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dave.p
Junior Member
178 Posts |
 Posted - 25 March 2008 : 00:27:47
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My house is valued at approx £225,000 but this may be slightly less as prices have dropped since valuation june 2007.
I have secured debts of £115,00 mortgage, and secured loan (originally £63,000 with Blemain finance taken out in June 2007, but now standing at £78,000) with charges they have levied. Extornate springs to mind and although I have tried enderlessly to challenge these exescive charges it falls on deaf hears. I have an arrangement throught the courts to pay £800 to both creditors, however I have struggled to keep this up. I have now received a repossession notice for 15th April, and really have had enough, and feel like handing back the keys. However pride tells me not to do this, but I really just don't know what else I can do. Is bankrupty an option, how would this impact on my business (I am a sole trader). And last but not least, bearing in mind I have about 2 weeks before the repossession, could I actually have time to file a bankruptcy. Other debts I have are as follows-
£900 arrears - gas/elec
£1295 arrears council tax
£5,000 unsecured loan
Your help and advice is much appreciated
Thankyou
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 25 March 2008 : 01:20:56
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Hi David,
Sorry to learn of your situation. I wouldn't rush into bankruptcy nor hand back the keys to the property.
Firstly you need to address the repossession notice and get it suspended. To do this you would need to be able to demonstrate that either you could now pay or have moved forward with a sale. Forms need to be lodged at court and an hearing attended.
Suggest that you contact an expert to handle this and work through in detail your position.
From the numbers you have posted It is quite possible that you could sell the property and clear all your debts - in the interim an arrangement would need to be negotiated with creditors
all the best alan
www.debtdr.co.uk |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 25 March 2008 : 08:45:34
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Hi David and welcome to the forum
as Alan says the house is one separate issue and needs to be deat with as a matter of urgency. You should either contact a solicitor to reprsent you or one of the forum experts who will be able to guide you.
I would expect that if the house was repossessed that there would probably be suficient equity - even in a forced sale position - to clear the secured debts.
If you were to go bankrupt now then any money that was left over from the sale of the house ( either from your own actions or by a forced sale after repossion would be used to pay your unsecured creditors ).
It would be such a pity to go br for just 7200 of unsecured debt.
Thinks may look gloomy now but there are options and the most important thing for you is to remain in control and carefully decide on the future.
No doubt there are other issues at hand but I suspect that the most obvious solution is to hold off the possession / repossession and sell the house quickly. then clear your unsecured debts.
You would be able to make a clean start without the stigma of br provided you do it in the right order.
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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dave.p
Junior Member
178 Posts |
Posted - 25 March 2008 : 14:12:39
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Thanks Alan and Paul for you prompt replies.
Here is the quandary I am in.
The house has been up for sale for over a year and we have just reduced it yet again. However the current market does not install any confidence in buyers or sellers.
My main concern is the pending repossession on the 15th April. I don't feel as there is any room for manouevre with the lenders or should I say lender. My mortgage company to be fair have not pursued anything as yet even though I am now in breach of the agreement set up at court ie £800 to both mortgage and secured loan.
The real driving force appears to be the company I have my secured loan with Blemain Finance. Hinsight is a great thing, but I wish I never set eyes on them, but cutting along story short it was a needs must at the time. They have charged extorinate amounts of charges to the account, borrowed 63,000 in June last year, and they have now added charges brining the total debt upto 78,000 (even though my arrears to them is approx 3,500) I have challeneged the charges with limited success and have a feeling they are operating outside the legal remit. But where can you go, who would look at this..??
Despite all this, I am unable to make any payments of the account prior to pending repossession date ie 15th April. I am self employed and have funds due at the end of April, which could pay off some to the debt.
I feel like handing the keys back, but it's a pride thing as many of you will know. I have worked all my life and don't want this to beat me.
I have looked at Bankruptcy, however most of the secured debt could be cleared if the house was sold or repossed and then sold. But I suppose theres no guarantee of what the house will fetch, even if it eventually went to auction, and if it didn't meet the debts, I assume I will still be pursued for any outstanding monies.
If only I could have a little more time, but that is not on my side.
I have managed to sort rent accomodation should the house have to be repossessed, but I really would like to sort something out.
Knowing what you do now, what would you advise,
Repossession/Bankruptcy/IVA or something else I am not aware of..??
Grateful for your advice on this...
Davep
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melanie_giles
Senior Member
1191 Posts |
Posted - 25 March 2008 : 23:05:29
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Sometimes Dave, it is time to realise that things are not worth fighting for any more and it is time to move on. This property sounds an absolute burdem, which you can no longer afford to carry, so I personally would seriously consider whether it is time to let someone else deal with the problem and find yourself a nice rental property to move your family into.
I would not be leaping into bankruptcy proceedings, until the outcome of the house sale is determined, because this might leave you with a shortfall which can be included as a bankruptcy debt. In the meantime try and maintain some form of token payment arrangement with the other creditors until things are more certain. |
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dave.p
Junior Member
178 Posts |
Posted - 26 March 2008 : 08:30:57
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Hi Melanie,
I understand what you are saying about token payments. But unfortunately the repayments were set and agreed at court ( 2 x £8000 to bot my mortgatge company and blemain finance (secured loan). It is Blemain finance that are driving this, and I have some serious issues on the charges that have accumalated on the loan (63,000 borrowed in june 07 now stands at 78,000 of which only 5,000 is arrears)
They are very aggressive and having fought off one repossession (last minute payment) I just cannot see a way forward this time around (I don't have the funds coming in until end of April.
I have the chance to rent, but and feel this may be the best option, as if I am repossessed I doubt very much I would be in a position to obtain the rental property I have the opportunity of getting now. I want to keep my family in something decent, thats the least I can do for them.
It really is a nightmare. We have dropped the house dramatically, and are just preying we get an offer on it prior to the 15th April. If we do get an offer what details would I need to take to court in order to suspend the repossession..??
Last but not least, I really am mentally worn out with all this, as I am sure many others are going through difficult times. If I was to choose a professional insolvency agent, what sort of charges could I expect. Would the charges have to be paid up front. And is getting professional help going to solve any of my problems, that I can't solve myself.
I really appreciate your advice.
Regards Davep
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 26 March 2008 : 08:47:23
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Hi David,
I agree with Melanie it seems this property is such a burden for you and although it appears from valuation you have given that there is some value in the property it is not selling.
Take the rented property and hand the keys (As well as the burden) over to the Mortgage companies to deal with.
As Melanie has said, if you do this the finance companies will sell off the property perhaps with a shortfall which will leave you owing Blemain finance money.
I would not advise Bankruptcy for such a low amount of unsecured debt, as when you get into your rented property you would probably be able to sustain a debt management plan and wait to find out what if any the shortfall is from the house sale, at this point you can rethink your situation to see if either an IVA or Bankruptcy would be the best route.
You can contact the experts through their relevant website links and have a chat with them, they will let you know your break-down of costs.
All the best
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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dave.p
Junior Member
178 Posts |
Posted - 26 March 2008 : 09:09:58
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Hi Julian,
Thankyou for your reply, it is just a breath of fresh air to be able to discuss these burdens with experts.
I have had several companies contact stating they could re-arrange a mortgage, in effect paying off my current creditors, and starting a fresh. They state they can do this even though my credit history is poor now.
I am very cautious of going down this route, one I have had a nightmare with Blemain Finance, with charges they have levied I did not realise existed and certainly were not clear in the paperwork they sent me. Secondly, I don't really want to increase my debt, and thirdly the problem really is the outgoings of the mortgage and secured loan, ie the house. There is equity in it, albiet a small amount eroding as each and every day passess, we are desperately trying to sell it. However the crucial hurdle to get over is the 15th April ie proposed repossession date.
If I could raise some cash to keep the 'wolves' away from the door so to speak, allowing further time to sell, then this would be the ideal situation. Unfortunately I can't see the courts suspending the repossession order unless I have some answers for them. (another viewing today fingers crossed)...but I am really worried, and for the first time in my life, have no real answers to this problem.
I am worried for my family, my and my wifes health and just don't know what else I can do.
I have funds arriving end of April that could pay some monies to my creditors, but have discussed this with Blemain and they will not cancel repossession date, unless I settle arrears on arrangement (£1,600 2 months)..which I just cannot physically do.
Do you suggest contacting companies that specialise in lending to bad credit cases....???
Is there any company you can suggest that would look to facilitate a small loan of say £2,000-3,000 raised on the securtiy of my property. However I am mindful secured loans generally take 3-4 weeks and I just have not got that sort of time.
Any ideas', suggestions.
I can move into rental property as from 1st of April, but will be taking further debt on, as I will now have rent to pay, however at least I and my family have the securtiy of a roof over our heads should everything go pear shaped..and we loose the house.
Your views/advice are warmly welcomed.
Davep |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 26 March 2008 : 09:28:22
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Hi Dave,
The problem is if you go down the road of a re-mortgage you will be penalized on the rate due to your current arrears.
Secondly they will or should look at your affordability to pay and this clearly is not high enough to sustain the level of loan you will need to redeem your mortgage and secured loan.
I don't think a re-mortgage at this point will help you in the long term it will buy you time, but not solve your problem.
Also if you take out a new mortgage at this point you will have early repayment penalties which will eat further into your remaining equity.
I think these moves will only put off the inevitable, However this is just my opinion and I suggest you seek advice from an expert in these matters.
As far as moving to the rental I would advice you to pay this and let the mortgage payments and arrears form part of the sale of the property dealt with by the mortgage company and then work out the shortfall at the end.
Any debt left over will become unsecured and therefore will enable you to look at an IVA or Bankruptcy.
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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dave.p
Junior Member
178 Posts |
Posted - 26 March 2008 : 11:42:31
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Thankyou Julian, sounds like really good advice.
I suppose deep down, it's admitting to failure, something I have never had to do before.
I know deep down in my own heart handing over the keys is the right thing to do, but hanging on to see if we could get a sale.
I have just checked and the actual amount I owe combined is approx 185,000, I am fairly sure the house will sell even at a dramatically reduced amount of £215,000 as others are now going and this is a far superiour plot. But time isn't on my side as you quite rightly mentioned.
If it does get repossesses, I am fairly happy even in forced sale through auction it would make around 180,000 - 200,000 so more than enought to clear the debt, having said that I am sure they will add more charges should it go down this route.
I shall hope and pray that the viewing we get today brings some hope of sorting this and an offer materialises, but maybe time will not be on my side.
I am a fighter and I am sure I will get through this, although it does appear to be a million miles away...
Once again thankou for your advice, and to the forum for allowing me to discuss this and more importantly realise I am not the only one going through this.
My sincere thanks to you all.
Davep |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 26 March 2008 : 13:17:09
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Hi Dave,
Good Luck in whatever you decide to do.
All the best.
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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dave.p
Junior Member
178 Posts |
Posted - 26 March 2008 : 13:49:33
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Thanks Julian and to all the other experts on the forum. One last question , the unsecured debt I have amount to very little in comparison and basically consists of:
£900 gas and elec (npower)
£1400 Council tax
You mentioned debt management plans..are these amounts something than could be incorporated in a said such plan. If so, who do I need to speak to in order to revue this...
Regards Davep |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 26 March 2008 : 15:17:45
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Hi Dave,
How old id the council tax debt as they tend to refer this to bailiffs via a liability order so I would suggest contacting the council and npower and trying to negotiate a reduced monthly payment by explaining to them your situation, also you could do the same with your unsecured loan of £5k
All the best
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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dave.p
Junior Member
178 Posts |
Posted - 26 March 2008 : 15:56:52
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Hi Julian,
The council tax is subject of a liability order. I have been paying agreed amounts off it, but missed last month and this months is due.
The liability order was granted on 20th July 2007, and the latest letter I have basically states that the Balifs will be instructed to act to recover the total debt unless within 14 days I pay debt, contact them again. I do want to contact them and offer a payment, but have to wait until April for funds to come in...??
The council tax debt covers a period from 2006 -2008 this years starts again on 1st April.
I have managed to make a payment on my £5,000 loan so that is alright for now, due again April.
Any advice.??
Davep
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 26 March 2008 : 19:13:01
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Hi Dave,
Try contacting the council now and negotiating if it is passed across to the bailiffs you will be able to negotiate a payment plan with them, but they will take what's known as walking possession where they will list your goods and seize them on behalf of the court, you will be allowed to use the items whilst under walking possession, but if you miss a single payment in the installment plan they will come back to collect, so if you can make the negotiations with the council directly then this could save an element of hassle on your part.
All the Best
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 26 March 2008 : 23:26:43
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Hi Dave, any luck with today's viewing?
I assume the 'proposed possession' of the 15th is a possession hearing not a warrant for eviction. Could you clarify please as this will have an impact on timings.
In either case an accepted offer will usually enable a suspension and buy time - I succesfully fended off an eviction scheduled for the 3rd April this morning, where my client had not made a payment since October and had breeched the terms of the suspension.
So it can be done - suggest that you talk with an expert - Paul and Brett are both well versed in these areas.
All the best alan
www.debtdr.co.uk
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Is bankrupty an option?
