Will Paragon secured accept a settlement figure rather than repossession?

[innamess]

Hi,

 

I have a secured loan with paragon and a mortgage with Nram totalling £161K.

 

I owe Northern Rock £118K and I owe paragon £43K.

I am struggling to pay them both every month.

I am basically paying two mortgages and I can't cope anymore.

 

I have already paid Paragon £38K over the last 7 years and still have a balance of £43K so £35K of that is interest alone.

 

Our monthly income has dropped and we have accumulated arrears in gas, Electric, Council tax and water as well as other debts.

 

We can't keep up repayments for much longer

so I have had the house valued in the hope I could sell up, pay off Nram and Paragon and then rent somewhere to make life a little easier for us to cope financially

but my house was only valued at £145K maximum.

 

Has it ever been known for Paragon to accept a settlement?

 

If I sold and paid back mortgage there would be about £20K left for paragon.

I have already paid £38k so they would have more than recovered what we borrowed (£46K 7 years ago)

 

I really need to find a way out before things get worse and if we get repossessed they could end up with less.

 

Our unsecured debts total £39K so it's likely we will be made bankrupt which we want to avoid.

I don't see any way out.

I am at my wits end.

 

My wife is frightenely depressesd with the strain of so much debt and I think she is close to a breakdown (seriously).

 

can anyone offer any advice please.

 

Thank you.

[innamess]

anyone please? any suggestions greatly appreciated. Thank you.

[innamess]

My last attempt at getting some help, anyone have any advice at all please????

[honeybee13]

Hello there.

 

I'm sorry you haven't had any replies yet. I'll alert the site team and hope someone will be able to help you.

 

My best, HB

[caro]

Hi inamess and welcome to CAG.

 

Have you had a redemption figure from Paragon?

 

Do you have a particular reason not to become bankrupt?

[innamess]

Hi, and thank you.

 

I have not asked for a redemtion figure yet, I've just been trying to work out ways to get us out of this mess.

 

I'd love to avoid bankruptcy because it's so serious and could affect us getting things like insurance in the future.

I'm not sure if Bankruptcy is a suitable option but I wouldn't rule it out,

 

I was just wondering if Paragon may accept a pay off with the remainder rather than us go bankrupt and get repossessed.

 

At least now we can get maximum price for our house, sell up and then only have our unsecured debts to worry about

which I hope will be slightly more manageable if we could just get rid of paying this second mortgage.

 

It may be that bankruptcy is the better option though considering the amount of debt we have (£161K secured, £39K unsecured and around £1.5k utilities or "priority" debts)

but I don't want to make a huge mistake by letting them take the lot and making us bankrupt.

 

At the moment I am hoping that in 6 years when defaults are clear from credit file

we may be able to get another mortgage (even if only for a flat to keep as investment until kids leave home then we move in)

but I would imagine if we are made bankrupt we will never get accepted for a mortgage again.

 

But then another part of me wonders if that's even important now???

Lots of people rent now so does it matter if I never own my own property again?

Probably not if I think about it.

 

I just don't know which way to turn and I am worried about my wife becasue the stress and worry is making her physically ill.

 

Thank you for coming to help, much appreciated.

[caro]

If things are that bad, I think you are doing absolutely the right thing by considering selling up yourself, although repossession doesn't usually lead to bankruptcy. In fact it is not unusual for repossessed properties to be sold cheap and people to be chased for a shortfall later. If they make you bankrupt they can't come back for the shortfall later. Much better to keep control of the situation yourself.

 

You don't say whether or not you are actually in arrears with Paragon at the moment.

 

Was there any PPI?

 

Have there been charges?

 

Where have you got the figure from for what you owe Paragon?

 

I'm just trying to get a fuller picture.

Edited October 9, 2012 by caro

[innamess]

Hi Caro,

 

I'm not in arrears with paragon becasue they add charges.

 

I have recently wrote to them and demanded them back which suprisingly they did so my account now stands as it would have.

 

I have regular statements and the balance is £43K.

 

My original loan was for £46K

 

I've paid for 7 years and already paid them £38K

so £35K was interest the other £3K has come off our balance..

 

There is no PPI on mortgage or Paragon.

 

I ideally would like to sell up and pay them both off with paragon getting around £20K in full and final settlement.

 

They would have still made a huge profit from me but don't know if this has ever been done.

 

I just thought it may be more appealing to them than trying to cahse us for money because with debts we have they will probably never get much out of us.

 

Thanks for your help

[caro]

So the balance is £43k, but presumably that is if the loan runs to the original term. At the beginning of a loan there is always much more interest and very little coming off the original loan. As time goes on you are paying less interest and more off the loan. If it finishes early, then there won't be as much interest.

 

I would contact them and ask for a redemption figure if you pay it off early.

 

I think you need to be looking at the bigger picture and consider your debts as a whole and how you can tackle them. I would suggest that you complete a budget sheet and see how things stand. There's one here that is quite practical. Budget Sheet.xls

 

Although it's daunting, and probably depressing, it's the start of taking control and that can be very empowering.

‎

[innamess]

Great advice, thanks Caro,

 

I will get it filled in over the weekend and let you know.

 

I'll ask for a redemtion statement to and see what figure I get.

 

There may be some light at the end of this tunnel after all.

 

Thanks again.

[innamess]

Hi Caro, just to keep you updaed

 

I have filled out the budget sheet and I am -£426.79 per month.

 

If I didn't owe them we would be just on budget and perhaps things wouldn't seem so bad.

 

I'm going to call them in a minute as I don't have the money to pay them on moday.

 

I feel sick but it's got to be done so best get it over with.

 

On a plus though I have just received a credit for £3,500 for PPI

which has come off a ccj with my bank so my unsecured debts look a little lighter!

Thanks for your help.

 

I'm hoping more PPI claims come of my unsecured debts becasue it really makes a difference to my mood seeing the balance come down

although it's still a lot of debt I feel more in control now with my new spreadsheets and organisation.

 

Just need to sort this paragon and hopefully my wife will smile again.

 

Thanks for your help

[caro]

To be honest innamess I wouldn't worry so much about the unsecured debts because if they don't get paid your home isn't at risk.

 

If you get any more PPI claims tell them that you want the cash back. It's your money and you can use that for the important priority debts.

 

Do you have PPI with Paragon?

 

How did you get on when you phoned them?

[rdm2006]

Have you considered the mortgage rescue scheme sale to rent. I did this and although it was very long winded (we were one of the first in our area so it was a learning curve for everyone) we still live in the same house but now rent it.

 

general help with the mortgage rescue scheme

[innamess]

Hi,

I called them Caro and they were very off with me on the phone.

 

They were quite threatening and told me that I had to pay or they would repossess etc

 

I explained that my priority was with NRAM and I wanted reduced payments for the next 6 months until I can get back on my feet,

I also told them that they could take the place if they wanted it and I'd go bankrupt

and then they could have the rest from the proceeds of sale after NRAM had theirs which wouldn't be that much

 

however they already had £38K out of me already so they won't exactly be at a loss.

 

He became slightly more co-operative after that.

 

I rang CAB who put me in touch with national debtline and we did another budget sheet so have forwarded this to Paragon.

 

Still awaiting response but it does appear that they will accept and review in 6 months time so I feel a little better now.

 

Thank you for your help.

[innamess]

Have you considered the mortgage rescue scheme sale to rent. I did this and although it was very long winded (we were one of the first in our area so it was a learning curve for everyone) we still live in the same house but now rent it.

 

general help with the mortgage rescue scheme

 

 

That sounds interesting. Ideally we would like to move out of this area altogether though so im going to try and find another solution first that enables us to either sell up and move or up and leave and rent elsewhere. Thanks very much for the info though, I will definately take a look before I rule it out. Thank you.

[caro]

Glad you feel a bit better about things. May be best to keep everything in writing now rather than dealing by phone.

[rdm2006]

That sounds interesting. Ideally we would like to move out of this area altogether though so im going to try and find another solution first that enables us to either sell up and move or up and leave and rent elsewhere. Thanks very much for the info though, I will definately take a look before I rule it out. Thank you.

 

Once a housing association buys it, you could put in for a transfer to another area................

 

 

EDIT: also have you read this about NRAM (dont know if it applies to you but it may help in some way)

 

It seams to apply to NRAM Together Mortgage

Edited November 11, 2012 by rdm2006