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Litigation Loan Interest charges
Hi there
I have recently been divorced (Decree Absolute signed off Dec 18) however, during my very acrimonious divorce proceedings which lasted over 2 years, and got to a final hearing at court, I was signed into a Litigation Loan company agreement..
At the time of my vunerable and emotional state of basically trying to survive the bullying, threats, constant bombardment of solicitors letters, emails costing my solicitors bills to increase, also child residency court request from my ex husband etc etc... I did not look at the interest rate that obviously is at a rate of 18% ...
So, the agreement I have with this litigation loan company is that the balance outstanding will be paid in full from the proceeds once sale of the matrimonial home..
Back in August 2018 when the court hearing had ended and a court order had been made by the judge which includes this agreement of litigation loan balance to be paid back, I contacted them to request that the interest could be frozen until the house is sold (bearing in mind the house went straight onto the market Aug 2018 and has been since)..
Loan company declined my suggestion, even when I offered to make affordable repayments to the capital, again the loan company advised me that unless I can make the interest payments then my case would not be considered...
Please be advised that the monthly interest charges (as at Aug 2018) £1,000pcm, have now increased to (as at Feb 2019) £1,400pcm, basically £45.67 per day interest charge!!
I have written to them again this week to request my offer of affordable repayments and to freeze the interest charges, as this is eating into mine and my sons end pot every month!
I unfortunately do not have rich parents or family to help me repay this full amount which is currently sitting at £109,000...
I only work part time and I have already looked into applying for a personal loan in which I have great credit rating, however, it has to be a secured loan which will be secured against the house, and my ex husband will need to approve this, but he will not consent to do this.
We have viewings but sadly no offers on the house... so I am stressing not sleeping and just want to try and find another way or options there could be to assist with this extortionate rate of interest, that is eating up from my end pot... I am so disgusted and will be contacting the Financial Obudsman to see if they have any advice for me as it doesn't cost me anything.
I am exhausting my options, so thought I could write on this forum to see if anyone else has other ideas or Martin Lewis could help and see if he is familiar with this kind of sticky situation that I am in....
FionaE
I have recently been divorced (Decree Absolute signed off Dec 18) however, during my very acrimonious divorce proceedings which lasted over 2 years, and got to a final hearing at court, I was signed into a Litigation Loan company agreement..
At the time of my vunerable and emotional state of basically trying to survive the bullying, threats, constant bombardment of solicitors letters, emails costing my solicitors bills to increase, also child residency court request from my ex husband etc etc... I did not look at the interest rate that obviously is at a rate of 18% ...
So, the agreement I have with this litigation loan company is that the balance outstanding will be paid in full from the proceeds once sale of the matrimonial home..
Back in August 2018 when the court hearing had ended and a court order had been made by the judge which includes this agreement of litigation loan balance to be paid back, I contacted them to request that the interest could be frozen until the house is sold (bearing in mind the house went straight onto the market Aug 2018 and has been since)..
Loan company declined my suggestion, even when I offered to make affordable repayments to the capital, again the loan company advised me that unless I can make the interest payments then my case would not be considered...
Please be advised that the monthly interest charges (as at Aug 2018) £1,000pcm, have now increased to (as at Feb 2019) £1,400pcm, basically £45.67 per day interest charge!!
I have written to them again this week to request my offer of affordable repayments and to freeze the interest charges, as this is eating into mine and my sons end pot every month!
I unfortunately do not have rich parents or family to help me repay this full amount which is currently sitting at £109,000...
I only work part time and I have already looked into applying for a personal loan in which I have great credit rating, however, it has to be a secured loan which will be secured against the house, and my ex husband will need to approve this, but he will not consent to do this.
We have viewings but sadly no offers on the house... so I am stressing not sleeping and just want to try and find another way or options there could be to assist with this extortionate rate of interest, that is eating up from my end pot... I am so disgusted and will be contacting the Financial Obudsman to see if they have any advice for me as it doesn't cost me anything.
I am exhausting my options, so thought I could write on this forum to see if anyone else has other ideas or Martin Lewis could help and see if he is familiar with this kind of sticky situation that I am in....
FionaE
0
Comments
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If selling the house will release the funds to pay off the loan, then you need to price the house correctly to sell.
Do some research into what is a more realistic price.
The loan rate isn't extortionate - it's high, but it's priced for risk.0 -
Hi there
Thanks for replying, we have reduced the house price twice now to fall in line with the 2% reduction...
Have open house this Saturday, the problem I have is that 1) Brexit.. 2) the price bracket we are selling at £865,000 it was originally on for £900K.
Regarding the interest amount being charged, I had an idea of applying for a personal loan say £50,000 and making affordable repayments which I have worked out I can afford max say £500pcm, and this would then half the interest amount being charge per month... what do you think?0 -
You also mention, searching a realistic price, this is not that straight forward when I am residing with my son (7yrs old) whilst my ex husband isn't...
He has already advised me that he would not drop lower than £850,000 whereas I may need to... how do you get around that?
Or take him back to court in which I will not be able to afford as this has gotten me into this financial loan in the first place...0 -
You won't get a personal loan of 50k on top of an existing loan of 100k unless you're earning silly money - the lender has to consider you having to repay both loans as they have no guarantee you will use loan 2 against loan 1 and base affordability on that combined total
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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A 50k loan is a huge ask, on a part time income and with the level of existing debt you have.
You're going to need to consider the house price - and that may need a discussion with your ex. Otherwise, the loan will continue to rise.
Are you sure you are not able to make any repayments towards the loan now?0 -
Hi Fiona.
Who advised you to go for a Litigation Loan? There's a lot of firms who offer a contingency fee (no win, no fee), and Litigation Loans aren't always the best way to fund legal help and I'd be very concerned if your solicitor advised you to go down this route.
It may be worth going to see your local CAB to see if they can negotiate a freeze in interest with the loan company on your behalf. Loan companies won't always negotiate with the person taking out the loan, but the CAB have a bit more power. I'm not saying this will help, but it's worth a try.0 -
Hey
Heres the thing I am not currently repaying this £100K loan, not sure if you're aware of how Litigation Loans work, nothing is taken out of your monthly income, the agreement in place is against the sale of the marital home...
Hence why I can repay an affordable amount per month until my house is sold,,, the issue I am querying is the £1400 interest being added onto my current £100K Loan...0 -
Hey there
Again, I have contacted the litigation loan company offering to start making repayments towards the capital of the loan, like you just said on a part time income, I don't have that spare cash to repay £1400 per month which is what the litigation loan company have come back and said I need to do, apparently in the terms and conditions it states that any monies repaid before sale of my house, will automatically go onto the interest first ....0 -
Yes, and by the time you've sold your house it's possible that you might just manage to clear the loan and the interest, and be left with nothing.
Who advised you to go down this route?0 -
Yep that's what I am pushing for this house sale, unfortunately, the Judge just assumes the best she can at the time of the final court hearing that the property will sell at that price and no more is said after that, in a nutshell!
My brief...0
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