Hi John

there are a number of areas here. Could you let me know what you would see as a successful outcome.

If you go for bankruptcy, then the Trustee would have an interest in the property and may sell.

Could you let me know how much each of you owe.

Mark

Successful outcome would be to succeed on the mortgage to rent scheme. Obtaining social housing through here is near impossable hence we hope it would succeed. However as we cannot continue as we are, we appreciate we may lose the house.

If it fails we will go homeless with the local council.

Joint Mortgage 100k, value approx 110k. Although the house is in need of repairs which we cannot afford and may not sell at that price. Plus other homes in area are not selling.

Car HP ?ú189.99 Balance ?ú7,371.00
Central Heating ?ú107.52 Balance ?ú4,849(Fixed Sum loan agreement)
Credit Card ?ú80.00 Balance ?ú2,631.75 (Over Limit)
Comet Balance ?ú614.99 (HP)
DFS ?ú36.00 Balance ?ú1,228.00
TOTAL DEBT: ?ú16,695

Not included general living requirements such as fuel, council tax, insurances etc which add up to a significant amount. If you require us to arrange an appointment with yourself to discuss in depth that could be arranged.
Many thanks
John

Hi John,

Have you had much in the way of specialist advice about your situation thus far? I', just a little worried that you may be rushing into procedures such as sequestration that might not actually be necessary. Also, have you checked that your property will be eligible for the mortgage to rent scheme in terms of its value being within the prescribed limits?

You mention HP for a car - are you aware that you would lose the car if it is included in a sequestration/trust deed? Is this the intention or not?

Is the property jointly owned? Are any of the debts joint, or all in your name?

Sorry, lots of questions, but the answers may make a big difference as to the appropriateness or otherwise of the possible solutions for you. Really I think it'd certainly be worth your while going through your circumstances in more detail directly with a money adviser or one of the experts here.

quote:

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Originally posted by Kevin Mapstone

Hi John,

Have you had much in the way of specialist advice about your situation thus far? I', just a little worried that you may be rushing into procedures such as sequestration that might not actually be necessary. Also, have you checked that your property will be eligible for the mortgage to rent scheme in terms of its value being within the prescribed limits?

You mention HP for a car - are you aware that you would lose the car if it is included in a sequestration/trust deed? Is this the intention or not?

Is the property jointly owned? Are any of the debts joint, or all in your name?

Sorry, lots of questions, but the answers may make a big difference as to the appropriateness or otherwise of the possible solutions for you. Really I think it'd certainly be worth your while going through your circumstances in more detail directly with a money adviser or one of the experts here.

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We have seen a local authority money advisor and paid a visit to an IP. The IP we visited left us with more questions than answers. Our home is within the limits for the mortgage to rent scheme (MTR) and we have started to accrue arrears which opens the door to us entering the scheme. The IP we visited stated that we were not eligable for a TD due to the amount of credit we have and in order for the creditors to get a return on the outstanding debt the TD may last 4~5 years with both of us contributing ?ú200 per month each. Apparently we could keep the car and the "fixed loan agreement" above would get wiped out? He spoke about entering a DMP which is apperently new. We were okay with this, the house although discussed initially (IP stating they could run the MTR paperwork for us.)never got mentioned again. This is a stumbling block for us as we are tied until age 70 and retire at 65. I was asked to approach the mortgage company and request an interest only mortgage for a few years until we are better off? Have not got a clue how we will be better off unless we win the lotto. Anyway mortgage company stated they would make it interest only for 3 months max!

House is in joint names, car and credit card in my name, others in wifes name. We really were relying on MTR to work, if we kept the roof above our heads nothing else mattered, although I felt extending a TD over 3 years a bit much just to get a return for creditors and ?ú200 contribution from wife who works part time very high.

Yes, if the car agreement is a fixed-sum loan agreement then it is not HP and can therefore be included in a trust deed/sequestration without the finance company being able to repossess the vehicle (though your car is an asset instead so if it is high value you might find a trustee would seek to sell it).

A lot depends on how the house is dealt with and the value placed on the property. If you do go down the mortgage to rent route then there may be some funds available to come back to you, which you could then use to pay towards your debts. Also, presumably the rent payable would be less than your current mortgage payments, so you may find that you would be able to afford to pay off your remaining debts via a payment plan without the need to consider insolvency options for either of you.

Your wife's debt does seem to be too low to justify a trust deed as a solution, though it may be possible for you if desired, John. Again, whether this is desirable does depend upon whether funds are likely to come back to you as part of the mortgage to rent process, and what you might be able to afford as a contribution towards your debts. One advantage of entering into a trust deed would be that your mortgage to rent application can be started straightaway rather than having to wait until you are sufficiently in arrears.

Do you feel you can afford to pay anything towards your creditors at the moment?

Any funds available from the MTR may have to be used to fund repairs, only if these were above 6k in value.

Rent would likely be ?ú300~360 per month, so we could go with a DMP or Trust Deed for myself or both depending on contributions required by yourself.

Do you think I should discuss this with yourself face to face at this point?

Hello justjohn.

The experts on the site provide advice in this forum without touting or asking for business so your question is a little difficult for them to answer.

Each is contactable via a contact form on their profile pages if their advice on a possible trust deed would be valuable to you.

Sorry TDA and other experts.

My response was based on desperation and also was not fair on Mark who answered my initial question.

Has any expert successfully managed someone through the mortgage to rent scheme?

What happens if the council offer as an example in my case 100k which would cover the outstanding mortgage and the value of the house is deemed higher, would the IP fail the bid by the council?

I really appreciate everyone's input and thank you all for taking the time to reply.

Any property sold through the mortgage to rent scheme is professionally valued by a surveyor and the selling price is set at this market valuation. I believe there may be some subsidy paid to the social landlord (usually a housing association), but if they wish to take the property on then they don't get a say as to what the selling price is. Therefore there shouldn't be any problem from a trustee's perspective as full market value is being obtained (less the cost of any repairs).

Hi John

My advice would be to have the position with the property clarified first as this is a timing issue. If you enter any form of insolvency beforehand, then the house and any potential equity may be an asset and therefore endanger the MTR scheme. Have they given any timescale.

In the meantime, there is nothing to stop you sitting down face to face and looking at all the options to see which best suits your circumstances. It may be that the exclusion of the debt payments under a formal option, may alleviate the financial strain. (Sorry, that last sentence reads like something from a financial brochure!)

Mark

Hi Mark
Many thanks for your views, it is my intention to obtain a couple of views from professionals regarding the best option.

I was thinking of keeping things separate and doing the MTR first and see how it progresses. If the MTR was successful then I would basically have no home showing as an asset. My debts would be manageable due to more income being available.

I could either go it alone or seek a payment plan. Frankly I have a nagging worry (as you say) that the MTR route may be jepordised. The original Insolvency practitioner did not appear interested in setting up a TD as we owed approx 17k to our creditors (not including mortgage).
In fact he stated he thought we were in debt to the tune of 60k as this is the average he deals with.

I have been working with a local money advisor who said once we are 3 months in arrears with mortgage she will process the MTR scheme for us. Also I have been informed by my local councillor to let him know when the process starts and he will help in any way he can.

Was wondering about the risk of entering into a "DAS" scheme in the interim? I have several concerns:
1) Is not to lose my home until I try the MTR route.
2) Find a way to keep the car as I use it for work travel across Scotland and need the reliability.
3) Keeping the wolves from the door until the MTR scheme is complete, failed or otherwise. I don't wish for my creditors to stake a claim on my home while I am waiting.
John

Hi John

Strange comment from the IP re the ?ú60k.

The DAS would certainly provide a route for you and exclude the house. I see no reason why the car would be an issue either.

The only way creditors could'stake a claim' to your home would be via letters of inhibition. This is fairly unusual and even then you would need to be a wee bit further down the legal route before this is likely to happen.

Perhaps looking into the DAS route via the Money Advisor would at least stop any of the worries you may have re the house, creditors etc.

Mark