Drowning-any advice plz

melons_2

Hello
If anyone can give me advice plz it would be greatly appreciated as can't cope any longer with the debts as they are .
It's a long story but i will try and put across all revelance.
My partner we have 2 kids together he is a self employed contractor.
A few year ago he had a very good year and then lost his major contract due to company closing a plant down.Anyway he was out of work for 12 months ,little bit of agency work here and there not much ,we lived off what money we had from house sale and savings.Then we got hit with a big tax bill of £24,000, which the IR put extreme pressure on us to come up with the money asap and told us to get a loan anything.We had a charge put over our house and we were days away from the Bankrupty date at the high court.
We had an unsecured loan through Backford loans and approached them they
managed to find a lender, the only one that would deal with us and this loan was secured against our property for 10 years and the interest rate is 16%.
Backford made £1200 comission from this business.As we were desperate and scared to death of losing our house we went ahead with the loan.
We did approach our existing mortgage company but they weren't interested
as we had only been in this property 17 months at the time,we have now been in the house 5.5 years and we have had the crippling loan 4 years.We have been robbing peter to pay Paul for 4 years now and can,t go on.
We can't move the loan because we are in arrears and you need a good payment record for at least 6 months.We are in arrears by about £3000 to our main mortgage company, they are sending debt counsellor out shortly to the tune of £100 payable for us.
Do you think it is wise of us to try and approach them to remortgage with them so we can get rid of that crippling loan,is it wise to tell them about our other loan we are in arrears with both at the mo.We have been in arrears before to the point of being weeks away from repossession and managed to pay the money, but we juggling all the time and i can't cope with the stress it's causing to our quality of life.Feel like we are in catch 22 situation.
We do have equity in our house due to the rise in houses over the last 5 years.We don't have holidays or a fancy car,we don,t spend it on socialising so can,t tighten our belt anywhere.To top it off partner's work dried up for the time being so he is out of work now 4 weeks .But his line of work kicks off in the new year.
Any advise plz,what we could do with that loan it's a killer.
M

bride2be2006

Hi there, welcome to MSE, sorry to hear you are having such a hard time, I am really not very much use as I have no experience in this sort of thing, I think the counsellor who is being sent out will be able to advise you what is your best plan of action though. Just wanted to say hello and offer you some emotional support. Good Luck

tobedifferent

Big hugs to you in this tough time.

I'd give the CCCS or PayPlan a ring to see if they can help, the links are at the top of the page. This would probably be a good start as they only have your best interests at heart. Keep the appointment with the counsellor as well as he may also be able to provide solutions to help you keep your home.

Whats the value of your house and what is the amount outstanding on the mortgage and secured loan?

People may be able to provide more help if you show us a statement of affairs, which shows all your income and outgoings. There is a sticky thread near the stop of the page which explains how to do this. The debt consellors and CCCS etc would want to see this also so its a useful tool.


TBD
xx

tobedifferent

By the way you will need to tell them about the other loan, give them the full facts explain what happened and most importantly try and come up with a plan to get you out of it. Lots of people are here to help.

LITTLEMISSSHOPPER_2

Hi there, I know exactly what your going through. I was in a similar situation last year. We took out an IVA which basically is a way of safeguarding your house. You pay a monthly amount for 4 - 5 yrs and then depending on what equity you have in your property you remortgage to pay back a lump sum which is considerably less that what you owe - up to 75% of the debt is written off. This could be a way of getting rid of your loan - they work out an affordable monthy amount for you. It was an absolute life saver for me. You need to consult an insolvency practioner to find out more.

Good luck, don't let them grind you down

lynzpower

Hi there

Can I ask

Who is this debt counsellor employed by?
Am i right in thinking that you have to pay them to come out?

please answer these and we will take it from there

Welcome
lynz

melons_2

Thanyou for your replys and support i will look through the links you recommended.The debt counsellor is being sent out by our mortgage company.
We have about 150k equity in our house,mortgage is about £900 a month and loan is about £700.don,t know whats left on the high interest loan we are 4years in to the 10 years.We probaly owe about £25,000-30,000

piggeh

I don't see why you should pay for a debt counsellor, and I would think they'd have your mortgage company's interests more at heart than your own. You can get free debt counselling through the CCCS & Payplan. Inform your mortgage company that you are going through a debt conselling charity rather than paying for advice, and cancel the visit for the £100 counsellor.

I think an IVA would mean you'll pay what you can afford, and wont lose your house as any court will be able to see you're doing your best to pay what you owe. It was a few years ago I went through all the turmoil with my debts but I don't believe anyone can force through bankruptcy if you are showing that you are making a positive effort to pay off your debts.

CLAPTON

can you post a full SoA...a list of income , spending and the details of all the debts, minimum payments and APRs... also say how much the house is worth and how much the mortgages.

without seeing the full financial details its impossible to really give approptiate advice.


for SoA details see...

http://forums.moneysavingexpert.com/showthread.html?t=107280

Richard_S

piggeh wrote:

I don't see why you should pay for a debt counsellor, and I would think they'd have your mortgage company's interests more at heart than your own. You can get free debt counselling through the CCCS & Payplan. Inform your mortgage company that you are going through a debt conselling charity rather than paying for advice, and cancel the visit for the £100 counsellor.

I think an IVA would mean you'll pay what you can afford, and wont lose your house as any court will be able to see you're doing your best to pay what you owe. It was a few years ago I went through all the turmoil with my debts but I don't believe anyone can force through bankruptcy if you are showing that you are making a positive effort to pay off your debts.

Hi piggeh,

Any creditor can petition for bankruptcy if they're owed more than £750 and a secured lender is very likely to do just that especially if there's equity in the property.

Melons,

You really do need to speak to one of the charities such as CCCS, they're completely impartial, don't charge you anything and will tell you exactly what your options are.

If you had to pay £24k in tax in a previous year and your self employed income is reduced in this year, is there any chance that you are due a tax rebate?

Are you claiming all the tax credits you're entitled to and is your OH able to claim any benefits when he's not working?

Regards

Richard

melons_2

hi.
Thanks for the replys.
no rebate they just knock it of a following tax bill.
He earns too much at the mo for tax credit.when he gets the work,we should be putting away for a rainy day i.e for when his work goes quiet but we can't because we paying arrears off all the time trying to play catch up.In 2000 and 2001 he had poor years work wise and our lower tax bill following reflected this .Ive had a look at the iva and don,t want to go down that route.especially since i read your name goes on a public register !
I will get him to speak to the cccc people tomorrow.
The other loan we took out at 16% for the IR is a re-mortgage.
Our main mortgage which is with the biggest lender ? is around 6% interest rate.Do you think it's in our best interest to try and re-mortgage with them at the lower interest rate ,i'm sick of the high interest rates we get hammered for as self-employed people.
p.s i only found out last week his re-mortgage was at 16% ,he keeps me in the dark about his financial affairs but now i know it's consuming me with worry over it.