A pretty Hopeless Situation

Wendy23

My partner and I have had severe debt problems for over a decade now. We have a mortgage of £150000 and a secured loan against our property of £43,000 on a house worth approx £190,000.

We have additional unsecured debts of £26,000 (of which £7k is in my husband's name). I arranged payment plans with my creditors to repay £1 per month about 5 years a go many of which I have defaulted on at some point. My husband has been making just over the minimum payments on his credit cards and has never entered a payment plan with them.

I received a letter today to say that I have had a CCJ issued against me, for a debt of under £1,000 which related to an unpaid credit card. I have suffered severe depression for many years and I just couldn't face dealing with this. I spoke to the company managing the CCJ today and they have said if I pay a reduced amount by 17th July the CCJ will be cancelled and not appear on my credit history.

My question is, things are so dire without much hope of resolution (I have recently lost my job and am struggling to build a new business with limited success). Would it be better to declare myself bankrupt? I know my husband would never even consider the idea, so would it be possible to transfer the secured loan, mortgage and property to be in his name only?

What options do I have to improve our credit rating? We live in a tiny house with our two young children and I would do anything it took to get us to the stage where we could buy somewhere slightly bigger. Unfortunately extending isn't an option as we have a tiny garden, are mid-terraced and the attic isn't big enough to be converted (and has a great big water tank in it).

Any help or advice would be hugely appreciated!
Many Thanks

National_Debtline

Hello there,

Bankruptcy *could* be an option. The key issue here is the property. Given the information you've provided it appears that there could be a little bit of equity within it. What the Official Receiver/Trustee is likely to do is see what the value might be in two years and three month's time. If there is sufficient equity at that point they may either want the property sold or the value of your share of the equity in some other way (often other people can purchase the 'beneficial interest). There is some useful information about bankruptcy and the home here within our fact sheet. I'm not certain that transferring the loan or the secured loan would be possible. This would generally entail your husband taking out a brand new arrangement in his name only. As far as transferring property - if this is not arranged by selling it at market value it could be reversed as part of the bankruptcy process (if it is at 'under value').

Your situation is a rather complex one and the information I've provided is pretty generic. Please do consider seeking further advice to talk through this in more detail - either to our charity or one of the others such as the CAB.

Very best wishes,

David @ National Debtline.

AgentM_2

I can't offer advice, but there's always hope. Good luck x

Wendy23

Thank you David. Will a CCJ make a huge difference to my credit file? I'm just wondering if I should make a Herculean effort to pay it off before their deadline to avoid a CCJ on my file, or just go ahead and pay it monthly?

Tixy

A CCJ will be on your file for 6years from the date of judgement.

Whether it will make a big difference depends on what else is on your credit file and whether you are likely to be applying for credit.

In terms of hoping to buy a bigger house then yes a CCJ could make it harder to get accepted for a new mortgage. But I suppose you need to weigh that against how likely it is you will be ready to move finanically within the next 6years. Plus even if you pay off this debt and don't end up with a CCJ it is still possible other creditors will take court action given your level of debt and the fact that you are paying token payments.

If you did decide on bankruptcy as an option, then a CCJ from before bankruptcy would make very little difference to anything.

National_Debtline

Good morning.

Tixy has (as always) given you a great answer.

If there's anything else you need to ask please do so.

- David.