debt charities such as www.capuk.org, cccs or your local citizens advice shop.

I would also ask your solicitor regarding options regarding the properties.

Not sure if having issues on your credit record will hamper you more than the prison sentence to be honest as I would suspect going back to work in a financial institution may be challenging (depending I am sure on what the sentance is for)

If the option is there to go bankrupt, it may be something to consider. Morally after your release if you get back on your feet quickly, there would be nothing to stop you saving up and repaying the debts at a future date if this is something that you feel so strongly about.

Sorry cant be much more help at the moment but there will be others along shortly.

helsee

hello,

dont have any great advice im afraid but didnt want to read and run! have you checked with your solicitor or CAB where you stand legally with the credit cards etc if you are in prison? im not sure how they can pursue you if you are in prison with no income? they may wait until a property is sold and then maybe a charging order so they are paid from the proceeds?

im sure someone with more in depth knowledge- not to mention better advice- will be along soon but i hope you can resolve it all somehow, all the best.

DarkConvict

You need professional help on this matter, here is a recommend list - http://forums.moneysavingexpert.com/showthread.html?t=2077631

And for business debts - http://www.bdl.org.uk/

RAS

I suggest you get help from a debt charity and possibly one of the prison charities ASAP.

If both properties are empty, can I aks why you are not living in either.

Could your partner earn enough or get sufficient benefit support to pay the mortgage on either property?

Batchy

Sorry, you have a problem going bankrupt? I would have thought your biggest worry is getting through prison.

Not sure I would like to know why your going down, but good luck with the sentencing.

somewhat_ashamed

Thanks for the swift replies, I didn't expect a great deal to be honest. I wont get into what I have done or why but believe me I have well & truly learnt my lesson....long before the custodial part even comes into force. Anyway....

I do have a moral problem in going bankrupt as I want to repay my debts, I have an obligation to do so I feel. I borrowed the money in the first place so no matter what life is currently throwing at me they are till mine and I want to pay what I owe. Too proud perhaps...

Of the 2 properties I own, only 1 is habitable. The other is fine but in a nutshell it wont be mine for too much longer anyway (forced sale related to my legal case) so I thought it best to get my family settled into a new house (rented) before I was gone instead of having to deal with the stress of moving alone. We have a 3 year old daughter also so it was important for her to feel secure before I left.

I run my own business and will probably continue to do so during and after serving my sentence so the whole applying for future jobs thing does not concern me too much at present. However, it's the credit file that really bothers me. You cant so much as get a BT land-line these days without passing a credit check, let alone operate a bank account. I suppose it's just something I have to get over on a personal level, perhaps sooner rather than later.

My partner does work and will claim various benefits once I am gone however, these will simply cover the cost of living and her direct debits leaving little or no excess income to cover 'my' bills.

Of them all, the negative equity property is 100% my main concern as it is in joint names. I/we need approx £300k to clear the mortgage yet due to it's semi-renovated state (currently down to the bare brick with only first fix plumbing/electrical work complete) offers are coming in the region of £200-£250k!! Even if I could ask family/friends to help cover my unsecured direct debit payments while I was gone i'd still be stuck with this headache.

I will sit down tonight and look through the links i've been given, thanks again.

Adam

Sunnylooloo

Good luck Adam, sorry really can't be much help as it is quite complex. I do admire your morals and it is good you feel that way about debt. I feel ashamed as being in debt esp as my fault! However there are ways round things and as suggested above get some good advice from independent sources.

My credit is not great as in the process of making offers on what I owe and I got a bank account from the co-op which is very baisic and I understand with a business this will probably not be suitable for you.

But good luck and I hope things work ok for you and thanks so much for your honesty

LL

RAS

somewhat_ashamed wrote: »

However, it's the credit file that really bothers me. You cant so much as get a BT land-line these days without passing a credit check, let alone operate a bank account.

Given that the joint property is in negative equity, I advise you and your partner to open new basic bank accounts ASAP. These do not require a credit check and if there is any chance that either of you make go BR stick to the co-op or barclays, as long as you do not owe either of them money.

And personally, having lived in properties I am renovating before (sole heating one cooker, loo, one sink hanging off the window catch above bare brick and three power sockets), I would have been doing an emergency second fix and trying to live there and get the mortgage interest paid. As long as one room is almost habitable it is unpleasant but not life threatening.

shopaholic2639

Adam,
Have you called your debtors to advise of your pending jail sentance? This for me would be your first step. Then depending on the outcome of that I would suggest you speak to someone at National Debt Helpline or CCCS.
At the end of the day we all make mistakes its how you prepeared to amend them that counts.
I completely understand you dont want to go bankrupt but if your prison sentance is more than a year you could come out and the bankrupcty wouldnt be a problem. I believe (please dont quote me) that in some cases bankruptcy only lasts 1 year then you can have a bank account etc again. I would also recommend you dont rule this out just yet without speaking to some proffesional about it. At the end of the day the most important thing is your family and if this means swallowing your pride for a few years then I would say thats a pretty fair price to pay.
I wish you lots of luck, speaking to the right people will set you on the right path.

RAS

shopaholic2639 wrote: »

Adam,
I completely understand you dont want to go bankrupt but if your prison sentance is more than a year you could come out and the bankrupcty wouldnt be a problem.

There are many many times when I suggest people consider BR. But to suggest that BR is not a problem is not a good idea. Anyone who has ever been BR or done an IVA has to declare this for the rest of their life if they are asked.

An undischarged bankrupt can run a business as a sole traderbut cannot be a director of a company.

shopaholic2639 wrote: »

I believe (please dont quote me) that in some cases bankruptcy only lasts 1 year then you can have a bank account etc again.

Even undischarged bankrupts can have a bank account with the co-op or Barclays, but finding a business account is very hard.