Bankruptcy - my only option

[Dav3yBoy]

Hello everyone...

 

I have posted elsewhere on this site for help and this is another call...

 

 

In a nutshell i am fighting a debt with Link Finance for £33k

 

I also have accumulated debt with various creditors which comes to around £8k

 

These are for: Credit cards (no longer have), bank account overdrafts, Car loan

 

My total debt is £40k ish

 

I have CCA all creditors and only 2 have failed to come up with anything, The debt with these two comes to around a grand.

 

Link Finance have supplied a Credit Agreement, albeit late. Lloyds supplied one.

 

Even though i am fighting these companies i feel it is going nowhere and at 28 am scared that i will end up taking this debt well into my thirties as i have no realistic chance of paying it off.

 

I have a mortgage with my wife. Northern Rock had a charging order put onto our proprty before they sold the debt to Link who now have the order.

 

 

I don't know what else to do, i can't sleep at night and it is causing friction between my wife and i. If i go for bankruptcy will i be forced to sell my share of the house even though the debt was nothing to do with my wife?

 

We are also on a housing covenant scheme in which the council would be entitled to 30% of the equity (it was a low cost housing scheme)

 

I am out of ideas but don't want my wife to end up homeless because of my doings

 

What do i do?

[Guest 10110001]

Phone the Insolvency Helpline on 0800 074 6918.

[tomterm8]

How much equity exists in the house? (Before the charge by northern rock)?

[Dav3yBoy]

About 30p....

 

No, we re-mortgaged in 2005..

 

Complicated but i will try to explain..

 

House is worth (last valuation) £120000

 

We re-mortgaged for (i think) £79000 as joint owners (it was previously my other halfs on her own)

 

The council also owns a 30% stake as the low cost housing scheme stipulates.

 

I think the equity stands at (to us personally) £4000 as this is all we have paid off, roughly.

 

We can no longer do a remortgage or try to buy the council out because i have a CCJ and the property has a charging order by Northern Rock, which Link bought.

 

Catch 22, rock and a hard place and every other paradox you can think of

[tomterm8]

In that case, if you get three estate agents valuing it as a quick sale, then you will probably find there is little or no equity.

 

In which case, it may be possible for someone else (e.g. wife or family member) to buy the equity at a nominal amount - e.g. 1+ admin fee ( i think it's 211 but it might have changed)

 

Are the unsecured loans in your name, or joint names?

[Dav3yBoy]

In which case, it may be possible for someone else (e.g. wife or family member) to buy the equity at a nominal amount - e.g. 1+ admin fee ( i think it's 211 but it might have changed)

 

Don't understand that bit...

 

All my debt is unsecured in just my name. But like i said Link have a charging order on the property.

 

I know that they can only take some of my portion of the equity. So if we sold the house and got £10k profit (for example) they would only have access to my share.

[tomterm8]

Right...

 

When an OR sells the property, he will normally put it up for auction. This is a fast method of sale, but DOESN'T realise the same price an estate agent would if you were waiting 6 months.

 

So the equity of the house is actually what you would obtain at auction.

 

By default, you would only recieve half of the equity, and so, if the value you'd realise in a quick sale was less than the mortgage, in effect you have no equity - and the OR will transfer the house to your wife for a nominal charge (£1 + an admin fee). Otherwise, any equity will be split 50/50 with your wife, so if your share of the equity is 2,000 he would sell it for 2,211, without actually reposessing the house.

 

It is, of course, a good idea to discuss with the national debt line or a specialist money adviser at the CAB

[Dav3yBoy]

i think i get it now..

 

makes sense but i will give debt line a ring or try and get into my local CAB centre

 

Cheers for all advice

[tomterm8]

Yeah... it is best to get professional help, before considering bankruptcy... I'm not an expert on it by any means, and a judge will only consider the petition if you've saught advice.

[Dav3yBoy]

Good call... thanks

 

Also, i have had a thought, bear with me.

 

If i had a debt that totalled, with all interest added of £32k (the original loan with northern rock was £18k, repayments etc £32k)

 

This debt was bought by Link (god only knows how much for, prob about £1000 or something)

 

If my wife and i released the equity in our house, (she has told me we have about £10k in there) if i made an offer of about £4k for the debt to be settled what do you think my chances are?

 

I won't take the answer as gospel, just what your thoughts are...

 

Dave

[tomterm8]

It's possible... if you send them copies of valuations (made by three estate agents for a quick sale), and a copy of the bankruptcy forms filled out, they might accept your offer.

 

To be honest, i doubt it, but it is worth a try.