First Plus - no compromise whatsoever!

Maxnana

My husband had a long conversation with Red Castle Recoveries today who are dealing with our arrears to First Plus. We have a £100K secured loan with FP with repayments of around a grand a month with still 16 years left to pay. The repayments are now £3000 in arrears, hence the Red Castle involvement.

Anyway, we are planning on handing the keys back to our mortgage company then going bankrupt, mainly due to the fact that we can no longer maintain this secured loan payment at that rate.

However, a couple of people have suggested to try a last-ditch attempt at getting FP to reduce the payments to a manageable amount right until the end of the term, and accept that as full and final settlement.

This is why the husband phoned them (via Red Castle) today, just to sort of sound them out.

He offered £500 a month for the rest of the term (16 years) as full payment. That means they will get £96K of their £100K back. They refused. My husband told them that due to that refusal our only other option is to hand the keys back to our mortgage company, who would then repo the house, sell it, and get their money back, but that there would be nothing left for FP because of the massive negative equity, and in addition rendering the loan unsecured.

He said we would then go bankrupt to take into account the mortgage shortfall, and when that was in place FP would find they will get maybe a couple of grand back via an IPA over 3 years.

Their reply?

'Do what you have to do' !!!

Thought Carol Vorderman was supposed to be good at sums???!!! :huh:

System

From my own limited experience, I would have thought it too soon take make this kind of offer and have a reasonable chance of success. 'Full and final' offers on credit card or loan debts for example, are usually done much futher down the line.

Maxnana

messedupmoney wrote: »

From my own limited experience, I would have thought it too soon take make this kind of offer and have a reasonable chance of success. 'Full and final' offers on credit card or loan debts for example, are usually done much futher down the line.

It was just a last-ditch attempt, as I said, before bankruptcy and repossession in order to give them, and us another option perhaps. As there is not going to be a 'further down the line' as far as continuing to pay at the full rate is concerned.

A couple of members just thought it might be worth a try, that's all.

wildheart83

Sadly it's that kind of attitude that's led to a lot of people going BR and the lenders getting a big fat zero. It certainly doesn't do any harm to ask, at least you know you've tried

SteveABC

If you do go BR, they (FP, or their preferred debt recovery company) will still chase you for payments. They can, and will do that because the secured debt will not fall into your BR until the house is actually repo'd.

This was my experience - the hassle was daily sometimes and it made me ill. You need to prepare yourself for this, although there is not a lot they can do ultimately, as you will be BR and you will have no excess income to pay them if an IPA is in place.

Good luck.

Maxnana

SteveABC wrote: »

If you do go BR, they (FP, or their preferred debt recovery company) will still chase you for payments. They can, and will do that because the secured debt will not fall into your BR until the house is actually repo'd.

This was my experience - the hassle was daily sometimes and it made me ill. You need to prepare yourself for this, although there is not a lot they can do ultimately, as you will be BR and you will have no excess income to pay them if an IPA is in place.

Good luck.

Could I just ask - which did you do first: bankruptcy or repo? We are planning on finding a private rental, then handing back the keys, then going BR at some stage after that.

SteveABC

This is what I did:
1. Found privately rented accomodation FIRST. (Check tenancy agreement to ensure it says nothing about BR).
2. Moved out and into the new rented property.
3. Went BR (day after I moved in to my rented property)
4. I then wrote to NR and FP (the two secured lenders) just to say I had left the property, was now BR (enclosing BR order from the court), and would not be returning (you don't need to give them too much info). I enclosed the key with the NR letter. DO NOT specifically say you want them to repo - just let things take their natural course.

This was the sequence for me and was what I was advised to do by CCCS.

NOTE: CCCS advised me not to sign anything from the secured lenders, specifically a "deed of acknowledgment" - this would mean you agree to pay any shortfall after repo and it would not be included in your BR.

Hope this helps. I'd advise getting as much info as possible first - CCCS (Bankruptcy team) were extremely helpful for me.

silvercar

If you can face the hassle, another option is to pay your mortgage and just stop paying FP. Play the long game and wait to see what they do.

SteveABC

Hi Silvercar

Yes, it's an option, and one I considered, but for me the "hassle" became unbearable and I started to suffer from mental ill-health.

It's such a difficult journey.

Take care.

silvercar

SteveABC wrote: »

Hi Silvercar

Yes, it's an option, and one I considered, but for me the "hassle" became unbearable and I started to suffer from mental ill-health.

It's such a difficult journey.

Take care.

Fair enough, remember your health is more important than money.

NeverAgain_2

Maxnana wrote: »

Could I just ask - which did you do first: bankruptcy or repo? We are planning on finding a private rental, then handing back the keys, then going BR at some stage after that.

Max,

You don't 'do' repo - the lender does that.

Hand the keys to them by all means, but doing do has no legal meaning.

What it may do is make the lender act a little faster, but what they do and when they do it is up to them.

Of the things you can control, renting a house then going bankrupt is the preferred order.