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DMP?

ES19901990
ES19901990 Posts: 70 Forumite
10 Posts
edited 12 October at 1:43PM in Debt-free wannabe
Hi All

Sorry for the long post but I want to give as much detail as possible.

I have started my own business and unfortunately it looks like it will not make it. I have a start up unsecured personal loan with £24000 outstanding and a business loan with £12000 outstanding which is personally guaranteed. So currently £36000 total debt.

Should the business fail I will go back to my old job with an Income of around £2750 including benefits (UC, SMI) per month after tax.

Realistically need £2450 per month to support myself and family and cover essentials.

What are my options?

Is a DMP realistic, it may take longer than 10 years could they go 15 years?

Is an IVA possible? We do get SMI currently so not sure if this would work. My Equity in my half of my house is around £30000.

I really need to protect my family home and avoid bankruptcy at any cost.

Has anyone recovered from a mess like this?

Thanks all
«13

Comments

  • ES19901990
    ES19901990 Posts: 70 Forumite
    10 Posts
    Hi All

    How do charging orders work on jointly owned properties?

    I have unsecured debts of £36000 across 2 lenders. If they take out a charging order against my property that is jointly owned can they force me to sell. It is my family home with 2 children?

    I have £30k equity in it.


  • DullGreyGuy
    DullGreyGuy Posts: 14,055 Forumite
    10,000 Posts Second Anniversary Name Dropper
    edited 7 October at 3:36PM
    Are you joint tenants or tenants in common? If the later do you have a deed confirming the split?

    If your Joint Tenants the charging order effectively makes it a Tenants in Common with the equal share for all Tenants. It's fairly rare that orders of sale are given for unsecured debt of the debtors home. 
  • ES19901990
    ES19901990 Posts: 70 Forumite
    10 Posts
    edited 7 October at 3:36PM
    How do I know which we are? We both own 50%
  • ES19901990
    ES19901990 Posts: 70 Forumite
    10 Posts
    Is anyone able to advise on this?
  • sourcrates
    sourcrates Posts: 30,057 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    We don`t really deal with business debts on here, as the terms of such loans are different to consumer credit debt.

    But yes, a DMP is doable, an IVA requires a steady income for up to 6 possibly 7 years, so that might not be your best bet here, even though it provided you with legal protection from creditors.

    However as a general rule, affordability is key these days, so you would pay what you could afford and the lender would have to lump it, there would be a small chance of a charging order but 9/10 they just sit unactioned until the debt is repaid or the house is sold, an order for sale would be extremely rare, especially if you can argue against it.

    Forget anyone making you bankrupt, it would cost them more than what they might get back from you, and for such small debts is unlikely to be a course of action anyone will take.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • sourcrates
    sourcrates Posts: 30,057 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 7 October at 3:36PM
    It would only result in a restriction if the debt is in a sole name.

    Please try and stick to your original thread, it just avoids confusion.

    I will merge them for you.

    Thanks.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 21,609 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    So yes a debt management plan is one possibility

    An IVA is another.

    A charging order can only be obtained after a ccj, coming after a court claim coming after a preaction protocol letter

    If it is a solely owed debt secured on a jointly owned property then it gets recorded as a restriction not a full charge.

    Business debts are sometimes pursued more aggressively than personal debts. Which lenders are we talking about here?
  • ES19901990
    ES19901990 Posts: 70 Forumite
    10 Posts
    Thank you. The business loan is with HSBC. What is the difference between a restriction and a full charge? Could they still force a sale?
  • fatbelly
    fatbelly Posts: 21,609 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    edited 7 October at 9:50PM
    HSBC should be ok. Orders for Sale are near impossible

    Restrictions are the subject of the thread

    https://forums.moneysavingexpert.com/discussion/1839539/charging-order-the-myth#latest
  • ES19901990
    ES19901990 Posts: 70 Forumite
    10 Posts
    Hi All
    This is great, thank you for your help.
    Just on the subject of DMP's is it possible that they go longer than 10 years? Fo instance could I view as an extension to my mortgage and pay back over 20 years if needed or income reduces etc?

    Would I prioritise the smaller devts and clear them First?

    Is it possible you can make offers to clear the debt below value or is that only in an IVA? ( A couple of my family members have indicated they would help a bit?)

    Any help greatly appreciated, the worry is taking it's toll.
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