Bankruptcy questions

Cumbrian_Male

Hi

I have a quick question, if I may?

I have about £30,000 of debts on a DMP with CCCS paying £275 pm.

We have a house which we have been trying to sell but only had 1 offer which today was withdrawn as buyers can't sell theirs' and now reducing their asking price hence can't afford to complete.

If I went BR would the OR only get 50% of equity? Property has outstanding mortgage of Approx £65k value for market £185k but not selling. Another agent valued at £165k so assume a quick / forced sale at £150K leaving £85k equity, my share clearing my debts in full.

All the debts are in my name, joint mortgage. DS 18 full time college DD 14 at school, disabled wife due to mental health.

I am currently signed off work with stress and want resolution.

Is bankruptcy viable or should we slash our sale price.

We have a property we want at £150k which we were hoping to downsize to and offer full and finals at 40-50% to my creditors, but how long I can keep them at bay is another matter.

Got 1 CCJ with charging order and another going down that route.

What are your opinions and advice.

TIA

kerryboo

Richard_s is the best person to answer this i am sure he will be on soon

Conor_3

The OR will take 50% of the equity in the house unless your OH buys it off him. With the equity you've got, it's highly likely the OR would force a sale.

IF IT WERE ME....

Sell the house. Use the equity to clear the debts. Go into rented accommodation for a couple of years or so to give you some breathing space. AS you're out of work, you can claim council tax and housing benefit so the cost of your house would be virtually free. One less thing to worry about.

I reckon the interest rates are on for a good 1% increase over the next couple of years and the price of houses is going to stay static at best or drop. Already, bankruptcies are running at four times the level they were 5 years ago and more and more people are living on the edge making massive numbers of repossessions highly likely.

At a 1-2% increase on house prices over the two years you're renting, it'll add a measly £3k to the price range you're in. Just putting away the money you're paying on your DMP in a ISA would give you a balance over two years that's virtually twice the amount the house prices would have risen in your price bracket. In fact, the interest you get on what's left from the house sale after paying your debts would cover the price rises as long as you choose your savings options carefully.

So in short, my advice:

1) Sell the house and use the equity to pay the debts.
2) Go rented. Claim Council Tax and Housing Benefit whilst you're not working.
3) Put the money you were paying the DMP into an ISA such as the NS&I ones so it'll cover the rise in the property market if there's any at all and will give you a nice lump to use as a deposit/for fees.

Cumbrian_Male

Thanks Conor.

While I am currently off work I'm still on full pay. Also wouldn't the savings left from the house sale be over any means tested threshold for housing and council tax benefits?

I agree interest rates will continue to rise but don't think another full 1% will occur 0.5% is a fair bet 0.75% tops I think. I would consider a year or 2 out of the property ladder but I would have penalties on the mortgage due to remortgaging a few years ago. Still 3 years on the tie in, but lender said would transfer it to new property fee free, just have to have valuation.

Food for thought, I think I will give it another couple weeks then reduce the price.

Any more ideas or advice, keep them coming please.

Richard_S

Cumbrian_Male wrote: »

Thanks Conor.

While I am currently off work I'm still on full pay. Also wouldn't the savings left from the house sale be over any means tested threshold for housing and council tax benefits?

I agree interest rates will continue to rise but don't think another full 1% will occur 0.5% is a fair bet 0.75% tops I think. I would consider a year or 2 out of the property ladder but I would have penalties on the mortgage due to remortgaging a few years ago. Still 3 years on the tie in, but lender said would transfer it to new property fee free, just have to have valuation.

Food for thought, I think I will give it another couple weeks then reduce the price.

Any more ideas or advice, keep them coming please.

Hi Cumbrian Male,

I copied your Thread to a word doc at work and kept reading through it trying to think of a way to improve the options open to you. The stumbling block to any other route is that you want a quick resolution to the problem and the only route I could think of is anything but a quick route. It doesn't involve bankruptcy but it does involve a lot of aggravation with creditors for months probably a year or so, and there's no guarantee of success either.

If you want to put the hassle behind you, and quickly, then I can't argue with Conor's suggestions. If you wake up one morning infused with the desire for a long drawn out struggle then I'll happily repond by posting again.

Regards

Richard

Conor_3

Indeed. Needing to do things in a hurry always leaves you having to take the less than ideal option.

Didn't know you were on pay so that kind of scuppers the CTB & HB but rent shouldn't be anymore than you're currently paying on your mortgage.

Cumbrian_Male

Richard_S wrote: »

Hi Cumbrian Male,

I copied your Thread to a word doc at work and kept reading through it trying to think of a way to improve the options open to you. The stumbling block to any other route is that you want a quick resolution to the problem and the only route I could think of is anything but a quick route. It doesn't involve bankruptcy but it does involve a lot of aggravation with creditors for months probably a year or so, and there's no guarantee of success either.

If you want to put the hassle behind you, and quickly, then I can't argue with Conor's suggestions. If you wake up one morning infused with the desire for a long drawn out struggle then I'll happily repond by posting again.

Regards

Richard

I'm intrigued Richard

I have been battling away for 12 months already on this DMP, as my position was made redundant last February.

Another 12 months is not a problem, it's the potential 12-14 yrs a DMP will take that bothers us. That's why we are trying to sell the house, to downsize and clear the boards. One of our debts has recently been sold and the DCA are being difficult, going for charging order, so adding to my stress.

I would like to hear your suggestions.

Cumbrian_Male

Received County Court papers this morning for the other debt I mentioned earlier.

Just feel like there is no end in sight, not had anyone view our house for the last 2 months, our potential buyer rang our agents to say they were having to reduce their property as it wasn't selling, so could no longer afford ours.

The constant interest rate rises has killed the market, and I don't know what we can do.

I feel useless, I'm worth more to the family dead, at least then the mortgage would be paid and my death in service will clear the debts and leave about £30k for the family. Then they could at least have a secure future and a fresh start.

Cumbrian_Male

Well the DCA got the judgement forthwith, now applying to vary the order to pay in instalments.

house still not moving.

Richard care to elaborate on your previous post?

fiveyearplan

Hang in there Cumbrian Male - insurance doesn't pay out for suicide.

Richard_S

Cumbrian_Male wrote: »

Well the DCA got the judgement forthwith, now applying to vary the order to pay in instalments.

house still not moving.

Richard care to elaborate on your previous post?

Hi Cumbrian Male,

I'm sorry I've missed you posting and I've only got time for a quick reply at the moment, I'll try and post again later this afternoon.

Regards

Richard