Oh my God I'm in such a mess with my mortgage - please help

Married_Mum_of_2

Ok so before I just slit my wrists and have done with it - here's the situation we're in - hopefully someone can help.

We bought a house last April 2007 and put all our money into it. The rest of our money is in DH's business.

It was a HUGE mistake, our biggest to date! We were living next door to rowdy South Africans, we couldn't sleep at night and husband couldn't stand his journey to work, it was taking him hours and when you've got your own business, time is money.

So, we moved out of that house 4 months later - we didn't sell it, we put tenants in, and rented a little house next to DH's work. Finances have been a struggle ever since because the rent we earn from our house doesn't cover our mortgage.

Things have been very up and down with [EMAIL="DH@We"]DH's company. Sometimes, we don't get paid. So, we[/EMAIL] have slipped into arrears on our mortgage. Our tenants are now moving out in July and so we decided the best option was to just sell it and rent for the time being until we can make some money from the company (though when that will be is anyone's guess)

Well, the market is in a terrible state now. We bought the house for £400,000. The mortgage is currently £405,000 due to arrears and the house has been valued at about £380,000.

If we did manage to sell it at 380k, that would leave me with another £25,000 of debt to add to my other debts which are totalling £30,000 on their own at the moment. Plus there's no way I'd be able to pay the estate agent fee or solicitor fee.

But it could also sit on the market for months accruing more arrears.

And I can't earn at the moment - I'm 39 weeks pregnant and in sole charge of a 2 year old. We're on maximum benefits. This problem is too big for us now it's a MASSIVE mess.

Could replace the tenants and move somewhere much cheaper but it still means Northern Rock are pursuing a CCJ against us.

boyse7en

Sorry that you've got yourself in a bit of a hole. Always a worry when you've got kids

One option that you haven't mentioned is moving back into the original house, so that your not paying rent and covering the shortfall on it. Might be worth living next to rowdy neighbors (are they owner/occupiers or tenants?) for a while until your husband gets a more regular income and then try again.

Married_Mum_of_2

Thanks -

forgot to add to my first post that moving back into our original house is not an option because:

We wouldn't be able to pay travel costs to get DH to work
We hate the place
Daughter goes to a nursery here 2 hours a day, 3 days a week - we wouldn't be able to get her into somewhere near our old house for at least a year.
Husband might murder the rowdy neighbours!

Snooze

Sounds like you're toast and you're gonna have to go bankrupt, but not sure how that will affect your OHs company.

You'll get better huggy-huggy type advice if you post on the Debt-free Wannabe's forum on here.

Rob

whitewing

Hi,

You are on the right site, but I agree with snooze that you will get more practical help if you copy your original post and set up a new thread on DFW.

They will probably ask you to list all your income and outgoings (on a Statement of Affairs). You'll be amazed at some of the good advice you get.
You will also find that some ideas you won't even contemplate now make a lot more sense when you've been chatting to everyone.

There will be a solution to this. It may not be easy, but you are amongst friends here. Take care xxx

Got2change

Here's some huggy huggy type advice anyway - even if in the wrong place :rolleyes:
You ARE in a worrying situation hon but please no more thoughts of slashing wrists hm?

You could do worse than have a look at the Debt Free Wannabe forum and it's sub-forum Bankruptcy and Living With It - both will possibly give you much needed valuable advice and the chance to maybe read other people's stories and how they have coped.

Keep your chin up and take care of yourself and the little ones and here's a
((((HUG))))

macaque_2

Married Mum of 2

You have two choices:

1. Sell the house
2. Rent the house out

Doing either of the above may not solve all the issues but either will help enormously. If it was me, I would instruct an estate agent to put the house on the market for renting or selling (with a preference to sell). You should not have to pay the solicitor until you have a result (but make sure that you read the small print of the agent's contract).

I would also seek advice from the CAB. You should be able to do a deal with your creditors but you do need the right advice on this.

If the house does not sell or rent out, the worst that can happen is that you get made bancrupt. From what I know of people who have been made bancrupt, the process is a blessed relief. It is only the anticipation of bancrupcy that hurts.

Got2change

macaque wrote: »

If the house does not sell or rent out, the worst that can happen is that you get made bancrupt. From what I know of people who have been made bancrupt, the process is a blessed relief. It is only the anticipation of bancrupcy that hurts.

Sorry to be pedantic but the chances of being made bankrupt are slim to none; the option will be to declare bankruptcy, rather than be MADE to go bankrupt so there is an element of choice. But I do agree though that the best option is to get the house on the market or up for rental as soon as humanly possible - and it is possible for the house to be rented out whilst still being marketed for sale, so that could be worth considering maybe....?

mlz1413

I think you need to re-asses what is important and what you need to acheive rather than what you want to acheive.

Firstly most of the problem seems to be your husbands business, I know you have ploughed a lot into it but it sounds like time to go back to full employment and deal with your debts. Secondly if your 2 yo loses her nursey place then won't that save you money?

Then when you have the security of being able to live within your income that will be the time to discuss with OH when to try starting out on this business venture again.

Good luck.

Dithering_Dad

Sounds like a desperate situation, but there are solutions. If you haven't done it already, I'd look at putting your mortgage in Interest Only for a while. I'd then have a serious look at the revenue the business is bringing in and see if it's worthwhile. It sounds with the problems you have getting paid, etc. that perhaps you'd actually be better off with a normal 9-5 close to home.

If you can't rent out your home (and cover the mortgage payments with the rental) then I see no alternative but to move back. I can only speak for myself, but I'd certainly not let a bit of noise force me into bankruptcy. Start making complaints (http://www.direct.gov.uk/en/HomeAndCommunity/WhereYouLive/NoiseNuisanceAndLitter/DG_10029682)with the council.

I can't stress enough that if I had paid £400k for a house, I certainly wouldn't let anyone force me out of it. I'd also have to say that if I started a business (and I have, by the way), I wouldn't let my customers get away with not paying. You need to stop being such a victim and fight back against your crappy neighbours and your crappy customers. Taking the easy route of running from your neighbours and letting your customers take the mickey is just going to get you into the bankruptcy courts.

Stop being bullied and stand up for yourselves!

ruggedtoast

There comes a point where worry over the debt is worse than walking away from it. Sounds like you've reached that point to me.