In a big financial mess and I can't see the wood for the trees :(

lea

sourcrates said:

As you are technically a homeowner, no point in making things stressful for yourself, if you can`t service your existing debts, then your choice is between debt management and IVA.

The former (Debt management) is the most likely choice, as your income fluctuates, and it can be flexible according to your available budget, your not bound by any rules, and its just much simpler all round.

Decide whether to self manage, or use a debt charity, and put your plan into action.

Google "stepchange" and "debt management plan".

Thanks for this response.
I went onto stepchange and completed my details, budget, debt etc. The outcome was a DMP was not advised but an IVA was. I then went onto chat with an advisor and explained a bit more of the unusualities of my situation and they said a DMP would be good, so I'm a bit confused now!

TheAble

Put simply you have a meaningful financial interest in this property which you are not currently enjoying the benefit of, nor have done for some time. Were I you I would grasp the nettle and look to realise my share without further delay.

It's a potentially complex area though so you might wish to consider taking some professional legal advice.

lea

Also just want to add, one of the 'positive' things on my credit report is stated to be that I'm currently a home owner with active mortgage. If I pursue ending my ownership, and don't get a settlement that clears my debt, would it be better for me to stay as a home owner with ex?

Thank you

sourcrates

lea said:

sourcrates said:

As you are technically a homeowner, no point in making things stressful for yourself, if you can`t service your existing debts, then your choice is between debt management and IVA.

The former (Debt management) is the most likely choice, as your income fluctuates, and it can be flexible according to your available budget, your not bound by any rules, and its just much simpler all round.

Decide whether to self manage, or use a debt charity, and put your plan into action.

Google "stepchange" and "debt management plan".

Thanks for this response.
I went onto stepchange and completed my details, budget, debt etc. The outcome was a DMP was not advised but an IVA was. I then went onto chat with an advisor and explained a bit more of the unusualities of my situation and they said a DMP would be good, so I'm a bit confused now!

They would say that, as an IVA gives you legal protection, so any property will be safe from creditors.

It would be just as safe in a DMP, they are just giving you the official advice.

You can opt for an IVA, but you are bound by much more stringent rules, best to read up on both options, and satisfy yourself as to which route you would prefer.

RAS

lea said:

sourcrates said:

As you are technically a homeowner, no point in making things stressful for yourself, if you can`t service your existing debts, then your choice is between debt management and IVA.

The former (Debt management) is the most likely choice, as your income fluctuates, and it can be flexible according to your available budget, your not bound by any rules, and its just much simpler all round.

Decide whether to self manage, or use a debt charity, and put your plan into action.

Google "stepchange" and "debt management plan".

Thanks for this response.
I went onto stepchange and completed my details, budget, debt etc. The outcome was a DMP was not advised but an IVA was. I then went onto chat with an advisor and explained a bit more of the unusualities of my situation and they said a DMP would be good, so I'm a bit confused now!

Looking at this from your ex's situation, you need to explain to them that, once upon a time, your salary and financial record was they only way they could get the necessary mortgage, by having you as a joint mortgage. Now, with your salary and financial record, it is highly likely that those will adversely affect their ability to get a new mortgage at a good rate. They need to take financial advice from a broker now. And they'd be mad to stop having a lodger given the financial states both of you are in. It's like getting a tax-free salary break. 

If you were to do an IVA, that could seriously affect their ability to re-mortgage to a good deal and you'd be required to pay out half the equity in year 5 or extend the IVA.

IVA providers are there to make money from you, not to be your friend and saviour, which is why Stepchange tries to offer a less onerous deal. Some IVA providers include a requirement to take out an onerous multi-year secured loan if you can't pay out the equity, so you'd both absolutely need to avoid anyone but Stepchange unless you've got someone who can read, understand and explain the specific terms and conditions in detail.

Given your fluctuating income, I suspect you'd struggle to make an IVA work over the duration. A third of them fail anyway and the budgets are thin.

A DMP will also damage his ability to get a good deal on the mortgage, so you might want to discuss timing the DMP so that he can sever the financial association before you stop paying your consumer credit debts. But that means you struggling on for another 18 months.

I assume that you have no accounts with your current partner?

lea

RAS said:

lea said:

sourcrates said:

As you are technically a homeowner, no point in making things stressful for yourself, if you can`t service your existing debts, then your choice is between debt management and IVA.

The former (Debt management) is the most likely choice, as your income fluctuates, and it can be flexible according to your available budget, your not bound by any rules, and its just much simpler all round.

Decide whether to self manage, or use a debt charity, and put your plan into action.

Google "stepchange" and "debt management plan".

Thanks for this response.
I went onto stepchange and completed my details, budget, debt etc. The outcome was a DMP was not advised but an IVA was. I then went onto chat with an advisor and explained a bit more of the unusualities of my situation and they said a DMP would be good, so I'm a bit confused now!

Looking at this from your ex's situation, you need to explain to them that, once upon a time, your salary and financial record was they only way they could get the necessary mortgage, by having you as a joint mortgage. Now, with your salary and financial record, it is highly likely that those will adversely affect their ability to get a new mortgage at a good rate. They need to take financial advice from a broker now. And they'd be mad to stop having a lodger given the financial states both of you are in. It's like getting a tax-free salary break. 

If you were to do an IVA, that could seriously affect their ability to re-mortgage to a good deal and you'd be required to pay out half the equity in year 5 or extend the IVA.

IVA providers are there to make money from you, not to be your friend and saviour, which is why Stepchange tries to offer a less onerous deal. Some IVA providers include a requirement to take out an onerous multi-year secured loan if you can't pay out the equity, so you'd both absolutely need to avoid anyone but Stepchange unless you've got someone who can read, understand and explain the specific terms and conditions in detail.

Given your fluctuating income, I suspect you'd struggle to make an IVA work over the duration. A third of them fail anyway and the budgets are thin.

A DMP will also damage his ability to get a good deal on the mortgage, so you might want to discuss timing the DMP so that he can sever the financial association before you stop paying your consumer credit debts. But that means you struggling on for another 18 months.

I assume that you have no accounts with your current partner?

Thanks for your reply and info.

We have two dormant joint accounts that we used for bills when we were together - they are no longer used but we both bank with the same bank so both have access to them, if we wanted to use them. They are empty current accounts.

lea

sourcrates said:

lea said:

sourcrates said:

As you are technically a homeowner, no point in making things stressful for yourself, if you can`t service your existing debts, then your choice is between debt management and IVA.

The former (Debt management) is the most likely choice, as your income fluctuates, and it can be flexible according to your available budget, your not bound by any rules, and its just much simpler all round.

Decide whether to self manage, or use a debt charity, and put your plan into action.

Google "stepchange" and "debt management plan".

Thanks for this response.
I went onto stepchange and completed my details, budget, debt etc. The outcome was a DMP was not advised but an IVA was. I then went onto chat with an advisor and explained a bit more of the unusualities of my situation and they said a DMP would be good, so I'm a bit confused now!

They would say that, as an IVA gives you legal protection, so any property will be safe from creditors.

It would be just as safe in a DMP, they are just giving you the official advice.

You can opt for an IVA, but you are bound by much more stringent rules, best to read up on both options, and satisfy yourself as to which route you would prefer.

Am I right in thinking that with a DMP, you repay the whole debt amount but minus interest? Stepchange have said a DMP would take me 26 years, which would take me to my late 60s, which is a terrifying thought?

Thanks

Andyjflet

I think a good start is to close those linked bank accounts you have together, its all very disjointed and the best option for yourself is to get clear and start fighting your own battles. 

RAS

I assume those joint dormant accounts are with your ex? They don't help either of you. And have the potential to damage your ex's credit record if you have to use any debt solution. Suggest you agree to close them as soon as possible.

RAS

lea said:

sourcrates said:

lea said:

sourcrates said:

As you are technically a homeowner, no point in making things stressful for yourself, if you can`t service your existing debts, then your choice is between debt management and IVA.

The former (Debt management) is the most likely choice, as your income fluctuates, and it can be flexible according to your available budget, your not bound by any rules, and its just much simpler all round.

Decide whether to self manage, or use a debt charity, and put your plan into action.

Google "stepchange" and "debt management plan".

Thanks for this response.
I went onto stepchange and completed my details, budget, debt etc. The outcome was a DMP was not advised but an IVA was. I then went onto chat with an advisor and explained a bit more of the unusualities of my situation and they said a DMP would be good, so I'm a bit confused now!

They would say that, as an IVA gives you legal protection, so any property will be safe from creditors.

It would be just as safe in a DMP, they are just giving you the official advice.

You can opt for an IVA, but you are bound by much more stringent rules, best to read up on both options, and satisfy yourself as to which route you would prefer.

Am I right in thinking that with a DMP, you repay the whole debt amount but minus interest? Stepchange have said a DMP would take me 26 years, which would take me to my late 60s, which is a terrifying thought?

Thanks

That's the basic idea, but if you are only repaying a small sum each month, the debts will usually be sold on. The new  "owner" will have paid £1-20 for each £100 debt you owe. Some will make a very nice profit if you repay £20 for every £100 you owe. One company is likely to hold out for £75. 

This is difficult to organise if you are with a debt charity because if you have £20k debt and accrue £5k, they want to pay pro rata to each creditor. If you are in control, you might well pay off £7-12k of your debt, perhaps more, by negotiating individual full and final offers. I'm sure other MSErs could share their experiences.