Debt management/negative equity & Bankcruptcy

angeldoll2

Well i'm at my wits end and don't know what to do with my situation.

Last February i finally pulled my head out of the sand and admitted we have a serious debt problem, i contacted Payplan who set us up a debt management plan for our unsecured debt over £160K as we don't have enough spare income to take out an IVA.

They advised us that as our mortgage and secured loan from First Plus would free up somewhere in the region of £1400 per month we should sell the house (value £175K) and would then have enough spare to satisfy our creditors for an IVA.

We put the house up for sale immediately and just sold it for £132K, best and only offer we could get after tons of viewings.

I've written to First Plus for a settlement figure but after reading horror stories on here about them i can see we are going to be short of the money needed as we took out the PPI cover (I've sent the first letter to try and claim that back but it takes time) by several thousand pounds more than i can raise even with help from my family.

My question is, if you can't pay back all the secured loan could we still complete on the house and owe the remainder to First Plus? I need to get going on the IVA as the debt management plan would take 67 years to pay off. Or will we have to go through bankcrupcy?

I have two children 14 & 16, after a year of depression trying to sell the house i now feel completely hopeless of ever sorting this situation out

rosemahairy

Try talking one on one with an adviser at citizens advice. some of them really know their stuff. i know my mum had a secured loan which some how spiraled from about an 8k loan to about 50k debt with all the charges interest ppis etc etc etc. she could no longer cope the payments were out of reach. she went to the citizens advice bureau the one in ulverston cumbria. and spoke to a liz Curry. she dealt with the initial consultations but the severity of the case got a free barrister to fight her corner in court and get rid of nat west the court were basically disgusted and the settled amount ended up at 5k payable at 50 a month. i think they could help you definitely go talk to them they have volunteers there who are ex solicitors accountants etc they know their stuff. also, if you are seeking help from CAB you can tell your creditors this in writing and on the phone it keeps them away theres some legal thing to do with it

RAS

I think you need to talk to some of the other debt charities asap, as this seems an unusual arrangment.

RAS

Here

http://www.moneysavingexpert.com/loans/debt-help-plan#help

angeldoll2

Thanks for your replies.
I wish i knew about the ppi insurance before as i don't think i'm going to have time to sort this out before we have to complete on the house even with the help of the Citizen's advice Bureau, but i guess its worth a try

silvercar

The basic rule is that you cannot sell your house unless the proceeds (+ any othe money you can throw at it) are sufficient to pay off all charges on the property. That would mean your mortgage + secured loan and I'm talking redemption figures not borrowed amounts, so it includes arrears, redemption charges etc.

In practice, particularly if the lender is persuaded that your only other option is repossession, they may well allow you to transfer some of the money owed to an unsecured loan.

angeldoll2

Thanks Silvercar, i will speak to the CAB but i'm pretty sure the lender's only other option would be repossession in which case they would be lucky to make £25K back, if they let me sell there is £78K left after the mortgage takes their first charge so it didn't make sense to me that repossession or bankcruptcy would be the only answers.

If i can get the mis-sold PPI credited before completion i would draw even but its a long shot and i can't rely on it.

Thanks again to everyone for their help, i was beginning to think that with £200K life insurance on my life my family would be better off if i wasn't here anymore but this has given me light at the end of the tunnel.

rosemahairy

im so glad to hear that i know money worries are bad but your life is worth so much more. Definately try CAB or one of the other charities people have mentioned they will have good knowledge of what you are going through and will be able to help rememember you are not alone and are not the first and most certaainly will not be the last to get in a pickle at the hands of these con merchants :-)

angeldoll2

rosemahairy wrote: »

im so glad to hear that i know money worries are bad but your life is worth so much more. Definately try CAB or one of the other charities people have mentioned they will have good knowledge of what you are going through and will be able to help rememember you are not alone and are not the first and most certaainly will not be the last to get in a pickle at the hands of these con merchants :-)

Thanks Rosemahairy )