Big Debt...could last a lifetime.

The_Hunter

Morning All,

I have been reading this forum for a while as I kne what was coming, so I am now looking for some assistance from the excellent people on here.

Sorry - its a long story, but I am going to try and break it down.

My business has gone into Liquidation, I am dealing with that along with the liquidator no problems, however stupidly a while back to continue with the massive growth we were having I signed a number of personal [FONT=Verdana, sans-serif]Guarantee's. Two with banks and one with a commercial company.

Since the business was liquidated I have been looking for a job but at the moment my ony income is JSA, plus the bit we get for Tax Credits.

I have spoken to one of the banks and they are happy to accept a token payment until I get a job providing I sign a voluntary charging order - they are sending me the paperwork.

This morning I have received the claim forms from the local county court for the debt left with the commercial company, I understand I have a 14 days to fill this in.

My budget at the moment is showing (-£200) per month so I have some work to do to get that to balance, and that's with my Mortgage on holiday until Feb 2012

My property is Jointly owned with my wife, but does have equity.

I was going to make a token offer of payment to be reviewed when I have a job but the amount is so large I'm not sure the court will go for that.

My ideal solution would be bankruptcy but with the equity in the house that's not an option or is it ?

I will keep updating this and I am sure I will have at least 2 more court forms to come over the next few days

Many Thanks.
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dazza12

I'm in a similar boat - but without the personal guarantees. However, I've got an overdrawn director's loan of about £18k, so I'm also facing the prospect of having to pay this back without the income - possibly 10-12 years of repayments. My business is about to fail - just about to call in the liquidator, and I'm seriously considering Bankruptcy.

It really depends on the amounts you're talking about - is the debt more than the house is worth?

Life isn't good if you're paying back for the rest of your life. Your quality of life will suffer, and you will end up with nothing. Having this as a constant worry WILL affect your health, your productivity to any employer will suffer and it will cause problems in your personal relationships.

As I see it, you've got two options. Sell the house, pay the charging order and the rest of the debts and either look for something smaller or rent - as you'll be technically homeless you may even be housed by the local authority depending on your circumstances.

The other option is bankruptcy. In most cases you will lose your house. However, done right you can start to rebuild your life and get these debts removed. In 6 years you can start again with a clean record. The Bankruptcy section of the forum gives very good advice and also gives details of organisations that will be in a better position to advise.

One other option to consider is an IVA. This is where a 3rd party acts on your behalf and negotiates a reduced settlement of your debts, paid over 5 years. This may allow you to keep the house, but it's never a guarantee. However, your situation is complex and it's possible that this isn't the best option.

I do feel for you as the pressure must be immense. I urge you to contact CAB, possibly the Business Debtline if appropriate as there is a way out of this.

The_Hunter

Thanks Dazza,

IVA isn't an option as at the moment I don't have an income, I have spoken to the National Debt Helpline and they have sent a load of info.

At the moment I don't have any charging orders on the house, just a claim form from the court for an amount that is going to take over 25 years to pay back even if I had a decent job.

Bankruptcy would be solution but I would lose the equity in the house (and the house), that I have worked my butt off for the last 15 years.

It's a mess, having discussed the options with my wife she is now in tears at the thought of either having to sell the house, or losing the house to pay the debt.

bugslet

As a business owner myself, I just wanted to say good luck to both of you guys. Not having been in that position I can't offer you any good advice ( touching so much wood right now).

If you have enough drive to start and run a business, you'll enough drive to find a way out of the situation however bleak things look like right now.

Hope youcan get some good advice.

The_Hunter

Thank you, your comment about drive made us smile.

I have a company looking into the PG at the moment and the validity of it, bit of a long shot but worth a look.

The bank PG's will be solid I expect and I could manage them over time, but the other I have no chance.

RAS

You really do need to read blueback's thread on charging orders, althouggh banks may be more effective than most creditors are putting on effective COs.

Link here https://forums.moneysavingexpert.com/discussion/1839539

The_Hunter

Thanks RAS - having looked, and looked again, does that basically mean that if a process is followed correctly even with a charging order we could end up with the full equity in the house should we decide to sell.

I am guessing that as I have two kids, one that is 5 and another that is 8 the chances of a force sale are slim. (I hope).

SAM147_2

Hi, not sure I can help a great deal but NatWest slapped a #10k charging order on my house and have not tried to force me to sell up (I have a 2 year old). I am paying the debt off #100 per month via a ccj and yes it will take years to pay but am slowly chipping away. I think as long as the bank knows they will eventually get their money either via the monthly instalments until the debt is paid or if I ever sell the house willingly then they're happy enough to have the CO as a bit of a security thing for themselves. Hope that makes sense and again not sure if it helps but just my situation x

The_Hunter

Thanks Sam, - the banks I can handle and even pay back once I find a job, this is a commercial company - I have no chance in hell of paying them the money now or before I die and I'm not that old.

RAS

How much equity do you have?

The_Hunter

£170k give or take a few pounds, half would be my wife's.