Bankruptcy questions

Richard_S

Hi Cumbrian Male,

My original thought was that given you’d only got debts of £30k and equity in your house of approximately £85k then you shouldn’t have any problem raising say £15k through a re-mortgage or secured loan and then using this lump sum to negotiate full and final settlements with your creditors. It’s generally accepted that replacing short term unsecured debt with long term secured debt is not a wise thing to do. I do tend to agree with that position but there are times when I think it’s the right thing to do.

If you write to each creditor and offer them a 30% full and final settlement then you’d probably reach agreement with most of them somewhere between 30%-50%. The problem with this is that it takes a long time to reach agreement and it won’t stop the constant phone calls and letters. Any correspondence to creditors about proposals for repayment or settlement offers should be clearly headed “Without Prejudice”. That ensures that you haven’t in any way made an offer that can be enforced against you. It’ll also adversely affect your credit rating but so does bankruptcy, IVA’s and any debt that you default on.

As the situation has evolved and one of the debts has been sold then that’s going to make things even harder because once the DCA has incurred the cost of charging orders they’re not going to settle for such a low percentage. They’ve obviously got their eyes on the equity in the house and know that at some point they’ll be able to collect the debt.

What I’m suggesting is a form of self administered IVA; the upside is that you don’t have any fees to pay and you’re not stuck to a fixed budget; the downside is that it’s very difficult to negotiate with them and until the final debt is agreed you’re not going to get any closure.

Obviously I don’t know for certain whether you’d be able to raise the money to contemplate a course of action like that but if you could, it would give you the feeling that you were being proactive instead of just responding to your creditors. If you combine that course of action with continuing to market the house, then you’re doing just about all you can.

As for feeling worthless, I think lots of us have trodden that very lonely path and it really is a living nightmare. A friend of ours committed suicide some time ago over business related debt problems no doubt thinking that his family would be better of without him. Needless to say, some of the insurance policies didn’t pay up, his wife was left trying to run a sizeable business and all he succeeded in doing was making his wife’s life more miserable than his had ever been.

For sure you’ve got problems, but you’ve also got the means to make the situation a lot better than it is at the moment. If you sell the house then again you’ve got the capital to offer a %age for full and final settlement; some will settle for more, others less. I can’t really think of anything more at the moment and if I do I’ll post again. I don’t always get the chance to log on every day and do tend to miss posts, but if you’ve a specific question that you think I may be able to help with then send me a P.M.

I accept that there must be something fundamentally wrong with me, but I do actually enjoy the contest in trying to see how low you can get a creditor to accept a full and final settlement. Try and treat it like a game instead of feeling as though you’re guilty of some despicable crime. You can’t have a careless borrower without having a careless lender; your creditors are just as much to blame as you are.

Best regards

Richard

Lizzibuff

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.[/quote]

Hi Cumbrian Male

I'm sure your family don't agree! There are many times when many people have faced the same feelings as you.

Please hang on in there - if things are that bad - they can only get better!

Try to find something positive in your life to focus on - maybe spending time with your loved ones - you can have free or inexpensive days out at the park or seaside or whereever - just to relieve some of the stress and see something nice and positive in your life.

I'm sure theres a lot there - you just need to find it and remind yourself of whats good in your life.

All the very best.

Cumbrian_Male

Thanks for your reply Richard.

I know our mortgage lender won't lend us any more to refinance the debts, already looked at that. If I still had my pre redundancy income it would have worked, although I could afford the payments then too. I am highly suspicious of the sub prime second charge lenders out there, and they are the category I now fall into with defaults 2 CCJ'S and a charging order.

My biggest fear is, as you rightly saw, this DCA want the equity out of the house. I would imagine that a charging order will be next up. If we don't get an offer in the next 4 weeks we will have to look at a further price reduction.

Not feeling as sorry for myself today, its one of the better ones. Still waiting for an insurance assessor to turn up to look at my written of car. I will hang in with selling for now, the market has to pick up eventually.

badmark

If I can stop drinking 15 years ago you can sort your finances out. being in debt isnt a crime. Think well of yourself and dont let the rich conniving !!!!!!!s beat you. Good Luck!

silvercar

You have to balance the need for a quick closure with the desire to retain as much of your money as you can.

You are actually rich; it may not seem it, but you have masses of equity in your home.

Only you can judge how needy you are of a quick sale. If it is affecting your health and presumably your ability to earn, I would suggest that losing some of the equity in your home (money that you've never actually held in your hand) may be worthwhile.

I would suggest,

a) putting a link to your house (rightmove website) on the housing board. People there are very good at finding comparison properties and telling you how to make your house look its best and if it is at the right price.

b) asking your estate agent what price would yield a quick sale. Maybe an open day, followed by sealed bids may yield an offer.

c) have you considered an auction -this would guarantee you a sale in 28 days.

d) try one of the quick sale companies. The bottom line is that you will get 70-80% of the market value, but you could have the money in your bank account by the end of next week! (There are less-honourable dealers out there - the golden rule is not to pay out any money for valuations/ surveys etc, apart from that one man's money is as good as anyone elses).

You say you are suspicious of the sub prime lenders. They may be ruthless in their dealings, but provided you stay on top of the payments, they should not cause you any problem. With that much equity in your property, you should be able to find someone prepared to give a loan.

Best of luck.

Cumbrian_Male

Thanks for the suggestion.

Post on property board here.

silvercar

Cumbrian_Male wrote: »

Thanks for the suggestion.

Post on property board here.

silvercar wrote:

a) putting a link to your house (rightmove website) on the housing board. People there are very good at finding comparison properties and telling you how to make your house look its best and if it is at the right price.

I should have warned you that they will eat you alive.;)

Cumbrian_Male

silvercar wrote: »

I should have warned you that they will eat you alive.;)

All good help though, it ain't working the way it is so needs pulling apart.

Cumbrian_Male

Cumbrian_Male wrote: »

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

Just a quick update.

The redetermination went our way. Judgement rescheduled at current payment rate as CCCS DMP.:j

So some good news for once.

tigerfeet2006

Yaay! well done. It's always good when a plan comes together lol