£117,000 in debt.

purple_octopus

Hi Everyone,
I am considering Bankruptcy but would appreciate all other suggestions. After sinking into debt for the last 6 years because of personal problems, I had just begun to realise and deal with what I had done when I met my new partner, who, amazingly, is still with me after a year despite my £117,000 of debt.

The debt consists:-
£75,000 secured personal loan with First Plus (current repayment value £89,000)
£16,000 on 3 credit cards all at 0%
£10,000 on unsecured personal bank loan
£2,000 bank overdraft

My only asset is my house on which I owe a mortgage of £135,000 and it is worth about £195,000. In the last year I have done as many of the money saving tips that I can; cancelled unnecessary outgoings (personal insurances, satellite etc), changed gas, electricity and phone suppliers, cut back on food costs etc. In terms of my previous spending habits I am totally reformed, but I am still struggling to pay everything. I have never defaulted on any of these debts.

My partner pays half of the household costs, but does not contribute to my mortgage. He still has a mortgage with his ex, and he will eventually sell that house, but at the moment he cannot contemplate a joint mortgage with me, which is why we haven’t sold my house. He is really struggling to come to terms with my past.

Earlier in the year I contacted the CCCS saying I did not want to do bankruptcy and what were the other options. We went through a budget and they suggested a payment plan, but as it would be well over 10 years to pay it off, I did not go ahead. I also considered an IVA, but as First Plus own over 75% of the debt I did not think they would agree.

When I was single, I had resigned myself to a lifetime of debt repayment, but my partner does not deserve any of this. He has been careful with money all of his life, so why should he have to go through this prison sentence? We are desperate to get out of our situation. I am nearly 40 and we would love kids in the few years I have left, but how can we. Is bankruptcy the only solution? Please help.

Nicky_3

Bankruptcy is a solution, but of course it will mean loosing the equity in your property, but the same can be said for an IVA.

Bankrputcy is not your only solution however if you have a surplus income, you still have the options of a Debt Management Plan or an IVA. Its basically you deciding which route to take.

With an IVA, if your creds dont agree to the terms, then you still have either Bankruptcy or a Debt Management Plan.

If you are considering the option of an IVA, contact The Payplan Partnership https://www.payplan.com because they charge no upfront fees and if the IVA fails, you have lost no money. You could even just give them a bell to lay all your cards on the table and get some proper advice as to what your best option is. At the end of the day however, the decision is yours.

Good luck

Ember999

Hi Hon,

Just read your post and it brought a lump to my throat. Here's a hug :grouphug:

Firstly, good luck on your new relationship, sounds like you have found a nice partner who is prepared to stand by you no matter what. That makes you a lucky girl

There is an awful lot of debt and I am not qualified to offer help, but all the experts on MSE will be along to help you shortly. They are marvellous at sorting through the various options open to you.

It would be most helpful for you to post a 'Statement of Affairs' which entails detailing income and expenditure so that MSE members can find both ways of dealing with the debt and reducing expenditure. Try to find time to do this as it will be helpful.

Just wanted to wish you luck, hope it all works out. Don't lose hope, there will be an answer out there.

Ember xx :grouphug:

needmoney

Ember999 what a nice post and I just noticed your address, envy your cottage.

Good Luck purple octopus you will get loads of help here.:grouphug:

Ember999

needmoney wrote:

Ember999 what a nice post and I just noticed your address, envy your cottage.

Good Luck purple octopus you will get loads of help here.:grouphug:

Hi Needmoney,

Thanks for your post It took us a long time to find our dream which was a country cottage in Scotland (we are English) but we persevered (is that spelt right? LOL) saved hard and waited 18 years until we achieved it. But the proof is there, if you want something bad enough and try your best and above all else, NEVER GIVE UP, your dreams do come true

Whatever your dreams are, hope they come true,
Ember xx

purple_octopus

Thanks Nicky,
I do appreciate the advice and support. I will look into the payplan option carefully.

Thanks

purple_octopus

Hi Ember,
Thanks for your kind words. I will post a statement of affairs shortly

Purple Octopus

louise1234_2

Is the £75k loan secured on your house? As well as the mortgage of £135k??

I think your main issue is the £75k secured loan. I'm not sure if you can sell your house as you have more than the value of the house secured on it. Maybe someone can advised correctly?

What are you earning at the moment?
How much are your secured debts per month?
Could you post all your incomings and outgoings?

Your choices seem to be bankrupcty (which would lose yout house) or a debt mangament plan for your unsecured debts, which would take longer but allow you keep your house. As you have no equity in your house I don't think you can do an IVA??

purple_octopus

Hi Louise1234,
Yes the £75K loan is secured on the house. First Plus would allow me to transfer the loan to another property if I moved. I tried to get advice on remortgaging, but the advisers (John Charcol) said they couldn't offer me anything as I don't have any equity.
At one point we thought of radical options, like living on a houseboat, but as I could not transfer the secured loan to it, it wasn't a possibility. What I would like to know is if anyone knows if we would be allowed to sell the house at all if I didn't have another property on which to secure the loan i.e If I sold and then went into rented, would the sale be allowed or would the secured loan stay with the property and stop anyone else from buying it.

I will post more figures about income and expenditure shortly.

Xbigman

With the 75k loan secured on the house you have negative equity and stagnant (or falling) house prices. Bankruptcy is not a good option with negative equity on multiple secured debts as the second charge holder tends to panic and go for repossesion. You best bet is CCCS. If you can pay your living expences and priority debts with even a bit left over you can start paying the debts back.
You mention in one post that you have already turned down one payment plan because it would take too long. Unfortunately that is the only course immediately open to you with negative equity and its probably the best course.
Regards




X

meanmachine_2

The most positive part of your post purple is that you've recognised and changed your devisive spending habits. Congrats. That means your life from now on should be happier and healthier.

Because your habits are changed, I would suggest bankruptcy (for once!), but as others point out, neg equity leaves you with problems.

Ten years to pay back such a large debt doesn't sound too great a "sentence" to me. It takes 25years to pay off a mortgage remember!

Good luck.