Help to Decide

ManyWays

How much equity is there in the house? That is the value of your share less the mortgage and the secured loan

How old are your children sharing a room and are they the same sex?

How long ago was this horrible secured loan taken out? Have either of you borrowed more since that, if you have which are the new borrowings?

You may have a potential case against Tandem for that loan being unaffordable.

Stepchange have their own IPs, so there may be some reason why they did not suggest an IVA. Either Admiral or Barclays would be veto your IVA. Novuna could be able to veto your partners. I have no idea if any of those three is likely to that.

Chunkydog1305

https://forums.moneysavingexpert.com/discussion/comment/82088652#Comment_82088652

yes it is a van on hire purchase which he needs to work

Chunkydog1305

https://forums.moneysavingexpert.com/discussion/comment/82088665#Comment_82088665

Thanks for the advice, it is a van on HP which he does require for work. Our share on the property is a 70/30 split. Our house is worth around £165,000 so roughly we have around £10,000 equity. I think if we do an IVA the plan would then be to remortgage and pay off the secured loan and just take more out on a standard mortgage and overpay on that.

ManyWays

How old are your children sharing a room and are they the same sex?

I think if we do an IVA the plan would then be to remortgage and pay off the secured loan and just take more out on a standard mortgage and overpay on that.

In an IVA, you can not remortgage until the IVA has finished and cleared from your credit records, so 6 years plus about 6 months (that is assuming there are no need for payments breaks in the mortgage, which just get added onto the end and so delay a future remortgage.)

Even then, unless the property value has gone up a lot, a standard mortgage lender will be VERY unlikely to want to remortgage unless there will be significant equity left afterwards. Not 10k

If you want to go the IVA or DMP route, I think you should make an affordability complaint now against Tandem. This is not one of the affordability complaints normally discussed here as it is a secured loan, but there are regulator rules that mortgages should also be affordable and it is hard to see how this one was.

Win this the the interest is removed from the Tandem loan and you only have to repay what you borrowed.

However, you may have a much better option. Is there anyone in either of your families that could act as guarantor for a private tenancy?

Your house is too small. Your have no significant equity to protect It is going to take a very long while and be very stressful to go down the IVA route.

Finding a property a suitable size to rent, handing back the keys and going bankrupt may well be the best options for your family.

You would have to make monthly payments for a maximum of 3 years in bankruptcy. These are totally flexible, if your rent and bills go up more than your incomes, the payments are reduced. Bankruptcy cannot fail, an IVA can.

When the 3 years of bankruptcy payments end, you can start saving a deposit again and slowly rebuilding your credit score. You can get a new mortgage after bankruptcy and the debts in it have left your credit report.

Bankruptcy is not worse for your credit record or chance of a future mortgage than an IVA. And as the monthly paymenta are over sooner, you can start to save and rebuild your finances earlier than in an IVA.

Chunkydog1305

https://forums.moneysavingexpert.com/discussion/comment/82089105#Comment_82089105

thank you it’s so difficult to know what the right decision is for us really appreciate the advice. Luckily I have 2 boys 17 and 13 and they mange as the one uses our bedroom for space but it’s just mum guilt that steps in that I’d like to give them their own space and privacy

ManyWays

will the oldest be going to university?

RAS

On the mum guilt, life is so different now. Of my generation most didn't sleep in our own room until our sibling(s) left home or we married ourselves. A few of us escaped to university but had to deal with the added resentment when we returned for holidays.

But the funding issues regarding university are so different now. Sorry to add to the list of issues to explore, but you need to work out how either of your sons would fund university. Student finance is likely to expect a substantial parental contribution. I suspect bankruptcy would be more flexible, maybe @minkym00 might have some information?

This will be lower if they live at home. Oddly, the other universities that have lower living costs are well endowed colleges at places like Oxbridge.