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Best Way to Clear Large Amounts of Debt £60k

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Morning All,

 

I hope this post is in the right place!

 

Here goes . . . I had a company selling cars which I started in 2006 and invested a lot of money in, expanded and took a lease on some premises in 2007, just before recession hit. in 2008 Month after month the company was spending more than it was earning, I did as I thought best at the time and continued to try and battle through. Eventually as could see no way forward I put the company into voluntary liquidation and therefore lost the capital I had invested and was left on a reduced income.

After reducing payments on loans & credit cards I got some defaults and CCJ'S.

 

I am now in a reasonably paid job and have agreements in place with my creditors. (apart from one with DLC which I have posted a separate thread about who are threatening charging order)

 

Current Debts:

CC

MBNA/Idem Servicing £2510

Monument £772

Egg/Moorcroft £3616

Barclaycard 1 £4018

Barclaycard 2 £337

Capital 1 / Frederickson Int £1040

HSBC/Metropolitain £5355

 

Other Debts

HSBC/Metropolitain £5670 (2 x Overdrafts + loan) one of the overdrafts is only for £50 and they will not let me pay this off seperate they say the debts have now merged.

1st Plus/DLC/Hillesden Securities £13585

 

CCJ's

Natwest - Unauthorised Overdraft £964.19

Natwest - Personal Guarantee for Ltd Company £17,300

 

HMRC £2539

 

Total current outstanding £57705 plus:

 

Loan which invested into company from family member £35,000, which I currently pay at £400 pmnth

 

I have a rental property which is worth £200k for which I owe £95k, currently up for sale but no bites. I know its a tall ask but this was for my retirement and if possible would like to keep. I have tried to remortgage (currently with Natwest) but currently unable due to CCJ's and defaults the biggest two with Natwest. I have asked them to transfer mortgage onto interest only so that I can pay the CCJ's off quickly then remortgage, still in talks!

 

I have a £110 mortgage against my property which is worth circa £130k.

 

After reading about ways to increase credit score I have got a Vanquis credit card which I put petrol and food on and pay off before any interest charged to show some positivity on my credit file.

 

I would like to remortgage the rental property but I am currently unable due to my poor credit.

 

Whats the best way to get the debts cleared without paying over 25 years?

 

Thanks in advance!


New to posting - looking for some help here!

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Depends upon what your primary objective is. If its protecting your property assets then frankly you are going to need to pay off your debts. A couple of options spring to mine - a debt management plan administered either by yourself or one of the debt charities (never use a fee paying one) or an IVA. A DMP is an informal agreement and as such there is no guarantee that your creditors will freeze interest - but it worked for me. I paid off £93k worth of unsecured debt, but I was able to do so in less than 5 years which I think helped persuade my creditors to be co-operative.

 

You mention 25 years - presumably tongue in cheek, but perhaps with more than a few grains of truth in it. If so then a DMP may not be right for you. IVA - a formal arrangement with your creditors who would have to vote to accept it. With mortgages extraordinarily difficult to obtain these days for even those with perfect credit histories, your property could be secure by the IVA extending for 6 years as opposed to 5 with a re-mortgage in year 4 releasing equity to pay your creditors. You could do a lot worse than calling one of the debt charities - Stepchange http://www.stepchange.org, Payplan http://www.payplan.com/ (this one is funded by the finance industry) or National Debt Line http://www.nationaldebtline.co.uk/

 

All of them have very informative websites and will give you good unbiased advice pertinent to your exact circumstances.

 

A long shot might be negotiating full and final settlements with your creditors, some of them might be persuaded; but you'd need fighting funds and your creditors will already know that you have equity in your property (they check the Land Registry and match it to your credit reference data) which wouldn't put them into a co-operative frame of mind. Some of folks posting here have used this to great effect but be warned your creditors can turn CCJ's into charging orders quite easily so this approach tends to be best for those with no assets.

 

If on the other hand your primary objective is to become debt free in the shortest possible time, then bankruptcy would do that.

 

With regard to your credit reference - forget it, it is already shot to bits and will be for 6 years at least, you should not consider this in figuring how to deal with your debts.

 

And finally make sure that you have claimed all PPI charges and wrongful penalty charges, if you haven't doen so already.

  • Confused 1

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Hi

 

Unless I am reading this wrong (and I could be) then Yorks assets are more than the total debts and if so then he / she would not be technically insolvent so maybe bankruptcy / IVA would not be an option, cant see full and final settlements getting anywhere either in this situation

 

Another couple of sites worth looking at along with those already mentioned below...

 

http://www.adviceguide.org.uk/england/debt_e.htm

 

http://mymoney.nedcab.org.uk/moneyadvice/

 

Along with the agencies already mentioned you could also try contacting the CAB

 

York could you confirm your full asset values over your total debt as I could reading this wrong? and apologies if I have

 

PS - Payplan are not a charity and never have been, but their debt management plans are definitely FREE

Edited by Wintry

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Very good advice from Custard...

 

You have enough equity in your properties to start again. How old are you?

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Yes equity in properties exceeds the debts, thanks for all the advice. Rental property currently on the market but little interest up to press. Agents coming out to value my residential property next week. Will see how that goes and look at at debt management over a workable period after some conversations with some of the links you guys have posted.

I'm 28, sure can start again, but difficult to get two properties on the ladder from scratch.

Thanks guys


New to posting - looking for some help here!

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Yes equity in properties exceeds the debts, thanks for all the advice. Rental property currently on the market but little interest up to press. Agents coming out to value my residential property next week. Will see how that goes and look at at debt management over a workable period after some conversations with some of the links you guys have posted.

I'm 28, sure can start again, but difficult to get two properties on the ladder from scratch.

Thanks guys

 

Hi

 

Thanks for that

 

As another poster has mentioned CCJs & Charging Orders may be the issue with some creditors

 

If you are a going with a Debt Management Plan provider, Payplan & Stepchange are completely free, so its a no brainer really as to using one of them over the fee charging companies, the trick is making sure at the start that any payments are affordable and sustainable.

 

My opinions

 

Best of luck with everything

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