Debt advice regarding iva's/bankruptcy

Robflh

Sorry Toon_Dave Sorry fermi

Toon_Dave wrote: »

We split due to her lying and deceit with hiding debts etc.

Toon_Dave wrote: »

A new debt has come to light which is an unsecured loan which the company have got a charging order against the property, this debt is £35,000.

When I read the above, I assumed that the Northern Rock loan was one she had taken out and that Dave knew nothing about it.

This loan was an unsecured loan but because of the Charging Order, it has now become a secured loan. www.fool.co.uk/Get-Out-Of-Debt/guides/Charging-Orders.aspx.

That means there are three debts secured against the house but not enough equity in the house to cover all three. That poses a few more questions.

Which of the two loans has priority?
If Dave sold the house. What happens to the remaining amount of secured debt?
Does the NR loan revert to an unsecured loan if there is not enough equity in the house to cover the loan?
Even with the charging order, can the NR loan be included in an IVA?

The idea in my head, is to get an IVA, which could cover half of the unsecured debts. Then sell the house and buy another property closer to friends and family. That might have to be done the other way round (sell house, buy house then an IVA)

With any luck, in a few years time, the value of the new property will have gone up and this would effectively cover the debt that has been paid with the IVA. In five years time, Dave would still have a property that will continue to increase in value and excluding the new mortgage, he would have no debts.

To put it in another way, if the current house is sold and in a few years time Dave buys another property, he will pay £10,000, £20,000 or even £30,000 more then he will if he buys the same property today. That would be far more then the amount of money Dave will pay back with an IVA. Well, that makes sense to me, if nobody else.

The spanner in the works so to speak, could be the NR Loan.

Toon_Dave

hi all..

An update on my current situation.

Today has been extremley productive. i have had conversations with both the CCCS and an independent IP (recommended by the CAB), each for over an hour.

Firstly i spoke to the CCCS, nice guys called keith. went through my online SOA to check everything was correct. some minor adjustments later it was sorted. Basically my outgoings are way over my incomings and therefore i would not qualify for an iva as i do not have and surplus income i could use. So he recommended bankruptcy as the only option and explained what i needed to do to get funds etc to do this. more on this later.

Then i spoke to a lady called Gillian from grant thornton IP. She was extremly nice and so non judgemental about anything. Again went through all finances and compiled a SOA from scratch. Again this showed that even on bare minimum expenses that i am able to put in i was still well under being able to apply for an IVA. i needed to have over £400 free disposable income to apply for an IVA (or some figure near that). where as i only was left with £60 dsurplus income which is not sufficient. So again Bankruptcy was the final decision for them too.

Therefore i have made a final decision....i am going for BANKRUPTCY. I have also decided to give my house back to he mortgage comapny as this would then clear both mortgage and secured loan (83,000) in total. then the other non secured debts would be included in the BR order.

I have been advised off both companies to stop paying all payments immeadiately to save funds for bankruptcy fee and house rental. This i have already done - i have gone to bank and cancelled all existing DD's and SO's so that my next pay packet will be mine to do with as i wish (well rent).

i have also arranged to view a few properties for rent in my price bracket (400-450pm) over the next few days.

i have certainly not come to this decision lightly, as anyone who has helped over last few days will testify too on here and i now feel a lot more settled in my own mind who i am going to progress in future with life and happiness etc.

please feel free to comment or ask any aditional questions as needed.

Thanks again everyone (you know who you are) for advice and support.
I will put my bankruptcy pertition on here soon so can see where i am at with all allowable expenditure.

Dave (phew - that was a post and a half )

RAS

Hi Dave

You have been through a hell of a journey in the last few days. Congratulations on all the hard work and best wishes for the future. I hope you know where to come for help and support over the next few months??

take a break and enjoy Easter?

fermi

I'm glad you've managed to come to a decision with all the professional advice behind you. And the important thing is that you seem happy (if that's the right word) with it.

Not a lot else to say/ask, as you've covered everything in detail there.

There will be plenty of support here and on the other boards to help you as you move forwards. It can still be a bit of a roller-coaster, but this place helps a lot.

Toon_Dave

RAS wrote: »

Hi Dave

You have been through a hell of a journey in the last few days. Congratulations on all the hard work and best wishes for the future. I hope you know where to come for help and support over the next few months??

take a break and enjoy Easter?

Thanks Ras, it has been a bit of a week this week but much clearer now after all the great advice i've had.

i will certainly be hanging about for more advice and also to offer any other assistance to others in same boat as me.

i feel i owe alot to you all and any other folk coming here for same will be well looked after.

Dave.

Toon_Dave

hi Fermi...yep i am much happier, if thats the right thing for me to say. But i know now that i have looked at all options and the professional advice i have taken has been fantastic.

i know i will be stressing no doubt when the 'TIME' comes but now i just need to proceed with what i have accepted is the only way forward for me.

i will be posting my SOA on the bankruptcy board soon with all allowable expenditure for you lot to pick and assist me with....lol.

Thanks again.

Dave.

So_Sad_Angel

Hi Dave,

Thankyou for your posts. I am just begining my journey & spoke to CCCs yesterday & waiting for papers. I may do as you have done & speak to a second source (ie IP )before making decision.

OH is going BR & CCCs have discussed DMP but so many ifs & buts I feel that if one thing goes wrong I may as well do BR anyway. This I am considering but found your thread very useful.

Thanks Angelxx

Toon_Dave

Hi Angel,

im glad my ramblings etc have helped, i have really had some excellent advice on here from everyone. This week on here has helped resolve a hell of alot of the 'what if' from my mind.

Everyones situation is different and looked at individually. Have you posted your SOA yet with I&E?? If not i would recommend doing so somewhere so people can look and see through their own personel experiences how to help.

If you need any further help from me as i've only recently contacted people then please feel free to ask or private message me if im not around on any posts.

i will certainly still be looking for further advice as i progress and therfore will also offer any assistance as i can.

Good Luck with Everything.

Dave X

So_Sad_Angel

Thanks Dave,

Not done SOA on here yet...Its very complicated as lot of `what ifs` main one being ..if I go BR with OH then I lose my job & no salary so need new job & won`t know new income!!!.Also if can`t sell house then BR anyway. Even CCCS had to keep going over & over different senarios.

I have set about trying to make a sensible post on BR board with SOA & try & make it make sense.

Hope you will look over it when I post.

Cheers again Angelx

Robflh

Hi Toon_Dave

Overall, I think Bankruptcy would be the best solution. However, you may find it difficult to rent a property. In no time at all, you are going to be bankrupt and there are very few landlords that will rent a property to you.

You are going to need a new bank account and again that is going to be difficult but not impossible. Look on the Bankruptcy & Living With It forum. There you should find details of who will let you have an account and what kind of account. As I said before there are drawbacks to bankruptcy.

At the moment you do not have or need a car but if your job changed for some reason and you needed to get a car, you would not be able to get finance for it.

On the Bankruptcy & Living With It you should also be able to find out how much it will cost to file for bankruptcy, how long it takes and get a better idea of what is involved.

The Mortgage and the secured loan are covered by the house. That would have left the NR loan and the unsecured debts, a total of £51,400. If an IVA were to write off 50% of that debt, you would have £25,700 left to pay. That means you would have to make payments of £428.33 each month for 60 months and you do not have enough money to do that.

However, if you sold the house, paid off the Mortgage and the Secured loan, you would free up £460 for a new mortgage as well as the £535 you are currently paying on the secured loan. £535 would be more then you need to make the payments on the IVA.

If you get a chance to, could you ask your IP if that would be the case? I am not recommending that you do this. Mainly because you would pay back, best part of £26,000. The only way doing that would make any sense is if house prices, for the type of property you would buy, were to rise by more the £26,000 in the next few years and I do not think that is going to happen.

Anyhow, have a good Easter holiday and keep us informed of what is happening.