massive unsecured loan debt following repossession

lazza1978

Hi,
I need some advice urgently please. I took a secured loan out in 2006 for 25k with Nemo personal finance. Following my husband being out of work we fell behind with that and the mortgage he got a job with a tied house in December 2008 and we moved out. i rented the house to a friend for 6 months but we still couldn't afford the mortgage and secured loan so gave it back to RBS for a voluntary repossession. RBS sold it for peanuts much less than it had been valued at and nemo got 2k out of it. i complained to RBS that they had not got the best price but got nowhere. Nemo immediately began pursuing me, they say they have frozen the interest and i now owe 48K, they are accepting £10 it will take me 400 years to pay this off! they are now taking me to court for a money order but they say they will continue to accept the £10 a month. i need to put in my response to the claim and i need to make a fresh start. what can i do?

I live in a tied house, and will for the forseeable future.
I have no savings
I owe £500 vanquis credit card
no other real debts.
my car is bought with a private loan with my employer its worth about 6K
i stand to inherit property from my parents i cannot bear the thought that this will be taken from me,

ellesbellesxxx

Hi, didn't want to read and run - hopefully someone will be along in a min x

anniecave

Unless your parents are currently terminally ill, then I would leave the issue of a future inheritance out of the equation, as it's not relevant.

I would suggest you contact one of the debt advice charities. Have you done this? Have you done a SOA?

bargainbetty

You could consider asking Nemo for a breakdown of the charges applied, but to be honest, if you took a secured loan for £25k in 2005, effectively defaulted in 2008/9 and have only been paying a nominal sum since, then there is a chance that you do owe this sum, or something near it.

It's all well and good saying that you need a fresh start, but you do owe the money. You may have the option of bankruptcy if you are genuinely unable to pay back what you owe.

I appreciate you don't want to lose your parents home in years to come, but you owe the money. You may be able to secure lending against it later to repay this debt, or you may have to sell it. Your wish not to is utterly irrelevant to person you owe money to. I'm sorry to be so harsh, but the reality is there.

Contact one of the debt advice charities as noted above - see what your options are.

NeverEnough

Bankruptcy may well be the best way forward if you have no forseeable way of managing the debt debt. What you may or may not inherit is actually not relevant at this stage and hopefully not for a long time to come !

Best to take advice from a debt charity like CCCS or National Debtline - don't pay for advice, use one of the charities as it is likely to be independent wheras paid for services are often a rip off intended to make profits for the companies that run them.

Sometimes people cannot repay debts they owe - that's life, no need to suffer endlessly beating yourself up with guilt about owing the money, there are some very sanctimonious posters on here who would disagree and would squeeze the last penny from someone battling to repay debts due to changed circumstances etc. don't be intimidated by them! Bankruptcy law is there for a reason.

Best to take advice from one of the Debt Charities before deciding on the best way forward, as you don't want to have this hanging over you for the rest of your life with no means of repaying in a reasonable time.

RAS

Please talk to one of the debt charities - CCCS, NDL or CAP are recommended.

If you decides BR is the solution, then go over the BR forum here, where folk can help you through the formalities.

Did you sign any sort of agreement when you agreed the voluntary repossession?

Tjrw1985

Having worked in the mortgage industry, and in particular the collection and litigation aspect of this.

Firstly, RBS would have had to get the property valued when you voluntary surrendered it. They then have to sell this for a Fair Market Value (FMV) and it only has to be on the open market for as long as it says in the mortgage contract. Where I worked it was 6 weeks.

After this it is then entered into the next available auction and sold to the highest bidder.

All RBS are interested in is recovering their own debt, how much gets left outstanding on a secured loan is not there problem.

If you feel they have short changed you, you need to write a letter of complaint to them explaining this and reasons why you don't agree. If you are still not happy then you need to take your complaint to the Financial Ombudsman.

It is a well known fact that secured loan lenders, front load interest. So if you borrowed 25k and had to pay 15k in interest, the day you took out the loan, you immediately owed them 40k.

opinions4u

It is a well known fact that secured loan lenders, front load interest. So if you borrowed 25k and had to pay 15k in interest, the day you took out the loan, you immediately owed them 40k.

Your post was good until you added this garbage.

Depth_Charge

lazza1978 wrote: »

Hi,
I need some advice urgently please. I took a secured loan out in 2006 for 25k with Nemo personal finance. Following my husband being out of work we fell behind with that and the mortgage he got a job with a tied house in December 2008 and we moved out. i rented the house to a friend for 6 months but we still couldn't afford the mortgage and secured loan so gave it back to RBS for a voluntary repossession. RBS sold it for peanuts much less than it had been valued at and nemo got 2k out of it. i complained to RBS that they had not got the best price but got nowhere. Nemo immediately began pursuing me, they say they have frozen the interest and i now owe 48K, they are accepting £10 it will take me 400 years to pay this off! they are now taking me to court for a money order but they say they will continue to accept the £10 a month. i need to put in my response to the claim and i need to make a fresh start. what can i do?

I live in a tied house, and will for the forseeable future.
I have no savings
I owe £500 vanquis credit card
no other real debts.
my car is bought with a private loan with my employer its worth about 6K
i stand to inherit property from my parents i cannot bear the thought that this will be taken from me,

Hi

Secured lender shortfalls can often be disproportionate to other debts and have the habit of unvieling themselves years later.

Unfortunately they can still pursue you more or less the same as any other unsecured creditor which can seem unfair - basically a huge debt comes out of nowhere so to speak and it is not as though you have had any real benefit from it - still it has to be addressed.

Have you had a look at this very useful fact sheet from National Debtline -

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=11_mortgage_shortfalls

If possible maybe a full & final offer with a nod towards bankruptcy as the alternative if they turn up their noses might do the trick depending on circumstances of course, then again it might and most likely will not.

If all fails and 400 years of payments and all that goes with it is what you end up facing - then bankruptcy might be worth serious consideration again depending on circumstances.

The employer loan amongst other things in bankruptcy could be a serious issue so make sure you take full advice before you decide on anything.

Along with what others have put regarding free advice - might also be worth looking through these free charity 'machines' / debt remedy resources / tools - they are quite good and informative in my opinion and could give you some very useful pointers etc

https://www.mymoneysteps.org/

https://debtremedy.cccs.co.uk/start.aspx

http://mymoney.nedcab.org.uk/moneyadvice/

May not be an easy solution to this, but you never know.

Wishing you the best

bargainbetty

NeverEnough wrote: »

Bankruptcy may well be the best way forward if you have no forseeable way of managing the debt debt. What you may or may not inherit is actually not relevant at this stage and hopefully not for a long time to come !

Best to take advice from a debt charity like CCCS or National Debtline - don't pay for advice, use one of the charities as it is likely to be independent wheras paid for services are often a rip off intended to make profits for the companies that run them.

Sometimes people cannot repay debts they owe - that's life, no need to suffer endlessly beating yourself up with guilt about owing the money, there are some very sanctimonious posters on here who would disagree and would squeeze the last penny from someone battling to repay debts due to changed circumstances etc. don't be intimidated by them! Bankruptcy law is there for a reason.

If that was directed at me, please note I advised the poster to get the proper details first and then mentioned bankruptcy to her! I also advised the debt charities be contacted.

The bit about it being her debt and paying it back was a way of pointing out that just because she doesn't want to sell her parents house doesn't mean she won't have to if it comes to it. It's not sanctimonious to say that if you have the resources, you should pay back what you owe. It's honest. If she doesn't go bankrupt and then inherits, she won't be able to avoid the asset being taken into account later on, regardless of her own wishes.