Could I lose my home.

Mum2Boys_2

Hello everyone and thanks in advance for any help.
I am currently working with stepchange in regards to my debt, but it is in the early stages, I’ve completed their SOA and now I need to call them, hopefully they will be working tomorrow if not I’ll do it Monday. 

My situation is this, I brought a home with my partner 9 years ago, he left 5 and I took over the mortgage, the reason being is my mortgage is half the price of rent and there is a good chunk of equity. the house needed repairs like roof beams and windows and the only way I could afford this was to get a second charge mortgage. I have never missed a payment on either my second charge mortgage or my mortgage and I can continue to make these repayments, my property is valued at £196k by the bank (£210-220k by estate agents), I owe £140k on both my mortgages so I still have a decent amount of equity. 

I have other debts that had amounted and these are around £17k lots of little things like credit cards, store cards and overdrafts plus a loan which I used for a car (not the flashy type) 
I am now struggling to keep up my payments to these debtors and was advised to seek a IVA or DMP which I am happy to do. 

I am so worried they will force the sale of my home though, my house is a good size but. It luxurious in any aspect and I would struggle to purchase another one as well as clear all the debt. I have accepted that when my children leave (9,12 and 13) I will likely sell and downsize anyway. 

The stress of this has made me very ill both mentally and physically and I’ve had to spend time in hospital for care due to this. They are keen to sign me off work but I am currently refusing as it will make things worse and I will have nothing else to think about. 

Any help or advice would be gratefully received! 

Thank you, stay safe. 

cattie

Though I don't know anything about debts & IVA's I didn't want to read & run. It is extremely unlikely you're going to lose your home due to the debts, you have young children & it will always be a consideration to keep a secure roof over the heads of children. Someone with more knowledge is bound to come along soon & confirm that your home is safe.

I empathise with you being left to bring up 3 children alone, I was left with 1 & found life a bit of a struggle at times. If you feel strong enough to carry on with your job then yes I agree it will help keep your mind occupied & also help financially & avoid getting into arrears with the mortgage.

Just as an aside, does your partner pay anything towards his children's upkeep?

Keep strong & with luck 2021 will be a better year for you, I do hope so. x

Mum2Boys_2

Hello Cattie 
Thanks for your support. 

I am in receipt of £200 a month child support for all 3 boys so it’s helpful but as you can imagine does not stretch far....  I have however not received this support since Feb last year due to Covid. This has affected me leaning more on my debtors and making my situation worse last year, august time was when I realised just what a pickle I had gotten myself into. 

fatbelly

Let's be clear - there is zero chance of you losing your home to non-priority unsecured debts in a debt management plan.

An IVA is bankruptcy for someone with an asset to protect, like a house with equity. It's a 'formal' solution. It's a possibility in your situation as it sounds like you intend to stay where you are for maybe nine years and, for a homeowner, IVAs usually last six (the sixth year is instead of releasing equity at the end of year 5).

You say you have 17.5k of debt. How much per month could you realistically pay to a plan, be it IVA or dmp?

Mum2Boys_2

I have worked out that I could pay between £120-£150 per month  in the first year, once my car is paid (feb 2022) I will be able to pay an additional £150 per month. 

HampshireH

Mum2Boys_2 said:

Hello Cattie 
Thanks for your support. 

I am in receipt of £200 a month child support for all 3 boys so it’s helpful but as you can imagine does not stretch far....  I have however not received this support since Feb last year due to Covid. This has affected me leaning more on my debtors and making my situation worse last year, august time was when I realised just what a pickle I had gotten myself into. 

Their dad has a responsibility to pay towards their needs. Are they out of work and claiming no benefits?

Something is better than nothing. I would be pushing for this money as currently the lack of it is affecting your children indirectly.

Mum2Boys_2

Hello Hampshire, 
I have gone through CSA and according to them he is technically overpaying by £23 a week, he is self employed and I am
guessing he does not claim all his work as he was always telling me he was too busy to have the boys extra days. 

I have not challenged this as to be honest £50 is better then £27 and I can’t risk putting his nose out of joint. 

He did purchase the boys new clothes for Christmas and some new school shoes which is helpful. 

He is not fussed if we lose the house and has made this clear as he knows I’ll have money to rent.

HampshireH

Mum2Boys_2 said:

Hello Hampshire, 
I have gone through CSA and according to them he is technically overpaying by £23 a week, he is self employed and I am
guessing he does not claim all his work as he was always telling me he was too busy to have the boys extra days. 

I have not challenged this as to be honest £50 is better then £27 and I can’t risk putting his nose out of joint. 

He did purchase the boys new clothes for Christmas and some new school shoes which is helpful. 

He is not fussed if we lose the house and has made this clear as he knows I’ll have money to rent.

Sorry I posted as you said you hadn't received anything since last feb. But you should be receiving it.

How selfish of him re the house. A rental isn't anywhere near like the secure roof you currently have.

Mum2Boys_2

Ah no I haven’t received child support since last feb as he has been furloughed, his job means he can not work during Covid. 

fatbelly

Mum2Boys_2 said:

I have worked out that I could pay between £120-£150 per month  in the first year, once my car is paid (feb 2022) I will be able to pay an additional £150 per month. 

There will be people who recommend an IVA on those figures. Remember the fees for whoever arranges it, are substantial. 
You would probably end up paying the whole 17k though.

I think you should start a debt management plan at £150 (poss £120) per month and when you get more surplus income, save it into a separate pot to try full & final settlement.

It's probably going to end up cheaper and you avoid insolvency .

The people who do dmps without a fee are Payplan and Stepchange. A lot of people on here go the do-it-yourself route

Mum2Boys_2

Thank you fat belly, I am calling stepchange on Monday, I’ve already spoken to them via we chat and done my budget so I’m hopeful they will be able to help me! I don’t mind paying the full amount of debt, if it can be carried over a longer period then that’s fine, I just can’t keep up with the minimum payments they are offering me at the moment. 

Thank you everyone for your help and advice.