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Can I protect home equity while having unsecured debts?
Ive been trying to get clear advice from a few places but it has been conflicting.
My income has recently dropped by £1000+ pm and is now made up of benefits alone.
I have a mortgage 3.75% remaining term: just under 7yrs. Currently £170k equity
No secured debts
No arrears on priority debts
Unsecured debts of £34k
After paying Dd and monthly costs have about £80 left.
If I enter into an IVA can the debts come after my house when its finished?
Or is that the risk with DMA?
I dont have any chance of remortgaging on my income, and would definitely increase my rate if I did.
Due to mental and physical health my income won't increase.
Is there any way this is possible?
Comments
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We may need a little more information but…
You need to stop paying your consumer/unsecured debt now. Very little will happen, other than pre-programmed calls, texts, email and letters. Everything important will be via snail mail.
When your current deal ends, you can renew your mortgage with your current provider without a credit check.
The additional issue may be how you fund the mortgage given you can only claim MIA, once you become eligible.
You may also be or become a candidate for write offs, in time.
If you've have not made a mistake, you've made nothing0 -
Thanks for the response.
My mortgage is fixed for the remainder of the debt. Its got just under 7 years, then it will be repaid. Im nearly 60.
CAB said I have to sell my house to pay off the debts, which frightened me to death. I wouldn't be able to buy another. I'd be in a yet more unstable position.
My son has set up a SO, taken on paying the mortgage.
Even with that help, im left with £80 after dd bills and essential living costs.
0 -
Please complain about CAB. You got a rogue adviser if that is what they said. At the very least that needs investigating, but probably more.
Having said that that was completely incorrect, let's move on.
As long as the mortgage is paid, your house is safe. Priority bills like council tax up to date? Good. Can you afford to pay utility bills and buy food? All these things are higher priority than unsecured debts.
Give us a soa if you want more detail
https://lemonfool.co.uk/financecalculators/soa.php
An iVA may not be the answer but no they can't 'come after the house after the iva is finished'
1 -
Thanks. Can you explain what MIA means please?
0 -
I think MIA may have been a typo for SMI, see
An IVA when you have a lot of equity in your house and little spare income may be hard to get accepted.im left with £80 after dd bills and essential living costs
is that £80 after you pay the debts? If it is, can you say how much the debt minimum payments add up to? And are any of them loans that will end soon?
If you only have £80 with your son paying the mortgage and you paying nothing to your debts, that is totally unsustainable.
An SOA as @fatbelly suggested would let us be more helpful.0 -
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1[b]Monthly Income Details[/b]
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 1145.62
Other income............................ 150[b]
Total monthly income.................... 1295.62[/b][b]Monthly Expense Details[/b]
Mortgage................................ 415
Secured/HP loan repayments.............. 123
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 19
Electricity............................. 75
Gas..................................... 75
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 0
Mobile phone............................ 4.5
TV Licence.............................. 15
Satellite/Cable TV...................... 10
Internet Services....................... 18
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 60
Road tax................................ 3
Car Insurance........................... 43.63
Car maintenance (including MOT)......... 60
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 10
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 47
Other insurance......................... 16
Presents (birthday, christmas etc)...... 20
Haircuts................................ 25
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 1617.13[/b]
[b]Assets[/b]
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0[b]
Total Assets............................ 211500[/b]
[b]Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 30000....(415)......3.75
Hire Purchase (HP) debt ...... 3338.55..(123)......14[b]
Total secured & HP debts...... 33338.55..-.........- [/b][b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
novuna loan....................35000.....213.5.....11.9
creation.......................435.83....55.5......0
barclaycard....................2747.57...60........29[b]
Total unsecured debts..........38183.4...329.......- [/b][b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,295.62
Expenses (including HP & secured debts). 1,617.13
Available for debt repayments........... -321.51
Monthly UNsecured debt repayments....... 329[b]
Amount short for making debt repayments. -650.51[/b][b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 211,500
Total HP & Secured debt................. -33,338.55
Total Unsecured debt.................... -38,183.4[b]
Net Assets.............................. 139,978.05[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]- Ive seen some other posts regarding unaffordability (?). When I took out the novuna loan it was for work on my roof. The salesman told me to tick the box : 'retired', because I wouldn't be successful if I said I was unemployed. He knew my income was made of benefits.
- I also have a DD to ERS for £1 per month. I'm not sure what this relates to. Its about 18yrs old. I have never queried it because I didn't want to 'poke the bear'. This month it increased to £2 for the 1st time.
When I went to CAB they produced a budget sheet that included a debt of £5000 with creation.To my knowledge i only have 1 debt with creation for £436. No other debts listed on their app? When I queried it, she said it was on my file so had to be included? I dont have any paperwork or contact from creation for this debt.
I have spoken to payplan regarding an IVA. Im wondering if contesting the affordability of the 30k novuna debt would be a better option?
0 -
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1[b]Monthly Income Details[/b]
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 1145.62
Other income............................ 150[b]
Total monthly income.................... 1295.62[/b][b]Monthly Expense Details[/b]
Mortgage................................ 415
Secured/HP loan repayments.............. 123
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 19
Electricity............................. 75
Gas..................................... 75
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 0
Mobile phone............................ 4.5
TV Licence.............................. 15
Satellite/Cable TV...................... 10
Internet Services....................... 18
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 60
Road tax................................ 3
Car Insurance........................... 43.63
Car maintenance (including MOT)......... 60
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 10
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 47
Other insurance......................... 16
Presents (birthday, christmas etc)...... 20
Haircuts................................ 25
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 1617.13[/b]
[b]Assets[/b]
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0[b]
Total Assets............................ 211500[/b]
[b]Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 30000....(415)......3.75
Hire Purchase (HP) debt ...... 3338.55..(123)......14[b]
Total secured & HP debts...... 33338.55..-.........- [/b][b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
novuna loan....................35000.....213.5.....11.9
creation.......................435.83....55.5......0
barclaycard....................2747.57...60........29[b]
Total unsecured debts..........38183.4...329.......- [/b][b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,295.62
Expenses (including HP & secured debts). 1,617.13
Available for debt repayments........... -321.51
Monthly UNsecured debt repayments....... 329[b]
Amount short for making debt repayments. -650.51[/b][b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 211,500
Total HP & Secured debt................. -33,338.55
Total Unsecured debt.................... -38,183.4[b]
Net Assets.............................. 139,978.05[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]0 -
Who is the other adult living in the house, your partner or your son? If it is your partner, how old are they? are they working? Do they have any debts not on your SOA?
Can you give a breakdown of the benefits you are getting? Does this include SMI (support for mortgage interest)?
I assume you are getting Council tax support and that number is not included in the benefits line as it just refuces the council tax pay able.
Winning an affordability claim against Novuna will only remove the interest on it. This is a large loan, when was it taken out?
The HP - is that car finance? is it HP where you own the car at the end or PCP where there is a large balloon payment to pay.0 -
Forget the idea of an IVA. You have no money with which to fund one. On those figures you are £321 short of a balanced budget. Is there £321 in there? I'm not sure. You could, maybe should, quit the emergency fund and terminate the HP, stop the life insurance and replace the car with say £100 public transport. That would save
100
123
47
86
Total 356
But that would be a radical change. Is there any way you can think of increasing your income? Are either of you on PIP? Could you claim?
0 -
Thanks for taking the time to reply.
My daughter lives with me. She has recently finished college and started an apprenticeship (less than min wage so her contribution to bills is the £150 per month listed in income).
My son lives overseas. He has set up a SO to make the mortgage payments.
No joint debts. Mortgage is in my name only.
Benefits are ESA, UC and PIP - standard living only (my mobility was removed at last review).
Mortgage is repayment. I havent claimed SMI because interest is only a small part of the monthly payment and it seemed counterintuitive to take on another debt to repay. I already have 2 debts to dwp caused by their admin procedures, not communicating : esa and uc.
Thanks for clarifying about the affordability aspect.
@fatbelly the mortgage payment is included in the SOA for clarity, but that amount isn't being paid from my income.
I have spoken to an agency re a possible IVA. It seems it might be possible but im worried I might not fully aware of the implications of this route.
0
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