Where to start

startingafresh2363

Will try to keep as brief as possible.Just discovered my partner has debt problems after letter delivered to my home. Been with him 2 years,living with me for one. Have mortgaged house in my name.

I have some experience of debt problems- did final settlement IVA 2 years ago after been lent money from family and paying back at £200 a month - 30 payments to go still.

He was so relieved to share his worries as he hasn't known. what to do, where to go to get advice and I will help him explore the options. He had his house repossessed - bought in 2006 and at time his dad was in final stages of terminal cancer so was at home helping his mum for large period of time and couldn't deal with debt problems. He came home one day and locks had been changed and house repossessed. He admits he tried to sweep everything under carpet at time, didn't open letters. He received a letter just before xmas saying there was £35, 000 shortfall on mortgage after house sold and a £800 credit card sum outstanding which is the letter he has just received .Hasn't heard anything for a few years.

He wants to try and come to an arrangement and pay back what he can and realises he needs to face this. To try and help him I have been reading mse and it seems the things to do are as follows:
Sign up with noddle to check credit report to see full picture. The options I see after that are trying to come to an arrangement with debtors, IVA, bankruptcy. With regards to IVA/ bankruptcy options I assume joint household income will be taken into account. How would this work? He has no assets, no car, is in full-time employment. I work full-time and my outgoings alone rely on his income- since my salary decreased over last 5 years after job evaluation and losing child benefit and maintenance for youngest now just turned 18. How might this pan out if based on joint income? No equity in my house at present. Any advice would be much appreciated as it all seems very overwhelming at the moment. I have told him that there is always a solution however bleak things look.Thank you in advance.

fatbelly

If those are the only two debts then:

1. £800 credit card. Has this been defaulted? Has it been passed on to a debt collection agency? If yes and yes then they will be open to a full & final settlement offer somewhere between £200 and £600.

If he's not 'acknowledged' the debt for a period of six years (5 in Scotland) it's unenforceble anyway, which gives him more leverage.

2. Mortgage shortfall debts are treated a bit differently. National Debtline have a very good factsheet here:

Factsheet | Mortgage shortfalls

and I suggest he starts working through their standard letters at the end of the factsheet

startingafresh2363

Thanks for this

National_Debtline

Hello there,

On the face of it, both bankruptcy and an IVA could be a viable option for your partner. Given that he has no assets the bankruptcy route is likely to work out cheaper and faster - although you would need to consider whether some of the associated implications would impact him in anyway?

You can read more about both options via the fact sheets which you can find on our website:

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#3

You may also find going through a personalised budget sheet on our My Money Steps system useful:

www.mymoneysteps.org

To help your partner choose the best route forward it's vital to research all possible options, seek impartial advice and also consider whether his financial circumstances are likely to change over the next few years.

Best wishes,

David.

startingafresh2363

Some progress made- checking out credit agencies. There is a CCJ in Oct 2007- relating to the house repossession I assume. It gives a sum of £239 against the listing- does this mean it still needs paying and is one of the debts?

Re credit card debt- there is no reference to this at all on credit reports - does this mean it is an earlier debt?

Mortage details with Northern Rock show 300 payments of £426 and 300 payments of £86 both start on same date so assume this is mortage related and would be included in the sum being chased for of £35, 000 but obviously I need to make sure. We have sent a letter off asking for breakdown of figures and are starting along informal options first. No council tax debts. If there were any utliity debts, tv licence how would we find this out? Thank you

fatbelly

startingafresh2363 wrote: »

Some progress made- checking out credit agencies. There is a CCJ in Oct 2007- relating to the house repossession I assume. It gives a sum of £239 against the listing- does this mean it still needs paying and is one of the debts?

Don't assume. Phone the court mentioned, give them the court reference and ask them what it is. It is unlikely to be a mortgage shortfall debt at £239.

startingafresh2363 wrote: »

Re credit card debt- there is no reference to this at all on credit reports - does this mean it is an earlier debt?

It could mean that it was defaulted more than six years ago, and so may not have been acknowledged by payment or in writing for more than that period. As I said before, If he's not 'acknowledged' the debt for a period of six years (5 in Scotland) it's unenforceable anyway.

startingafresh2363 wrote: »

If there were any utility debts, tv licence how would we find this out? Thank you

They'd write to you.