In Negative Equity

MammaCas

Dear all

Has anyone any ideas on my situation which is fast taking over every waking moment and I can't see a solution....

We have a house worth £155K, o/s interest free mortgage of £119K (inc ERC's) and Secured Loan of £53K (inc ERC's) so are in negative equity.

We also have about 30K of unsecured debt that we just cannot manage. We have not got in the mess by living in luxury, but by living beyond our means and burying our heads in the sand. The secured lending has got to go it is costing over £1500 per month.

The Secured Loan company will not change it to unsecured.

Does anyone know a way out of it?

Thanks in advance

Toto

Hey Mamma welcome to MSE.

The first thing to do would be put up an SOA, if you look at the top of the forum page you will see a sticky for first time posters with loads of info. We'll have a look through your figures for you and let you know what we think you could do.

Have you spoken to any of the debt counselling services about your situation? Payplan, CCCS or the CAB debt advisor would be the ones I would suggest. They are non-judgemental and will help you to deal with your creditors and find a solution for you.

You've taken the first steps already, there is always a solution to debt problems and if you stick around we'll walk through yours with you too.

HannahandMark

Hi Mamma,

We're new here but taking comfort from all the kind people on the site.

Stick around and help will be along.

Good luck and loads of hugs.

H&M xxxx

peb

As Toto says; put up a full list of incomings and outgoings so that we can delve and try and find savings. So far as the negative equity sitation is concerned I am afraid you are stuck with it - no lender will change a secured loan for a non secured one.

You could try getting finance elsewhere to repay the secured element but I would expect that would be at a higher rate of interest so you would be paying more. The only other option may to be ask if the term can be lengthened if you really cannot afford it - however you will pay much more in interest.

I am a little bemused where you say interest free mortgage - is this the case i.e a mortgage with a family member or do you mean interest only?

post more and see what we can do to help

MammaCas

Sorry, I meant interest only mortgage.

Just a few things - Husband is trying to find better job/more work but he has history of depression and finds it difficult to hold a job down, which is why he is self employed at the moment.

I want to do an IVA but secured borrowing is crippling us. We can't sell house because we are in neg. equity and if we go bankrupt we still won't have enough to pay secured lending.

We are currently juggling all the debts about so not actually paying anything and are also supplementing our income by taking more credit which has got to stop.

The whole thing is making me feel sick and I have been tearful all day today the enormity of all of this is getting too much.

Monthly Incomings:

My salary - £1,100
Partners salary - £450
Tax credits - £259
Child Benefit - £75

Total - £1884

Monthly Outgoings:

Mortgage/Rent - £980 interest only locked in for 2.5 more years
Secured loan - £500
Council Tax - £80
Gas and Electric - £90 have already switched
TV License - £10
Sky £45.99 cancelling end of month
Phone - £15.00
Mobile - £30.00
Broadband - £24.99 dropping down to cheapest option
Food - £200 - inc nappies
Car Insurance - £29.00
Petrol - £70
Life Insurance £37
Water rates £20
Buildings and contents ins £20
Childcare £480
Sundries (MOT, Tax, birthdays) £30
Clothes £40
Dentist/Hairdressers £20

Total: £2725.98

Debts:

Nationwide Credit Card £9000

Barclaycard £4000

Nationwide Loan £2000

Abbey Loan 9800

nationwide overdraft £1200

Abbey overdraft £350

Beneficial Finance £4000

MBNA AO~L £600

Alliance Leicester overdraft £250

Alliance Leicester credit card £4000

Help! :eek:

In_Search_Of_Me

big hugs for you mamacas...I really do think that you should ring CCCS or one of the free agencies to get some help. We will all be here for you emotionally but I suspect that you are struggling to get credit at this stage & are living on o/d and CC's and as you say this cant go on. It is SO tough to deal with things but I promise you that once you start tackling it the fear goes and that makes life so much easier to manage. My heart goes out to you...keep posting and remember you are amongst people who do understand that gut wrinching "oh ****" feeling and we're right here with you!

MammaCas

Hiya
Thanks for replies so far - I have already done the debt remedy thing on CCCS website but it just says we need to increase our income. This is proving v. difficult to do.
It is nice to know that there are people who understand - because believe me my family and friends wouldn't :rolleyes:

lynzpower

Hiya

im seeing that your childcare is 480 and your OH brings in only 450.

Wouldnt it be worth looking into if OH could look after the little ones, and then maybe get a night time or evening job to bring m9oney in ( eg call centre/ supermarkets type work).

It seems silly to pay out more than you bring in in terms of childcare TBH.

MammaCas

Hiya Lynzpower

Thanks for the reply.

£180 of the tax credits is for the childcare but I know what you mean.

I am trying to change jobs in my company so I can work lates and have no childcare at all, hopefully this will come off in the next couple of months.

Unfortunately it still leaves the secured lending problem

lynzpower

You only have a few options where secured lending is concerned to be honest

The first is sell the house - and any secured lending that isnt paid off by the proceeds of the houses sale, should be converted into an unsecured loan that you pay back over time. the difficulty is is that under current situation you wont have the income to pay for it.

The only second, and im afraid only option I can see is that you look into bankrupcy or an IVA. I expect bankrupcy, then selling the house to pay off the secured loan is the only thing you can do.

Im not certain, but I cant see anything but small savings ( ie dont buy clothes for a bit, etc) and this is the problem with secured lending it is that of last resort

fermi

As other people have said, please get in contact with CAB, CCCS, Payplan or National Debtline to discuss your options.

Note: In bankruptcy, if the house is repossessed or you voluntarily surrender or the property is sold by the OR, then the shortfall in the secured loans is converted into an unsecured one that is then included in the bankruptcy. BUT, you must take professional advice. There may be other solutions. Links to the free/charitable advice organisations are in my signature.