Hi davm

Hopefully Mark or Kevin will pick this one up. Looks a bit complicated for me. Sorry.

Pat

Hi davm,

Sorry to hear you are experiencing all of this worry.

A first step might be to review the way you are prioritising payments currently. If you're still paying ?ú400 per month into a debt management plan you may need to consider allocating some or all of that money to repaying the arrears on your mortgage, secured loan and council tax.

If you speak with the lenders and the council you may well find that they are open-minded about accepting repayment of the arrears over a period of time that will allow you to get back on track. These three debts are much more important than your unsecured debts.

The second step might be to review where your finances are once you have made arrangements on these three debts. You might be well advised to continue with the DMP at a lower level or it may be that a trust deed or bankruptcy will be better options.

Alternatively it might be worth speaking with an insolvency practitioner (the people who handle trust deeds). They are duty bound to consider all solutions with you and may be able to lend some assistance in restructuring your finances and helping to ensure your home is secure and council tax paid.

Hi davm

Could you let me know:

The total debt between you both.
Your total monthly household income and expenditure.
Details of any Hire Purchase (Cars etc)

Bankruptcy (sequestration) should always be the last option and best avoided if possible. DMP is the best option, BUT ONLY if it works and the debt can be paid off in a realistic period of time. My big worry is that you have Council Tax arrears and they can fast track matters through the court and petition for bankruptcy.

If you let me know the above info, I should hopefully be able to guide you with a bit more clarity.

Mark

Hi Mark,

thanks for getting back - yes i am worried about C-tax arrears as i know that they can enforce.

the total debt unsecured is around 55k - secured loan is 45k

my monthly income is approx 1100 husband 1500 - if we are lucky - not had a lot in the last 3 months which has meant that again we have fell behind with full payments to mortgage and loan, although he has a couple of bigger jobs in the pipline, so hopefully will improve.
Going to speak with the loan company regarding insurance as i do have a policy - we will see if my circumstances warrant!!?

outgoings - basically everything whats left - robbing peter to pay paul.
If i stop paying the unsecured debt throught the DMP and move it to the say Council tax and loan - what will happen to me - will the credit card companies and bank not push for bankruptcy anyway?

one car fully paid for - worth around 6k (very estimated)

Our problem is basically that I dont have enough income to sustain the mortgage and secured loan at the level the companies wish - can understand - really between the devil and a hard place; as even if i could sell the house tomorrow - even at a good price, I wouldnt get another mortgage because of damaged credit rating anyway.

Chasing my tail!

quote:

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Originally posted by Mark McFadyen

Hi davm

Could you let me know:

The total debt between you both.
Your total monthly household income and expenditure.
Details of any Hire Purchase (Cars etc)

Bankruptcy (sequestration) should always be the last option and best avoided if possible. DMP is the best option, BUT ONLY if it works and the debt can be paid off in a realistic period of time. My big worry is that you have Council Tax arrears and they can fast track matters through the court and petition for bankruptcy.

If you let me know the above info, I should hopefully be able to guide you with a bit more clarity.

Mark

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Hi davm.

Hope you don't mind if I put my oar in too and ask a couple of questions.

Do you know the settlement amounts for your mortgage and secured loan, or at least a rough estimate of what is outstanding? Also, what do you estimate your house is worth at present, and in what geographical area do you live, if you don't mind me asking?

Can I also clarify, is your husband still undischarged from his bankruptcy? And is the house jointly owned between you?

Sorry for the interrogation, but resolving a tricky situation like yours requires as much info as possible!

Kevin

Not at all Kevin; the more info I get to guide me through any process I have to go down is very helpful!

I stay in a reputable area in renfrewshire (can advise on this further through private means) if required
House is owned soley my me.

Rough estimate is combined mortgage and loan 355k - house was valued in 2007 at 450k when we took out the loan - understand that this valuation will have dropped of course.Its the loan of course that is killing me - taken out jointly! If only I had a crystal ball!

Husband still undischarged from bankruptcy.

Thanks

quote:

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Originally posted by Kevin Mapstone

Hi davm.

Hope you don't mind if I put my oar in too and ask a couple of questions.

Do you know the settlement amounts for your mortgage and secured loan, or at least a rough estimate of what is outstanding? Also, what do you estimate your house is worth at present, and in what geographical area do you live, if you don't mind me asking?

Can I also clarify, is your husband still undischarged from his bankruptcy? And is the house jointly owned between you?

Sorry for the interrogation, but resolving a tricky situation like yours requires as much info as possible!

Kevin

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Thanks davm,

This is a very difficult situation you are in. I think you may be right in saying that your basic problem is that your income is insufficient to service that size of mortgage/secured loan. Essentially unless your income is likely to improve significantly then I'm afraid you probably will have to sell up and find something else. (Though, have you tried asking to switch to an interest-only mortgage for a while instead?)

Even if you felt you could just about cover your secured debts, it sounds as though there is nothing left for your unsecured debt. Inevitably your unsecured creditors would pursue legal action before too long and things would unravel fairly quickly.

From what you say, I guess you know this already. You may also be right about finding it difficult to get a mortgage on a cheaper place, so you may be well advised to redouble your efforts to find a suitable tenancy locally, at least as a temporary measure.

If you do decide to let the house go, the unsecured debts may be able to be largely cleared from any profit. However, if you think it is likely that there would not be much profit from a sale, a trust deed is probably your best bet, using what profit there may be and potentially contributions from your income too since your outgoings would be much lower in a tenancy.

Sorry I can't offer too much optimism for you regarding your house. Maybe Mark has some ideas that haven't occurred to me? What I would say is that from talking to others who have been in a similar situation to you, hopefully you might find that, despite the short term pain, in the long run you feel better off as you would no longer have the constant stress and worry.

If you'd like to discuss matters in more detail outside of this forum, I'm sure any of the experts here would be more than happy to do so - do feel free to get in touch.

Kevin

Hi Kevin,
Thanks for getting back to me;

If I managed to sell the house to pay off the mortgage (still think this is unlikley as there are a couple for sale within the estate that have been on for over a year) - but say was unable to pay off the full amount of the secured loan on it but certainly make a contribution to paying some of it - would the remainder of the loan then be turned into unsecured debt?

Yes I think that I am at that stage where I just want some relief and to live again without stress and be at least able to look forward with a bit of hope. I know bankruptcy is the last resort I want to consider, but in absence of a buyer of any description and the mortgage company repossessed; do I just let the loan people and mortgage company fight it out so to speak and when is the time to apply for bankruptcy before or after the event?

quote:

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Originally posted by Kevin Mapstone

Thanks davm,

This is a very difficult situation you are in. I think you may be right in saying that your basic problem is that your income is insufficient to service that size of mortgage/secured loan. Essentially unless your income is likely to improve significantly then I'm afraid you probably will have to sell up and find something else. (Though, have you tried asking to switch to an interest-only mortgage for a while instead?)

Even if you felt you could just about cover your secured debts, it sounds as though there is nothing left for your unsecured debt. Inevitably your unsecured creditors would pursue legal action before too long and things would unravel fairly quickly.

From what you say, I guess you know this already. You may also be right about finding it difficult to get a mortgage on a cheaper place, so you may be well advised to redouble your efforts to find a suitable tenancy locally, at least as a temporary measure.

If you do decide to let the house go, the unsecured debts may be able to be largely cleared from any profit. However, if you think it is likely that there would not be much profit from a sale, a trust deed is probably your best bet, using what profit there may be and potentially contributions from your income too since your outgoings would be much lower in a tenancy.

Sorry I can't offer too much optimism for you regarding your house. Maybe Mark has some ideas that haven't occurred to me? What I would say is that from talking to others who have been in a similar situation to you, hopefully you might find that, despite the short term pain, in the long run you feel better off as you would no longer have the constant stress and worry.

If you'd like to discuss matters in more detail outside of this forum, I'm sure any of the experts here would be more than happy to do so - do feel free to get in touch.

Kevin

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Hi davm

You would be unlikely to sell the property unless you had sufficient to pay off the mortgage and secured loan in full (plus costs) It is unlikely, in my experience that the secured lender would accept a reduced amount to clear the debt, although you should always try to get them to accept a specific amount in full and final settlement.

Mark

It may be easier just to surrender the house to your mortgage lender for them to sell. They'd undoubtedly add on various charges, but if you were going bankrupt or signing a trust deed it would not really matter how much of a shortfall there is to the secured lender as it would be getting written off anyway.
Alternatively, if you were to go for bankruptcy/trust deed first then your trustee may organise the sale.
The sooner you enter into an insolvency procedure the sooner you will get to the other end, so I would say there is little point in hanging around if that is what you decide to do.
I'd say your next move should be to speak to an expert who can look at your situation in more detail and advise on the best route. As I say, bankruptcy may well be avoidable, for example by means of a trust deed. You can follow the appropriate link on this site if you wish to speak to me or any of the other resident experts and we'd be happy to help further.

Hi Kevin,

Been trying to rent a home - been one bad stint after the other - because of the bankruptcy and my now diminished credit history we have gotten no where;

Been also trying to just put any money that we have towards the mortgage and the loan on our property; also spoke with the council and have come to an agreement over council tax arrears - can only say that things are going to hopefully improve as husband now picking up some work (allbeit slowly) but fingers crossed! my aim is to just try to keep the creditors sweet for the timebeing and I acknowledge is a difficult time for them too.

My DMP is with Invocas and ?ú395/month - ?ú60 of that is for the management fee - do you think they would consider the likeliehood of a protected trust deed for me in my postion now - rather than bankruptcy as although I thought it would put an end to things - the renting senario has now got me re-thinking!

Ha Davm

Have all the creditor frozen interest. Even if they have, it appears the DMP will take approx 14 years to complete. Can I ask why Invocas never suggested a Trust Deed or even sequestration at the start? Possibly due to the ?ú10k DMP fee.

I see 2 scenarios, you try to maintain the payments and hope things improve and continue with the DMP or you look at something formal TD or Sequestration. If you move along the formal route, then you may need to resign yourself to walking away from the house, however you would need to revisit the rented accommodation idea and perhaps look a bit further afield. I can imagine this is an issue with schooling etc, but would have thought that you would be okay for renting with a decent deposit.

Not sure if this helps any.

Mark

Thanks Mark,

I think you are right re the management fee issue although to be fair at the time of setting up the DMP - I thought it would only be a temporary arrangement; however, I did speak with someone else at their 'new tomorrow' company who advised me not to go down the line of sequistration - just to continue to pay the DMP which I hasten to add because it was taken out as a short term option did not allow for the freezing of interest. No mention of a trust deed.

I realise that I have to give up my home - problem is trying to get someone to let you their property with a bad credit history - bitter edged sword!!They all do credit checks and even though I am working - husband now self employed - no proof of income as yet its very dismaying. If anyone has any recommendations feel free to chip in to this mess!

If I was to hand the house back; and I secured alternative accommodation, would the mortgage and the loan company sequestrate me or am I best doing this on my own?
Although the thought of bankruptcy is daunting - I am not going to get credit anyway now because of my history and that of my husband for a considerable time - therefore it does seem the easiest way out for me as there is no way that i can pay off all the debts, and would possibly end up with a bit more income and a stress free head! Hopefully the sale of the house may at least cover the costs of the mortgage and the loan company.

Hi davm

If you chose the formal route, then if the future sale of the property (assuming you walked away from it) produced a shortfall, it would regarded as a contingent debt and therefore would rank like all other debts in the TD or sequestration. Effectively it would work it's way back to the date of the TD or Sequestration and become a claim.

TD is certainly the softer option and although you would require to make payment from income, this would also apply in sequestration.

Can I ask where abouts you stay (generally) I know a few estate agents/letting agents and hopefully can advise them of your plight to see if the could assist.

Chin up.

Mark