Help!!

Starrunner

Heya,

Currently my life is spiralling out of control.

Last year, my husband and I started an IVA. All was going quite well, but since January this year we have split up.

In the meantime he has been completely irresponsible with money and we have fallen behind on the mortgage payments for the house. We have tried to sell the house but with our personal lives, seemed to have neglected it and its falling apart around our eyes. We had a seller, who unfortunately backed out yesterday and we have also just received a court order for the repossession of the house. The court hearing is June 18th.

I have considered maybe trying to see if I could get a remortgage and take the house with all its debts with me to at least keep a foot on the property ladder. But it would be an immense struggle and I have found it quite hard for anyone to consider me with my appalling credit history.

I take it if we get to the court hearing date and the order goes through for the repossession I will lose the house and the remainder secured debt will be hanging over our heads. I have an idea of what I would be lumped with and with renting prices around here at the moment I would be struggling again just to have my own place.

On top of that my estranged husband has declared he has had enough of the stress of it all and is going to be moving back to Australia to run away from all the debt.. leaving me to bear the brunt.

So I take it really the only option I have now is Bankruptcy. The idea of having a clean slate is quite good but I am so wary of the stigma with bankruptcy. I am also worried about my car, I have to commute quite far to work and need a car to get there.. Do you think they would take my car if I require it to get to work? are white goods generally taken aswell?

Feeling at a loss .. on my way to divorce and bankruptcy in one year.. what an achievement!

Your advices and comments would be appreciated.

Thanks.

user55

The experts will be along soon to help, just wanted to say hang in there and look forward to your fresh start! I don't have the experience or expertise to help answer your questions but I know you need to spak to either the CAB, CCCS or other free prrofessional help!

Richard_S

Starrunner wrote: »

Heya,

Currently my life is spiralling out of control.

Last year, my husband and I started an IVA. All was going quite well, but since January this year we have split up.

In the meantime he has been completely irresponsible with money and we have fallen behind on the mortgage payments for the house. We have tried to sell the house but with our personal lives, seemed to have neglected it and its falling apart around our eyes. We had a seller, who unfortunately backed out yesterday and we have also just received a court order for the repossession of the house. The court hearing is June 18th.

I have considered maybe trying to see if I could get a remortgage and take the house with all its debts with me to at least keep a foot on the property ladder. But it would be an immense struggle and I have found it quite hard for anyone to consider me with my appalling credit history.

I take it if we get to the court hearing date and the order goes through for the repossession I will lose the house and the remainder secured debt will be hanging over our heads. I have an idea of what I would be lumped with and with renting prices around here at the moment I would be struggling again just to have my own place.

On top of that my estranged husband has declared he has had enough of the stress of it all and is going to be moving back to Australia to run away from all the debt.. leaving me to bear the brunt.

So I take it really the only option I have now is Bankruptcy. The idea of having a clean slate is quite good but I am so wary of the stigma with bankruptcy. I am also worried about my car, I have to commute quite far to work and need a car to get there.. Do you think they would take my car if I require it to get to work? are white goods generally taken aswell?

Feeling at a loss .. on my way to divorce and bankruptcy in one year.. what an achievement!

Your advices and comments would be appreciated.

Thanks.

Hi Starrunner,

I've only got time for a quick post and a few more details would be helpful. As the previous poster said your first step should certainly be to consult one of the debt charities.

1. How much is your house worth?

2. What is the mortgage?

3. What arrears have accrued?

4. What other secured or unsecured debt do you have? Don't forget debt in joint names means that you'll still be liable if your O.H does "do a runner".

5. Would you realistically be able to pay a mortgage and your essential living expenses on your own?

6. How much is your car worth?

As far as the repossession order is concerned if you think there is any chance of being able to afford to stay there, then make sure you turn up at the court hearing.

The stigma attached to bky is subjective, I'm not proud of our bky but neither am I ashamed; anybody trying to stick labels on me will need to be immortal.

There won't be a problem with household goods unless they're very expensive luxury items.

Will try to post later, I know it's all too easy for me to say but try not to let the whole situation get you down, we've all been where you are at the moment and it does get better. Start with an appointment with one of the Debt Charities and then any further information you can post will ensure you get more meaningful replies.

Best regards

Richard

Starrunner

Thanks Richard for your comments.

1. How much is your house worth? Approx £135,000 for houses in our area, but in the past months with the storms etc the house looks like a shamble, so probably even less.

2. What is the mortgage? The secured mortgage (£9500 on an unsecured loan with Northern rock but thats part of our IVA) is £96,000.

3. What arrears have accrued? I missed one payment last year and then havent paid this year at all! ekk!!

4. What other secured or unsecured debt do you have? Don't forget debt in joint names means that you'll still be liable if your O.H does "do a runner". Other secured is £28000 with GE Money and £9000 with Welcome Finance. Unsecured debt totals about £35,000 with the IVA. Yes unfortunately the OH doing the runner is main reason why I'm forced to go down this route... and why Ive been put into this mess from the start. God if I think back to my healthy bank balance and savings when I first met him - I was great at budgetting and what not.. oh well.

5. Would you realistically be able to pay a mortgage and your essential living expenses on your own? That is a definite no.. I was in la la land thinking I might have been able to do so but unless I want to live on baked beans and use baked beans to run petrol off with.. err somehow heh

6. How much is your car worth? Around £1700

From what I've been reading online about Bkpy it states that secured debts are not cleared... so would I still be lumped with the excess of the secured after the house has been reposessed? or is that then considered unsecured once the house is gone and can form part of the Bkpy?

I also have another problem with my job I work in the financial industry, but I think I might go and speak to my manager before I do anything to let him know the situation. I mean they know all the problems I have had with my ex so if I tell them that its not really an issue with my debt management but my ex's they may reconsider. I know another colleague went bkpt last year and hasnt told work.. but our contract states its an instant dismissal.

Conor_3

Yes you'd still be liable for the secured loan after bankruptcy.

An alternative is to hand the keys back to the mortgage company before banking at which point the secured loan becomes an unsecured one and can be included. If you get rid of the house after banking, you'll be liable for the secured loan as it is an unsecured debt raised after BR.

Richard_S

Hi Starrunner,

Is the following an accurate summary?

House Value 135,000
Mortgage (96,000)Is this with Northern Rock?
GE Money (28,000)Secured on House
Welcome (9,000)Secured on House?

---

2,000

Unsecured (35,000)

There isn’t really a way you can keep the house indefinitely if you can’t afford the mortgage payments and secured loans on the house. What is vitally important though is the timing of declaring bankruptcy if that’s what the Debt Charities ultimately advise you to do. You also have to consider alternative accommodation and the effect that bky will have on your job.

I would never say to anybody that bky is their best option; that is the job of a professional advisor. All I can say is what I would do in your circumstances, and that is:

1. Put the house on the market at a price that will realise a reasonably quick sale.

2. Start looking for rented accommodation

3. Stop paying all unsecured debt

4. Start saving as hard as you can for a deposit on rented accommodation.

5. If you can’t save quickly enough then consider not paying one of the secured debts

6. If you receive a date for the repossession order attend court and explain to the judge about your separation from your husband and how this has adversely affected your finances. Usually, if the judge thinks you’re trying to make an effort to resolve your financial problems he/she will suspend the order for a period of time.

I would be trying to put myself in the position where I had acceptable rented accommodation, the house had been sold and the amount of any shortfall to secured creditors a known quantity. At this point, you can either sit and wait for one of your creditors to petition for your bky or consider petitioning yourself if that’s what the Debt Charities advise is in your best interest. That way your bky will include all unsecured and previously secured debts.

I think it’s always best to hold on to property if you can, but the level of secured debt and the fact that your earnings won’t allow you to meet the mortgage payments, means that it’s probably not an option.

As for time scale, achieving the above would probably take the best part of a year so it temporarily puts the problem of your job on hold, and the same with your car, it won’t be an issue unless you eventually declare bky.

This isn’t a “pretty” scenario but it is the basis of a plan that would give you the opportunity to take control of your life again and look to the future rather than the past. Don’t forget this is an anonymous web site so don’t be afraid to admit that you’re frightened or worried or desperate; there’s always an infinite amount of comfort and support from others that have already “walked this route”.

One last thought, is there any chance that you could or would be prepared to rent a room to a lodger?; and if so how much would that be likely to generate?

Wish I could be more assistance and please make an appointment with one of the Charities as soon as you can.

Best regards

Richard

Starrunner

Thanks for all your comments Richard really appreciate it.

I have already sorted alternative accomodation with a friend, lodging with her and her family for at least 3-6 months @ £350 a month. I am due to move in as soon as I had the house sorted.. so they have kitted my room out with new carpets and been freshly wallpapered all ready for me and the dog. They are in a bit of a pickle with money at the moment too so feel like I've let them down at the moment but they understand life doesnt always go to plan. They are being a great support aswell.

I was previously thinking of maybe getting a lodger in but our second room is sooo small and even if I rented out the main bedroom, when we thought the house was going to be sold... the ex has sold the sofas and dining room table for cash for himself (the deal is that I got the white goods) so the house is bare, miserable and very lonely looking.

I dont think I could get a sale on the property as Id have the same problem we have just had. The company wanting to buy the house offered £111,000 but as the total secured on the property was more the companies wouldnt release the property without the full amount being paid, which is not something the buyer was willing to do. Wouldnt we have to clear this debt before anyone would be able to buy the house?

I notice someone else posted 'giving the keys back' to Northern Rock.. would this be a possibility before repossession? The thought of having the house repossessed sounds even more daunting than bankruptcy in one way.. I just envisage big chunky men muscling their way into the house.

Emmzi

It's still a reposession whether you hand the keys back or have burly men. It's just how stressful you want it to be...

I've been on the other side of a reposession (working for bank) and suggest you may get marginally kinder treatment if you hand the keys in, and also it'll be less fees as they don't have to pay someone to evict.. so the costs charged back to you would be lower. I know when I've had to do it the hard way, and been left with a house in a tip full of @@@p, it hasn't predisposed me to do the debtor any favours. (Not that there are many favours you can do in that situation, but a sympasthetic face is better to look at than a P--d off one.)

Glad you have a friend you can go to, it must make a huge difference!

Starrunner

Thanks Emmzi, I think thats how I will handle it.

A lil less stress during the whole thing is gonna be better than more stress!

As u have had previous experience...

What would happen once i hand the keys back to Northern Rock and they sell the house and the surplus secured with them and GE Money and Welcome.. Is it then considered unsecured?

Richard_S

Starrunner wrote: »

Thanks Emmzi, I think thats how I will handle it.

A lil less stress during the whole thing is gonna be better than more stress!

As u have had previous experience...

What would happen once i hand the keys back to Northern Rock and they sell the house and the surplus secured with them and GE Money and Welcome.. Is it then considered unsecured?

Hi Starrunner,

If you've already got rented accomodation you've solved one of your biggest problems. If you hand the keys back to Northern Rock the house will presumably make less than if you stay there; empty houses and forced sales never make as much. In the overall scheme of things though it doesn't really matter and if you hand the keys back you can draw a line under the past and you'll certainly not get as much stress and aggravtion.

Once the house is sold the selling costs and mortgage will be paid first and the balance distributed to the other secured creditors. They will then become unsecured creditors and will look to you for the balance. If you're ultimately declared bankrupt they will be part of your estate in bankruptcy.

The critical thing is to make sure you're not declared bankrupt before the house is sold otherwise they won't be included in your bankruptcy. It doesn't matter that much if you've no assets but you don't want them lurking in the background waiting for you to win the lottery.

You'll no doubt get loads of threatening letters and phone calls once the house is sold so I'd be careful about giving any forwarding address or telephone number.

Best regards

Richard

Emmzi

Well, there's nothing left to secure it against! So yes.

However, I would still be inclined to try and sell it yourself. It can be a bit more hassle but the fees the bank will lob on for selling it on your behalf will be high, and they won't go for the highest possible price.. they'll go for eg the highest price possible within 4 weeks.

When you talk about your buyer, is it an individual or one of these 'quick sale' companies? They always offer WAY below market rate!