Secured loan - rate negotiation??

jillkanga

I am in a situation where I am unable to continue to pay secured loan due to financial difficulty. Existing secured loan is being charged at 10% and runs for further 25 years. I have notified Picture Loans that I will not be able to continue to pay the set repayments and am seeking reduced payment agreement - which they say is not possible. My property value is still at approx 117% ltv = full secured loan would not be fully repaid if where to sell. I explained I may be considering bankrupcy - but obviously they were not keen as they know they wont get full repayment. My question is - has anyone else been in similar position and managed to negotiate reduced repayments over the long term or even revert to interest only for a period of time - until property value increases or until income improves??? thanks

Tixy

Hi

Secured debt is a priority debt. Do you have any unsecured debts that you are still paying? If so you should cut all of them back to token payments only before not paying the secured loan repayments.

Have you done a detailed statement of affairs (income & expenditure) and gone through every line in the expenses to see what you can reduce/cut the cost of. or cut out altogether (if luxuries).
If not then I would suggest you do this first. If you need tips and pointers on saving money then you can post the statement of affairs on the debt free wannabe board and people there will help suggest ways you can change things so that you can meet these payments.
This is a good form to use for your statement of affairs and its worth completing (even if you don't want to post the result) - http://www.makesenseofcards.com/soacalc.html

If you have tried all this and even with only paying £1 to any unsecured creditors then I would seek advice from one of the debt charities here -http://forums.moneysavingexpert.com/showthread.html?t=2077631 before trying to negotiate further with picture.

jillkanga

Hi Tixy, thanks for responding - very useful and comprehensive. Appreciate your time replying