Secured loan query

novy

Hello

I have a solicitor's bill to pay which is now around £15,000. I've been paying small lump sums here and there for a couple of years but now they require payment in full otherwise they will commence legal action against me. In fairness they have been reasonably patient with me and my intention is to pay them in full. I've had some cash flow problems and have had to help out my children.

I would like to take out a loan to pay the firm and would really appreciate any advice that you can offer.

Unfortunately my credit rating is rock bottom and I have a ccj.

I have a mortgage on my main property where I live with my husband and children. I also have a second property which we used to live in and has been left empty for several years whilst I have been renovating it. My intention was to sell this secondary property and pay the solicitors and also clear some other debts. The issue is that the renovation has taken far too long. It is almost ready but the firm are demanding payment now and I don't want to run up further legal bills if they take it further.

I wondered about taking out a secured loan against the second property. There is around £60,000 - 80,000 in equity I think in this property. I don't think i could get an unsecured loan considering my credit rating. My income is around £50k.

My query is what are the downsides to taking out a secured loan in this context? I was thinking of taking one out for around £20,000 to clear the solicitors bill and then a few other bills. My intention would then be to sell the property over the next couple of months and repay the secured loan.

Can you actually sell a property which has a secured loan against it or could the company object? I really don't want to have to keep the loan for 10 or 15 years, I just need it really as a form of short term financing even though really it is a longer term financial product. There would be plenty of equity to pay them following sale of the property and I understand I would incur perhaps a months interest penalty.

I would then like to rebuild my finances and improve my credit rating gradually over time. I just need to get out of this current mess.

Are there any particular firms that people would recommend that offer secured loans? I'm a bit weary of non-mainstream lenders but realise that my options are limited.

Thank you for any advice that you can offer.

Novy

Rafter

Sounds like you really need a mortgage that you are going to repay fairly sharpish without penalty.

Your issue will be getting one if your credit rating is poor.

If your husbands rating is ok, you could transfer the property to him, get him to take out a buy to let mortgage (one without early repayment fees or big up front fees) and then sell it having cleared the other debts to repay the mortgage and give you some left over.

Otherwise a sympathetic bank might be prepared to offer some sort of bridging loan.

Good luch.

R.

27col

It sounds as if you need to sell the property as soon as you can for what you can get. I can understand that the solicitors would be getting a bit arsey about someone with two properties, not making any serious effort to pay off what they owe them.