£29k of debt from house repossession

crescent25

Apologies for the long post... And please, no judgments or people telling me I should have declare bankruptcy years ago. I feel pretty devastated that I didn't without anyone else telling me This would all be behind me now if I had.

My house with an ex which I bought when I was stupidly young was repossessed. I've been told I should have declared bankruptcy at the time (as above) and that it'll all have been done and dusted now (but you know, I was young, severely depressed and received poor information and help at the time). It also wasn't until 2017 (5 years after the repo I think) that I received a letter through saying I owed £29k (it was a joint mortgage though). I naively thought that it had all just been cleared when everything on my credit file showed as closed. The mortgage account was closed and showed as 'settled' within around 12-18 months of the repossession.

I was studying in Australia when I got the letter through saying I owed £29k, otherwise, I probably would have just declared bankruptcy then. Then when I came back, I was applying for a role that required very high vetting and again, I put off the bankruptcy as it was possible I would be declined for the job.

Anyway, moving forward, I WAS trying to rebuild my credit in the hope that I can save some money (and maybe take out a small loan) to add the the £10k that my parents will gift me to offer as a full and final settlement for the debt. I have been advised that this is a silly idea and still, to just declare bankruptcy. But what if I do and it all backfires.

If I had enough money to offer a final settlement of £15k in 12-24 months (providing they would accept this - it is a joint debt so would they be more likely to accept this if they still know my ex could pay the rest?) this means that my credit file will have been rebuilt and in a few more years, I should be in a position to buy a house. I won't have to tell my employer or any future employers, I won't have to declare a bankruptcy if I ever settle down in a new relationship and I'll have cleared the debt off my own back.

I feel like if I declare bankruptcy (I have around £100 disposable income each month after paying all bills/living costs etc), I'll constantly have to explain in the future to employers, mortgage companies, new partners that I was once bankrupt. I also cannot understand whether if I had £100 disposable income, do I just pay this for 12 months or for 3 years under the bankruptcy? My credit file will also plument and I'll be back to square one and presumably, not be able to buy a house for at least 6 years until the bankruptcy drops off. Could I even rent somewhere else? I currently lodge with a friend.

If I have a fleet car through work that I pay £80 extra tax a month for (as I have to travel >7000 miles per year for work), would this be okay? Would it be taken off me or could I keep it with a bankruptcy? I need a car for work as my job is to visit clients and this is impossible on public transport due to rural locations.

I just cannot weigh up whether it would be stupid to save and accept money from my parents to offer £15k settlement, when I could just declare bankruptcy. But worried about the long term, negative effects that this would have. There is also no saying they'd accept the £15k. At the moment, I've been paying a £1 token payment for the last 12-18 months as I was a full time student.

sourcrates

Hi,


Ok, try and relax, deep breaths, you are both still liable, but they will willingly chase the one they can find for payment, are they currently chasing your ex as well ?

The debt has probebly been sold on, and to be honest, you can keep making token payments forever, if thats all your budget allows, most folk dont have 29k under the bed, you know this, they know this.

Bankrupcy is still an option, but all saleable assets would be recovered by the OR, you would potentially be allowed a car, but it would be something cheap and cheerful.
With Bankrupcy, you plan ahead, its all done online now, no need to appear in court anymore, you withdraw all your money in cash first, prior to going bankrupt, after bankrupcy, you open a new basic bank account, with a bankrupcy freindly bank, Nationwide springs to mind.


Any more than £20 disposable income will get you an IPA, for up to 3 years, this is at the OR`s discretion.

Saving for a full and final settlement is also an option to avoid the above senario.

crescent25

Thank you so much for your reply.

I am not sure if they are chasing my ex - he literally walked out and I haven't seen him since. I managed to find out after a bit of fishing on the internet that he's working as a manager for a company, so he too should have some money which would allow him to offer token payments a minimum. I would imagine if I can find out this information and a rough address/area of where he lives, the company who owns the debt should be able to find him. I was told I could contact the company and ask for a statement of payments received and the overall balance (to see if he's making payments), but I feel nervous about getting in touch with them.

So until I've managed to save up some more money (potentially moving back in with my parents for a while which could allow me to save £6000 in a year), building my credit rating and accepting the gift of money from my parents and possibly offering a full and final settlement, I can just still keep making a token payment and everything should be fine (as fine as having £29k debt looming over you can be!)?

Maybe it's not something I need to worry about as much as I am... But know that surely I cannot go on forever making £1 a month payments, especially if one day, I want to buy another house. Since making these payments though, I have not heard anything from the company, phew!

fatbelly

In 2017 (5 years after the repo) you received a letter through saying you owed £29k.

And you've been paying £1 per months since then.

Saving a 'fighting fund' is a good idea but if they are not being aggressive then I'd leave it as it is unless you are getting believable threats of action against you.

Last year I dealt with one case similar to yours where the lender had taken out a statutory demand (that's a forced bankruptcy) against a client of mine at CAB. Long story but we eventually settled at 5p in the pound, I think.

Mortgage shortfalls are a little different from other debts as they have a longer 'statute barred period' and usually involve people who are effectively insolvent. Hence the low settlement.

sourcrates

crescent25 wrote: »

Maybe it's not something I need to worry about as much as I am... But know that surely I cannot go on forever making £1 a month payments, especially if one day, I want to buy another house. Since making these payments though, I have not heard anything from the company, phew!

The absolute worst they could do to you is make you bankrupt, as you have no real assets, that would be a pointless excercise for them, as they would get nothing back at all, except a few quid from an IPA possibley, certainly no where near 29k.


So really, as funny as it may sound, there is no point in worrying about it, if you owed them 5k, they would most likley chase you all the more, as there would be a prospect of getting something back, with 29k, that prospect dosent really exist.

crescent25

Thanks once again for the replies. This really does put my mind at ease, as family and friends have said I am just burying my head in the sand.

In hindsight, do you think the longer I left it, the less money they would accept as a f&f settlement?

sourcrates

It can work out that way yes.