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Christina85
Junior Member
United Kingdom
208 Posts |
 Posted - 13 June 2008 : 10:01:08
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My husband and I have been struggling with our debts for years. We are now in a negative equity situation with our current mortgage deal coming to an end in March with our mortgage payments expected to increase further.
There is no chance of remortgaging to another lender and we are already on interest only. We cannot go on as we are, we currently are not in arrears with any payments but often pay most things late and our food and utilities always come last!
We know that we will have to move and go back to rented accommodation. I am contemplating stopping our mortgage payments which will help us to save a deposit and we may also need to buy a cheap car as we would need to move to a cheaper area and may go nearer to family which would also mean changing both of our jobs (I also working in a bank so would most likely have to change jobs anyway).
We also have just over 15k of unsecured debts paying approx £400 per month, min payments which we end up using again during the month- meaning that these debts aren’t coming down. We also have a secured loan of approx 11k- which means that after a possible repossession would still owe approx 50k+ taking into account ERC etc. from the property alone. Our mortgage and secured loan payment totals £1363 per month, so we are paying a total of 1763 on debts alone on an approx monthly income of approx 2100 per month.
I feel that after researching, that our only option is bankruptcy, as we have already been advised that we cannot do an IVA or DMP as we do not have enough disposable income. I just wondered if anyone had any advice for us as I am scared that they may not think we qualify for bankruptcy as we don’t technically have any arrears yet (certainly will when the mortgage payments go up). And also what the process would be, if we should move and find new jobs first and wait for the house to be repossessed before filing for Bankruptcy? Also as our outgoings would be less after moving to rented, would they think that we could now afford the debts.
We are happy to pay what we can afford out of our new disposable income because we are really ashamed that we have got to this stage, but we need an end to this as it is now starting to affect our health. Sorry that I have rambled on, but I am just so confused and worried.
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Edited by - Christina85 on 13 June 2008 12:55:11 |
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eamonn
Junior Member
320 Posts |
Posted - 13 June 2008 : 13:39:40
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| hi christina85 welcome to the forum i cannot answer your questions but i can tell you "you are not alone" we have all gone thru or are going thru the same problems fromwhat you have written br would seem the best solution i know it sounds scary but youwill feel relived once you have made the final discision and made your application one of the forum experts willbe on line soon togive you a fuller answer but good luck with what ever you decide |
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m and v
Average Member
United Kingdom
760 Posts |
Posted - 13 June 2008 : 14:25:22
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Hi Christina - have you spoken to an Insolvency Practitioner? There may be other options for you before taking the BR route.
Melanie Giles is one of this forums experts andmay be the person to talk through your finances and see what your options are.
Have a look a the "experts" link in the left hand column and check out her website.
If you do go down the BR route there are plenty of us to support you and some forum experts like Brett England and Paul of Reviva who can assist you with your BR.
Hope this helps
Vicki x |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 13 June 2008 : 20:08:49
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Hi Christina and welcome to the forum.
Firstly, to "qualify" for BR, you need unsecured debts of at least £750. The judge does have the power to decline a bankruptcy order, but only if they feel that it's not in you best interest.
Given the fact you are looking at a repossession, it is likely your property will be sold at auction and will only realise about 75% of the market value, giving you quite a shortfall. The good news is that this (as it becomes a new unsecured debt) will be written off in your BR. When completing your SOA, make sure you list your mortgage and secured loans in the unsecured section as well as the secured with "shortfall following resposession" as the reason for the debt and you'll be fine!
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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Christina85
Junior Member
United Kingdom
208 Posts |
Posted - 14 June 2008 : 18:47:45
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Hi
thank you to everyone who replied. You have made me feel better knowing that we are not alone and that my thoughts about BR may be justified.
I was just wondering if you think that we should move first and then file for BR, or would we have to wait until the house is sold-so that we know how much the shortfall will be? Also roughly how many payments would you miss before the house is repossessed?
Many thanks again for all your help, I really appreciate the advice and it gives me some comfort during this confusing time!
Christina x |
Edited by - Christina85 on 14 June 2008 18:49:28 |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 14 June 2008 : 23:01:28
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Hi Christina
If this is the route you have decided to go then it is important to get it in the right order.
the mortgage company will need 3 missed payments before commencing possession proceedings . If your payment is due on July 1st then this is the time line I would recommend you review because it is important that you have a roof over your heads and this costs money to do..
cancel all debt paynents
July 1st missed mortgage payment
August 1st missed mortgage payment
Find a new home and give them a deposit
September 1st missed payment
Move into new home in September - mid to end
Posession ( 1st hearing) late September
Hand keys back when moved.
if you didn't hand the keys back then it would take a furthher 6 weeks to reposess the house.
I would suggest you wait intil the house is sold or you are pretty sure what thew negative equity will be before going Br because you may have other options and may be able to pursue an IVA - which may mean you keep your job!.
Worst thing to do is rush things.
hope it helps
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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Christina85
Junior Member
United Kingdom
208 Posts |
Posted - 15 June 2008 : 10:18:15
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Thank you for your advice- It has made things seem clearer for me- as it is quite confusing to know where to start!
Thanks again
Christina  |
Edited by - Christina85 on 15 June 2008 10:18:52 |
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melanie_giles
Senior Member
1191 Posts |
Posted - 15 June 2008 : 12:14:35
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Personally, I don't see why an IVA or a DMP would not work for you, and if you want to protect your position at the bank I would certainly take advice from a qualified professional - ideally an insolvency practitioner - so you are fully informed and have explored all options.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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Christina85
Junior Member
United Kingdom
208 Posts |
Posted - 15 June 2008 : 19:35:34
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I have been advised by Payplan that we cannot do a DMP or IVA as they say that we have not got enough disposable income.
Also the situation with the mortgage is worrying us as the payments are due to increase etc and we cannot see our debts coming down. We will continue to research before we make our final decision.
i hope someone wouldn't mind answering another question for us? If we moved to a rented property would the landlord be contacted about our bankruptcy, and if so how would this affect things if we are already living in the property?
I don't know if anyone else has had any problems or experience with this?
Thank you for all of your help
Christina |
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melanie_giles
Senior Member
1191 Posts |
Posted - 15 June 2008 : 19:37:58
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How much disposable income do you feel you would have when you have moved out of your house and into rented accomodation?
The landlord ought to be notified of your bankruptcy, but most of the time the OR does not bother to do this unless they suspect that your rent is in arrears.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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Christina85
Junior Member
United Kingdom
208 Posts |
Posted - 15 June 2008 : 20:46:29
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its difficult to say but estimating what we will earn from our new jobs I think approx 175-200p/m disposable income.
I can't really believe we have struggled for so long but I think that it was mainly down to the fact that my husband was a courier driver and used to be paid weekly, so it was easier to juggle the bills and put things off to the next week etc. but now he has a set salary per month it is proving too much, but he couldn't go on as he was as he was working all hours and nearly lost his licence due to fines/parking etc.
Do you think it may be better to actually file for bankruptcy while we are still in our mortgaged property, as we do not want to have to move again if the landlord objects to renting out their house to us!?
Thanks Christina |
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melanie_giles
Senior Member
1191 Posts |
Posted - 15 June 2008 : 22:36:21
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I can see where Payplan are coming from, and to be honest the sooner you file the better as it will be over quicker. If you have the money available to meet the £495 fee per applicant, I would start the ball rolling now to be honest - but do bear in mind you are likely to need a rental deposit as well.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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Christina85
Junior Member
United Kingdom
208 Posts |
Posted - 16 June 2008 : 08:26:32
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Thank you again for your time and advice. We plan to save for a deposit first so hope to stay in our mortgaged property for the next couple of months and stop the mortgage payments which the money will then go towards our new home.Then save for the BR fees.
I have just cancelled my DD's-very scary but I am hopefull that this will bring the best outcome in the end for us!
Christina |
Edited by - Christina85 on 16 June 2008 08:27:22 |
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m and v
Average Member
United Kingdom
760 Posts |
Posted - 16 June 2008 : 10:51:53
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Hi Christina
I think everyone who has gone BR has done exactly the same as you and cancelled all their DDs to creditors.
Once the decision is made you can start to see the light at the end of the tunnel.
You will get lots of support as you go through the process.
Good luck
Vicki x |
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mst
Junior Member
254 Posts |
Posted - 16 June 2008 : 11:05:47
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Hello Christina,
I know exactly how you feel about cancelling DD's. I have just cancelled DD's to my 6 creditors. I have set up standing order payments on my payday starting 24th june for amounts that I can realistic afford to pay whilst clearing my overdraft and saving for BR fees (I obviously never told them I am contermplating BR).
I then sent off letters with details as to why I had taken this drastic action (I consider it drastic having never missed a payment in 11 years of being in debt). I literally stood at the post box on a Sunday afternoon holding the letters into the slot for just long enough to make me look like some sort of freak, but I finally let go.
I then enjoyed a couple of glasses of my favourite red vino and started to look on the brighter side of things.
Many people I am sure have been or are going through what you are feeling so you are not alone.
Best of luck,
mst |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
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confused and scared about bankruptcy
