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Debt Help / Advice Please!!!!

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
4 replies 714 views
Red_TowserRed_Towser Forumite
2 Posts
edited 30 November -1 at 1:00AM in Debt-Free Wannabe
We have been in a debt management plan now since 2008, and although we've managed to maintain it we have not seen our financial situation improve if anything it has got worse!
It’s got to the point now where it is affecting my marriage and getting both me and my wife down.
I want to look at other options like an IVA but payplan (who my DMP is with) say that will get rejected due to the amount of debt I have and how much I earn!
I am now considering sell me house; although that would just about clear my mortgage it would not touch my creditor debt.
I have also looked at selling to one of these companies that let you rent it back but to be honest I don't know what to do anymore! Hence posting on here!

It annoys me really, Yes it is our fault why we got into debt we was young & naive and took on too much and was badly advised but we both work hard and are trying to sort things out but the hole just seems to get bigger and bigger and then you see other people for example a bloke I know has a business and went bankrupt (he wasn't shy in telling people about it either, in fact it was like he was proud of it!) owing hard working people and other business thousands for work he failed to carry out but for some reason though he is still in the big flash house he owns, is driving a big flash car and has now started a new business with a different name, basically getting away with it! How can that be right!

Replies

  • edited 28 February 2011 at 5:13PM
    TixyTixy Forumite
    31.5K Posts
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    edited 28 February 2011 at 5:13PM
    Hi and welcome and sorry to hear you feel things are getting worse. Have your circumstances changed since you entered the DMP? your incomes reduced? or just cost of living increasing causing the problems?

    You say you are considering selling your house and clearing the mortgage with it? would you be able to rent another property for less than your mortgage costs you? or were you thinking of selling the house which would then enable you to go bankrupt?

    How much do you currently owe and how long is your DMP predicted to last at your current repayment level?

    Personally I have never seen a post about a good experience from these sale and rent back firms and have seen plenty of negative posts - and this recent MSE article http://www.moneysavingexpert.com/news/mortgages/2011/02/which-reports-two-sale-and-rent-back-firms-to-the-fsa-

    Edit - hmmm can't get that link to work - the article here on MSE is titled Sale-and-rent-back firms give 'woeful' advice and can be found under the mortgage & homes news section (its a new article from 22 Feb so should be easy to find - even if not easy to link to...)
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • Hi Tixy,

    Mostly cost of living and my wife was made redundant about 18 months ago although she is back in work now.

    My DMP is for around £86K and the plan is due to last until 2056!!!

    I could probably rent for a bit cheaper but I would still have to sell my house and in this market that could take ages!!

    I just feel that 4 years in a DMP have been wasted!!
  • TixyTixy Forumite
    31.5K Posts
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    Ouch - thats just not realistic to keep on with your DMP. But I can see what Payplan are saying in that an IVA is very unlikely to be accepted on those kind of figures.
    I would seriously think about getting some advice from one of the debt charities and considering bankruptcy. You'd probably still have an income payment arrangement for 3years but probably better than a 45year DMP.
    Are the debts just in your name or in your and wifes? If predominantly in 1 person's name it might even be possible for just one of you to consider bankruptcy and for the other still to be able to keep the house (if there is no equity in it). Its not an area I know loads about but I would look at it as an option - IMPORTANT - Where to seek professional impartial advice about your debts.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • There are people on here with a lot more knowledge than me but my reaction is that selling your house is only going to clear your mortgage debt which is almost certainly at a lower rate than other debts. While you will have cleared your mortgage you will still have debts and will have to pay for housing. As Tixy asks, will your rent be lower than your mortgage? In today's general circumstances the answer will probably be no.

    If you are looking to use the house to clear debt, is there any equity in it? Remortgaging is not the answer for everyone because of the elf discipline involved.

    The answer lies in cutting outgoings and so posting an SOA on here is your best bet so that the good people on her can suggest solutions as well as offering advice on the 101 ways there are to increase your income.

    No doubt a long hard road still lies ahead but a new plan is needed and with the elp of people on here you WILL achieve it.
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