CCCS, Low Start Plans, Sell my house what to do??????

chantilly_bex

Hi all
i've posted here before re payplan and the bad time we had with them, which i won't go into now cos have posted it all before, so decided to cancel our existing payment plan with them. It wasn't working for a number of reasons, but was recently made even worse by our income being virtually cut in half due to my ongoing illness and giving up work. I've been turned down for incapacity benefit cos i haven't paid enought NI contribtutions, can't get income support cos my hubby earns £15k, and am waiting to hear about DLA.

So i contacted NATIONAL DEBTLINE and told them our situation.
We have debts of £22k, and no more that £100 spare per month. They recommended CCCS and a Low Start Plan of £5 to each creditor per month.
But at that rate it will take 18 yrs for us to pay off our debts.
She also mentioned the possibilty of selling our house, which will give us about £7k to contribute towards our debts, and renting for a while, which will stop creditors being able to put a charge on our home, and will also make them more sympathetic towards us.
My husband is having none of this, his theory is our house is all we have and he's staying put.
Is anyone in a similar boat, or has anyone done this Low Start Payment Plan?
What about selling our house, what does everyone think??
Any advice very gratefully received.

Xbigman

Big question. Can you rent cheaper than your mortgage costs?

I'd say you need to rent for £100 a month less than the mortgage to make it worth while selling. And you'd still be 15K in debt (assuming your house price doesn't fall and you actually get 7K).

On the info you've supplied so far, stay put.
Regards



X

jen_jen_2

your house may be seen by creditors as a way of securing the debt - a charge, it is unlikely they will get an order to make you sell your house though especially if individually each debt is quite small in comparison to the cost of your house. They will have to return to court and ask a judge to make you sell your home so they can have their money. Not many judges like to do order this especially if you are ill.

This is just for you to think about, i dont know if its a good idea for you, If creditors are going to do this it may be worth getting a secured loan BUT only if you can afford the repayments and creds are going for charges and the cost of the interest on the loan is less than the interest on the charge etc etc. Do not take this course of action lightly changing an unsecured debt for secured debt is only worth it in certain situations.

Also get advice about any creditor who takes you to court, they can only get a charge when you fail to comply to a CCJ, it is worth getting advice to try to get an affordable judgement so you dont fail and then they cant ask for a charge. (hope that makes sense).

Debt_Free_Chick

Unfortunately, I think you have few choices.

Do the Debt Management Plan. Yes, this will (might?) take 18 years to repay. But this way you are more likely to keep your current property.

Alternatively, sell your house (if you can) and offer your creditors a full & final settlement. If accepted, this will write off your debts, but you will need to rent and then save for another house.

If hubby is not prepared to sell, then he needs to accept that it will take up to 18 years for you to pay off your debts.

You could consider banktuptcy - but, again, you are very likely to lose your house.

I have to say that you have consulted the experts here .. especially National Debtline & Payplan. I'm not confident that anyone here can come up with a magic solution that they (National Debtline & Payplan) can't see.

It's difficult to be more precise without seeing your financial statement, to see if you can cut back on your expenses more. You don't need to post this, but you should review it. Do you have any unnecessary luxuries e.g. contract mobile, Sky, Broadband, Gym etc .... Take a hard look at your budget and see if you can free up more money to pay off your debts.

If not, then your options are few ...

Sorry to be so gloomy, but it does seem that your options are limited

mattp_3

You can always look into an IVA (Individual Voluntary Arrangement) - that gives you the option to pay back as much as you can over a five or six year period then the remainder of the debt will be written off.

The equity in your property will need to be taken into account though, as it is impossible to prove to your creditors that their funds haven't been used to help subsidise your mortgage repayments over the years.

If you are able to raise a lump sum, either by a remortgage or by selling the house then a full & final IVA could be the safest option.

Xbigman

I'm going to stick my neck out and repeat something that I know others don't always agree with, and is not policy for some official bodies.

Selling your home to clear debts if it costs more to rent is usually a mistake. In circumstances where you don't actually clear the debt it is definately a mistake. I'm talking about normal family homes here. Now if you can rent long term for less than your mortgage then that becomes an option. If you can't, then keep your home.

That said, you do need to pay those debts off and it will be long and hard. You just have to knuckle down to it.
Good luck, what ever you decide.
Regards


X

mattp_3

Yes if your situation is that bad and the creditors want blood then ultimately they could obtain a charge on the property, effectively turning an unsecured debt into a secured one (First National Bank were reknowned for it a couple of years ago).

Alternatively they could petition for your bankruptcy, although this is very rare as the creditor would need to cough up the extra funds to make the petition.

So whether you want to sell the house or not, you might not have any choice if you are unable to come to an arrangement with the creditors.

chantilly_bex

thanks for all your replies
we are getting 3 different estate agents to value the house on tuesday to give us a better idea of what we have equity wise.
also gonna have a chat with a friend of a friend who's a mortgage advisor find out some more about further advances.
i suppose i just want the easy way out (who doesn't) and just don't see taking 18 yrs to be debt free as an option
will keep you posted

Xbigman

Yes if your situation is that bad and the creditors want blood then ultimately they could obtain a charge on the property, effectively turning an unsecured debt into a secured one (First National Bank were reknowned for it a couple of years ago).

Alternatively they could petition for your bankruptcy, although this is very rare as the creditor would need to cough up the extra funds to make the petition.

So whether you want to sell the house or not, you might not have any choice if you are unable to come to an arrangement with the creditors.

I think that this is all a bit premature. With the debts detailed so far a bankruptcy petition is highly unlikely. A charge on the house is a possibility but in a scenario where your have someone who is facing their debts and paying them off, even if very slowly, a charge is unlikely.

You also have to look at wider issues. Is the debt credit card related and high in proportion to the debtors income? If it is any court proceedings will be hard work for the creditors as they can be accused of irresponsible lending.

Within the narrow view of this thread so far, selling makes no sense. You also have someone with an ongoing illness and trying to claim DLA involved. That would tend to give you much more time to play with any way.

If the couple in this thread would like to post more details of their income / debts then I am sure many of us would be willing to give more advice/opinions.

I am really concerned that there is a lot of general advice floating around this thread which is just confusing the issue.
I'm not an expert on anything and others no more about the technical side of things (Debt_Free_Chick is a very knowledgable poster and I am in awe of her ability to provide links to other sites/threads) but I've had a house repossessed and been pushed into the local rental market, and I think I know about the practicalities of these things.

My advice is still this.

Don't sell if renting would be more than your mortgage.
Regards



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