Is Bankruptcy the solution??

Jimbo_999

Help,
I have a mortgage with NRAM still £185000 outstanding, house valued at £185000, plus took an unsecured loan for £22,000 with it, most of that outstanding still. Debt's in my didstant past totalling about £20,000 and my partners debts around £10,000.

Due to all the small token payments we are paying each month it is killing us, we cannot provide a good lifestyle for our children, we currently have estimated that we are feeding a family of 4 (+dog) on about £200 per month, life isn't exciting!

My partner is self employed, so irregular income, she also is paying for a brand new car for her job, insurance, fuel, but she needs this for work (the car is in her mothers name tho)

I have a runaround worth £1000 but main question is, will we lose the house and how much will we have to live on? We can pay the mortgage payments but owing £50k on top of this what will happen? We have done home improvements and built a family home for the kids so don't want the upheaval of losing it, but equally don't want to be paying off debts until i'm 70, or is that the way we do things these days?

Oh, for a quiet youth, maybe would have done things differently when i was younger - or would I???

Ricoh

Jimbo:

I came on here today to ask a similar question, I have contacted an IVA adviser and it took him about 3 mins to tell me that Bankruptcy was the better option to an IVA, he claimed it was cheaper and more final and because I am self employed said that generally self employed people have less stable income and so little point in an IVA that may not be met.

Also because my total debts where about 36K with no assets and no mortgage, no car finance or major loans for anything, so business overdraft and credit cards he commented that it was done and dusted, very straight forward and better just to go bankrupt and 12 months later after my discharge, start the re-build of my status, he did also say it would take about 6 years to get fully right but also commented that he knew of many cases these days where people had been discharged from there bankruptcy and after about a further short period of no more than 6 months had accounts even credit cards, he mentioned that a sympathetic savvy bank manager was the key.

freddy911

As you are in negative equity the or will not look to take your home and you wil be allowed to keep up the payments however you will still have to pay the secured loan also. The or has 3 years to deal with your home so if in this time it went into positive equity they will look to release this by sale of the property if you cannot come up with the cash. If your wife's car is in her mums name I doubt the or will allow that payment.

Jimbo_999

Thanks guys for msgs.
The Mrs' car is used solely for her business, without a car she cannot work, no option of a cheaper monthly payment either due to the mileage she travels, so if she didn't have the car she couldn't work. Until a couple of months ago she leased a car but buying worked out cheaper, we couldn't get credit.
Also the loan we took out with the mortgage with nram is an unsecured loan, but I see from other people that it is difficult to split this from the mortgage as nram don't like to do that.
All we really have secured is a tie on the mortgage issued about 3 years ago probably about 2.5k at the mo, but meeting min payment on it.
Just want to know where we will stand if it is the best option, although I know it is not a set outcome.:(

freddy911

Sorry didn't realise it was an unsecured loan, as that's with your mortgage provider not sure how you would get on with including it in br and keeping the mortgage I suppose if they wanted to be arsey they could take back the house if the mortgage terms have a br clause. But then they would likely end up losing more if the house is sold as a repossession. I don't see the or allowing you to pay an unsecured loan even if it is tied to mortgage as it would be proffering an unsecured creditor.

As for the situation with the car I think you will struggle I suppose it comes down to the or and if he agrees it's essential for your wife's work to have a car worth more than the 1k allowed and also making payments to her mum for it. Think yiu will have a hard time.

freddy911

That said my ex wife had a car on hpi in my name and her or allowed her to make the payments to the hp company and keep it but that was registered with DVla in her name just financed in mine, is your partner the registered keeper? That could be key.

freddy911

Also is it on hp? Or a unsecured loan? If its a loan and you convince the or it does belong to your partner they may consider it an asset and take it. If its on hp is the outstanding finance more than current value?

Jimbo_999

Thanks for your comments Freddy;
The car is registered in her mothers name, and the missus is a driving instructor, public transport obviously not an option and due to mileage a cheaper car will not last. The finance is an unsecured loan in the mothers name from the car manufacturers finance, but the payments we have been told would class as a business expense, like the fuel she uses and a franchise fee to the company she works for, so overall she is clearing around £700 per month profit, so wouldn't make sense to sell the car or not allow the payments to go ahead, as we'd lose that household income.
It's the unknown that is daunting, dont want to lose what we have built up over the years, but need the situation sorting.:eek:

tigerfeet2006

Hi and Welcome to the Bankruptcy (BR) Board.

The first step is to make a list of all your creditors, debts and assets. Secondly and most important is contact one of the following debt charities. Please try these they don't charge and are impartial. They will go through all your options with you and if they suggest bankruptcy then come back to this board and we will help you all we can. Also if you are not ‘clicking’ with one of the Debt charities do try another. We advise you to try at least two for your own piece of mind. Your BR could be refused if you have not sought advice.

* Blue text on this forum usually signifies hyperlinks, click on the blue links below *


Main recommended sources of help:

• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)
• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111

Others:

• Business Debtline
  - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

Please don’t do anything rash make sure you take your time and weigh up your options and read everything you can.

For ‘essential’ BR info this is Fermi’s sticky.

BR friendly home insurance thread.

BR Friendly bank accounts sticky.

BR Abbreviations.

We often ask you to post your SOA so we can see if you have included what you need to:-
MSE SOA Calculator - Click here Select the MSE format at the end. Copy and paste onto your thread.


If you are new/old to this board and receive/see a comment that is not helpful or insensitive please don’t let it put you off posting, often these comments are made by people who don’t normally contribute to this board and don’t speak for us.

What to do if you get an insensitive or hurtful comment.


And do remember we’ve all been through this and anything you don’t understand don’t be afraid to ask.

In your situation I would probably contact National Debtline and they can refer your wife to their Business Debtline which hopefully should keep some continuity.

Do have a look at the links i have posted for you to.

Jimbo_999 wrote: »

Help,
I have a mortgage with NRAM still £185000 outstanding, house valued at £185000, plus took an unsecured loan for £22,000 with it, most of that outstanding still. Debt's in my didstant past totalling about £20,000 and my partners debts around £10,000. The unsecured loan will go into your BR. This is something we have seen a lot on the board, you pay the mortgage and loan into the BR. NRAM just let you carry on as normal. The OR will look at the house in 2years and 3 months after BR and at that point you will have to find the money for any equity there is in the house to give them.

Due to all the small token payments we are paying each month it is killing us, we cannot provide a good lifestyle for our children, we currently have estimated that we are feeding a family of 4 (+dog) on about £200 per month, life isn't exciting!

My partner is self employed, so irregular income, she also is paying for a brand new car for her job, insurance, fuel, but she needs this for work (the car is in her mothers name tho) The car will be a business expense and will need to come out of her gross income before you are left with her net income.

I have a runaround worth £1000 is this essential for work? but main question is, will we lose the house and how much will we have to live on? You will be able to have your reasonable living expenses for your family. We can pay the mortgage payments but owing £50k on top of this what will happen? We have done home improvements and built a family home for the kids so don't want the upheaval of losing it, but equally don't want to be paying off debts until i'm 70, or is that the way we do things these days? see my reply above.

Oh, for a quiet youth, maybe would have done things differently when i was younger - or would I???

Jimbo_999

Thanks Tigerfeet;
Spoke to the CCCS who advise bankruptcy in our situation, have done an income/expenditure sheet on CAB website which shows that our monthly excess for non-priority debts should be £84, we are currently paying around £275 for these per month, although i probably slightly over-budgeted for food etc than what we are currently using as we are skipping meals at the mo to keep the kids fed.

We have already agreed low rates with our debtors as we were both made redundant 2 years after taking out the mortgage and loan with Northern Rock and since then have not earned as much as we were.

The problem with the missus being self-employed is her income is not regular, so we have struggled for a while now getting bills paid on time. Some months she can clear around £1200, and other months it's quiet and it's £500. The annoying thing about entering into a deal is if she has a short month we have to borrow off family again to pay, but if that's what we have to do then that is what we will do.

Is it always this complicated???

tigerfeet2006

No, it depends on circumstances.

BR is never recommended lightly so it is obviously the best thing for you.

Are you getting all the benefits you are entitled to?
http://www.turn2us.org.uk/