In debt

[fatherxmas]

Hello this is my first post here, found this site while trying to find info to deal with my predicament:-

 

I'm a married man with two young children, 9 months and 2 years. My wife and I have struggled with money since the birth of our first son as she had to go to part time due to childcare issues. Though it took us a year later to truly understand the mess we were in as the overdraft got bigger and the credit cards were having the tesco's shopping put on them now and again. The minimum payments got bigger etc, the overdraft said no more. I sat and sorted the money out and realised we were in huge debt. £32k+. That could be even more when I am finished sorting out the 100% mortgage deal that seems to include a futher £15k loan.

 

Anyway, got in touch with National Debtline around 7-8 months ago and followed their lead in sending letters to creditors, of which there are seven, varying in my and wifes names. A few 3-4 agreed a minimal £1 a month, while Virgin and Nationwide persisted in hassling me etc.

 

A few weeks ago I made an improved offer to Nationwide as I had managed to cut down some expenditure. The offer was around £37 but was refused and last friday I recieved my CCJ. The court in Swindon decided that I can afford £357 a month lol. I spoke to Debtline again and I am in the process of asking for a redetermination at my local court. Debtline said that they may not have accepted my offer or judged anywhere near it because it would take 21 years to clear of the £9k+ loan. My budget sheet is wll within guidlines and my money left over for creditors is only £122 joint income for me and my wife. Offer to creditors is prorata by the way. I have to currently pay the first installment by 3rd of jan 2010 which i cannot afford. They have sent me a letter saying they will look for a charging order.

 

My question is should I be looking to go bankkrupt (excuse spelling). My mortgage is worring my wife as the 100% mortgage includes the £15k unsecured loan. Though the payment is as one. I mean mortgage Northern Rock £90k and £15k loan = £105000 one payment to Northern Rock of £620.55 a month. How do these mortgages work? Should I not pay the full price and make Northern Rock a pro rata payment on the loan or continue to pay it as it is.

 

If redetermination is no good and they want me to pay £320 more than I can afford a month, should I look to go bankrupt before it becomes sercured loan???

[palomino]

Sorry to hear about your plight. Rest assured you are not alone in having difficulties.

You have made some good judgments - National Debtline can be a great help.

 

As far as the claim in the County Court goes you should have attended with all your documents so that the judge could see what you could afford. This is why you now have to for a redetermination hearing. (Hindsight is a wonderful thing...).

 

One question for starters : is there any equity in your house once the mortgage is repaid? In other words are you in negative equity?

[fatherxmas]

Been going through paperwork today and have been searching on web for information on my mortgage. It's the Together mortgage. It's breakdown goes like this 90k mortgage + 14.5k unsecured loan. House is valued at £106k-£100k.

 

If I sold house what would I be obliged to do as I have all these creditors chasing me. Could I pay the mortgage off and pocket the profit. Rent new house, then go bankrupt?

 

Or would all profit be taken by creditors and me left homeless with no rent money to put down. Just a thought?

 

Today I have written a letter to Northern Rock informing them of Nationwide taking me to court and me having an unpayable ccj of £357. Nationwide informing me that they will go for a charging order when I fail early next month.

 

Also asked them to take reduced payment on the unsecured loan like rest of my creditors in interest of fairness. Though some posts on web seem to indicate that Northern Rock would likely look for a ccj and to secure the rest of the debt themselves?

 

hmmm what to do.

[Ell-enn]

Hi there, when you received the court claim did you return the papers with an offer of payment?

[fatherxmas]

Yes done all that made offer using pro rata.

[PriorityOne]

£357 a month is ridiculous... you need to attend the re-determination hearing and have this brought down to an affordable level. They can only go for a CO if you fail on CCJ payments. They're not silly... this is why they've been set so high.

 

It's been a while since I was involved in this kind of thing, but you can get a N244 or N245 from the court to bring the amount down yourself. Have you done this or have you requested a formal hearing?

 

You have young children and a life. The length of time taken to clear a debt is irrelevant to those facts. Your mortgage and (un?)secured loan are priority debts at the moment and going bankrupt/selling up is not going to solve the problem of needing somewhere to live and rent to pay.

 

Hold fire on the bankrupcy route for the time being until you've looked into getting this ridiculous monthly payment lowered in line with what you can afford.

[PriorityOne]

Ok... the N244 is the form to have a CCJ set aside and the N245 is the one you need to make a variation of an instalment order. From your previous post, I'm assuming the N245 has already been sent to the court?

[fatherxmas]

Yes letter written yesterday and will be sent via special delivery on monday. I have requested a hearing at my local court.

[PriorityOne]

Make sure you take along all correspondence to show that you've even tried to make an improved offer to them before they went for the CCJ.... and it was rejected.... hence the CCJ. The court needs to see that you are offering pro rata payments to everyone else and that Nationwide thought they were entitled to special rights, bullied you into increasing your offer.... and still went for a CCJ.

 

There is a possibility of you looking at a set-aside of this CCJ on the basis that they included unlawful charges in the balance. However, you may not feel strong enough to take this on as well as eevrything else. If you do decide to look into this, look around the site for threads where this has been done to help you get a grip on what's involved.

 

One way or the other.... once Nationwide is sorted out, we'll try and help you with your other debts to ensure there are no more CCJs.

 

[loobyloo85]

Hi there, I am sorry to hear of your financial diffulties. You are not alone with this - there are many people on this site who can give you useful information.

The together loan will mean that you pay one payment - to the secured side, and another to the unsecured side, but all lumped together in one payment. If you were to go bankrupt, the unsecured side of this mortgage will be included in this. However, the creditors are likely to ask for you to sell your property, meaning the mortgage will be cleared with any equity you have.

 

If I sold house what would I be obliged to do as I have all these creditors chasing me. Could I pay the mortgage off and pocket the profit. Rent new house, then go bankrupt?

If you sell your property for £100K, the mortgage of £90K would need to be cleared first. You would then only be left with £10K equity. You are not obliged to pay anyone this money, however you may feel it best to put this money towards clearing your unsecured debts, including the Northern Rock unsecured side. If you sell your house, and receive in the region of £10K equity, you may be able to look into a full and final settlement to your creditors if you owe £32K. Otherwise, you could keep this money and make increased reduced payments between all creditors to help clear the debts quicker.

 

Or would all profit be taken by creditors and me left homeless with no rent money to put down. Just a thought?

The creditors cannot take this equity, unless they have secured their debt against your property. This money would be yours.

 

 

Today I have written a letter to Northern Rock informing them of Nationwide taking me to court and me having an unpayable ccj of £357. Nationwide informing me that they will go for a charging order when I fail early next month.

If you do fail to meet the CCJ payments, they can issue a charge against your property, howver, as above it is best to complete the N245 variation order form in attempt to get the payments down, and then attend the hearing to represent yourself, and to justify why you cannot afford to pay them this amount.

 

Also asked them to take reduced payment on the unsecured loan like rest of my creditors in interest of fairness. Though some posts on web seem to indicate that Northern Rock would likely look for a ccj and to secure the rest of the debt themselves?

You can mention this when you attend the hearing - that you wish fpr the CCJ not to be granted, as you would like to treat all creditors fairley. Northern Rock do have a reputation especially in debt management plans of looking to secure the debt against your property, so do be aware of this. However if they do this, you can apply for this not to be granted, as long as you keep up with the CCJ payments.

[fatherxmas]

Thankyou for your advice. One factor though is the size of our current house. It's a bit on the small size, i'm not complaining at all it has served us well for three years so far. It's a two bed house with no garden and small living room. The small bedroom you can't fit a full size bed in without blocking the door 3/4 and is suffering from damp pretty bad, and our fixed period ends in 6 months and I expext to get screwed by the new terms.

 

I know we could get a better sized property in renting, but it's a big step. But just thinking with at least 12k equity in the house if Nationwide got a charging order we would likely have to sell anyhow. Would the council be likely to rehouse us in this circumstance?

[PriorityOne]

I know we could get a better sized property in renting, but it's a big step. But just thinking with at least 12k equity in the house if Nationwide got a charging order we would likely have to sell anyhow. Would the council be likely to rehouse us in this circumstance?

 

Difficult.... and it depends on your family's level of need; disability, young children and so on. Whether they decide to house you or not, it won't be instant which means you'd need to rent privately while you're waiting. Also, you wouldn't be a priority until you could be declared homeless.... so all-in-all, there's a lot of waiting around for different stages in the process.

 

So, the question you really need to ask is whether you want to fight to stay in your home or move into the private, rented sector.... whether (long-term) temporarily or not.

Edited December 14, 2009 by PriorityOne

[palomino]

If you sell your house of your own volition then the council has no obligation to re-house you.

A charging order is not a forced sale, nor does it mean there will be one automatically. All it does is stop you selling the property without obtaining a certificate from the person who obtained the charging order. That person will almost certainly not provide such a certificate unless the debt is repaid.

 

If, on the other hand, the creditor forces a sale of the property and you are evicted then the council is obliged to help you.

[PriorityOne]

 

If, on the other hand, the creditor forces a sale of the property and you are evicted then the council is obliged to help you.

 

Yes they are.... but emergency accomodation is not usually very nice.

[palomino]

Yes they are.... but emergency accomodation is not usually very nice.

 

Possibly, but it's better than no accomodation at all. In my own case we had a few weeks in a hotel. Pretty reasonable I thought. No complaints whatsoever.

[PriorityOne]

Possibly, but it's better than no accomodation at all. In my own case we had a few weeks in a hotel. Pretty reasonable I thought. No complaints whatsoever.

 

Very true...

[fatherxmas]

Update: Got court hearing beginning feb and have received majority of agreements from my other creditors to new payment plans. Then this morning electric statment comes through and has gone up £31 a month. Don't know whether to laugh or cry. I even got Northern Rock to agree reduced payment plan! Now though it seems i'm going to have to rewrite to all of them again and offer less. What's the chance of them accepting less after just agreeing an improved offer? Pants!!!!!!!!!

[Ell-enn]

Contact your electricity provider and negotiate the monthly payment down given your circumstances.

[fatherxmas]

Cheers for that advice. Called them this morning and got it reduced to £100 by changing tariff and as I have a council tax break next month offered to pay them that as well so payment will remain at £87! (for now)

[fatherxmas]

Hello readers, I have posted on here before sometime around christmas (hence the name) and was due to go to court for a redetermination. I can't recall whether or not I filled you back in on my situation so i'll start from fresh.

 

I'm married, mid twenties with two children under age of 3. I currently have a mortgage from Northern Rock for a small 2 bedroom cluster home in the Midlands. I have no garden and the second bedroom, you would just about fit a computer desk in. One of my children has to sleep in the same bedroom as me and my wife and obviously all clothes, changing unit etc are in our room too. The mortgage is a together mortgage in both our names with the mortgage took out for £95k and the unsecured loan element for £14k totaling £109k. The house was bought for £107k coming up to 4 years this August. We borrowed £2k ontop to furnish it.

 

We have 31 years left on the mortgage and currently pay around £620 a month for both parts. We are in a fixed rate which expires next August and I know for certain they'll be be putting this rate up then. Also we have another problem as the land surrounding the area is on a service charge of around £30 a month which I knew nothing about for 2 years and we owed a total of £1300 on the property buy the time Northern Rock stepped in and paid it adding it onto our mortgage. I asked for a payment holiday a few months ago and was told if I did my payments would go up £30 a month for the final 31 years of my mortgage.

 

Anyway had house valued in idea of trying to sell up and it was valued at £102k-£105k , I bought it for £109k remember. Anyway I have no cash for fee's etc and when I went to court for redetermination my creditors have been given permision to apply for a charging order on the property as obviously with the together mortgage I have equity.

 

Right i'm posting this now as I'm scared i'll lose it somehow as pc plays up alot so I will continue this just hang on.....

[dx100uk]

..

 

dx

Edited April 26, 2010 by dx100uk

[fatherxmas]

Right, obviously i'm not happy with the house as it's far too small for our needs, and can't really sell it etc.. Now, my parents have inherited a house and have moved into it and have offered their house to me for rent at a good rate. It's decent size being 3 beds and has a garden and is closer to my work, lower council tax band. I'm seriously considering this as I have explained my situation to them and they are willing to have a contract drawn up and are happy for me going bankrupt while renting from them long term. Now, how do I go about handing my keys in to Northern Rock? I intend to take a payment holiday next month and put this aside for bankrupt fees and then not pay the following month and then I will have money for both myself and wife and then the next month which will be july I will be moved into the new house and will pay my first months rent. Is this ok or wrong way to do it?

 

My debts:

 

Joint Mortgage: £95k

Joint Unsecured element £14k

Husband currently unsecured ccj Nationwide £10k

Husband Tesco unsecured £7k

Husband Virgin Credit Card £5k

Wife Lloyds Credit Card £5k

Joint Lloyds overdraft £4k

Wife store card £800

Wife store card £600

 

Ok as you can see our debts are reasonably big and mixed between joint and personal. So we are both looking to go bankrupt here.

 

Currently have 6 month agreed payment plans with most and are paying hugely reduced monthly installements, though most are chargin extra fees and interest willy nilly making the debt grow even further in the past 12 months.

 

We have basic bank account, would we be likely to keep this? Been to CAB and was told to go for IVA but have decided against this as we are really so unhappy in this house. Repayments on CCJ will take 17 years to pay off. Anyway see what you think?

[MARTIN3030]

2 threads merged.Please try to keep your stuff in one thread-it makes it easier for those following to keep up and continue support.

[rory32]

Here's a quick guide to bankruptcy which may be of some help http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/guidetobankruptcy.pdf

 

Really you should speak to a qualified insolvency practioner regarding bankruptcy. You can find one here Insolvency Practitioners Association or alternatively give National Debtline a call....and yes you can keep have a basic bank account during bankruptcy. National Debtline have quitet a good factsheet on bankruptcy here National Debtline England & Wales | Debt Advice | Factsheet 01 Bankruptcy

[rapterman]

The main thing is to be careful at this point and not to do anything that would be seen as fraudulent in the eyes of the official receiver if you do go down the bankruptcy route.

 

The OR will go through your bank statements and credit history, what they are mainly looking for is to see if you recently took out, or used, any credit before the BR that you knew you couldn't pay back.

Use of the Overdraft is okay for day to day use but it wouldn't look good if there was a big purchase on it for something deemed non-essential i.e a big TV etc.

 

The process of the BR is not too difficult, I'm currently going through it at the moment and have been to court, currently waiting to speak to the OR. The mortgage and secure loans etc does make things a little more complex but this will be handled by the OR and IP.

 

When completing the paper work you need to do a very detailed income and expenditure, make sure you leave enough to live on comfortably. All assets need to be listed i.e car(s) etc, and all lines of credit / debt need to be listed even if not used i.e catalogues.

 

Barclays will have no problem in letting you open a cash card account, I made an appointment before my BR and told the woman straight away about my pending BR and she said that it's no problem and that they are opening loads of accounts for un-discharged BR's.