advice please

[newman]

Hello,

I would be grateful for any advice.

I have £15k unsecured loan and approx £20k on credit cards with 5 companies - in my name only.

Our house is valued around £150k and I owe £60k on the mortgage £80k on a secured loan - both in joint names.

I have good credit and have never missed payment/paid late - no ccj's, but my income has now dropped by £300pm.

I will be using my bank overdraft to get me by over the next few months

Should I be looking at an IVA? Any other suggestions.

Thank you.

[MelanieGiles]

Hi newman and welcome to the forum

If you are insolvent - ie you cannot afford to pay your creditors when the contractual payments fall due you have three options:-

1 File for bankruptcy
2 Propose an IVA
3 Offer a Debt Management Programme to creditors

There are pros and cons of each procedure, so you really ought to take advice from an insolvency practitioner directly who can tell you more about these procedures.

And in the meantime, don't rack up any more credit you will not be able to pay back ie by increasing your bank overdraft.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[newman]

Hello Melanie Giles,

Thank you for your advice.

I will look into these options.

With £35k owing and payments approx £750pm, what could this go down to with an IVA? I can afford about £200-£250 pm.

Thank you

newman

[mikebdomain]

Hi newman and welcome to the forum

It may also be worth speaking to a mortgage broker to discuss your options regarding your secured finance.

What options will be open to you are obviously dependant on your personal circumstances, but you may be able to reduce your payments, this would dependant on your current interest rates, and/or switching to interest only for a short while.


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[Andrew Graveson]

A good point from Mike.

I'd imagine that the payments on the secured loan are significant?

As stated some people, dependent entirely on their circumstances, find that a restructure of their mortgage/secured loan affairs can make a big difference to them.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[newman]

Hello,

Thanks for the kind welcome and very useful advice.

I pay £720 with firstplus -secured loan(did not know it was variable interest, up from £660) and £380 with Abbey (mortgate), but this is fixed term for another one year(5.5%?)

I agree I could look remortgaging. putting both loan and mortgage together, but I have reduced income now.

Also my problem with my credit will now be ...less income more expenditure and I think I could get charged more interest, even though I pay regularly and have not missed any payments.

Also I don't have a problem paying my mortgage or secured loan, it is with the unsecured stuff. I am looking for a weekend job and perhaps to borrow some money from family.It is more time that I need.

If I was successful with an IVA this would restrict me from borrowing more money and give me more time, hopefully to get a better job.

I don't know if I have any other options

Regards

newman.

[Andrew Graveson]

Hi Newman,

I wouldn't advise that you put your separate debts in boxes whereby your secured loan and mortgage are OK but your unsecured debts are not.

They all form part of your current financial situation.

I think you should investigate financial restructure if only to discount it as an option if it does not help you to achieve your objectives.

An IVA is a debt solution to consider if less radical options are not open to you.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

To the mortgage brokers

Surely there is not sufficient equity in the property to enable a mortgage to consolidate the secured creditors at this moment?

An IVA could work with payments of £250 per month, but you will need to take specialist advice on this.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Andrew Graveson]

Hi Melanie,

I think we were posting at the same time.

As Newman does not appear to have any negative credit history and all payments are up to date there could be a wide variety of options open.

As always with mortgages any options would be dependent on the exact personal circumstances involved.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

But that would mean LTV of 93%. I know you are good, but you are not a magician! Or do you know something that I don't?

If this is the case, and lower payments could be found by consolidating the secured lending, then this could well open up other options for Newman.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Andrew Graveson]

I am no magician and do not know Newman's personal circumstances.

The "credit crunch" has had an impact on sub-prime mortgages but if Newman is up to date on his unsecured debts and mortgages then the market might look very different.

Affordability is of key importance.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[bagpuss]

would it be a good idea to sort the remortgage out (and secured loan) now while her credit is good rather than later...even it it MAY mean early redemption charges...surely those would outway higher interest rates over the years that may be the case if she/he waits...?



Angie xx


My IVA Story......http://bagpuss.blogs.iva.co.uk/2007/09/ ... iva-story/

[Andrew Graveson]

Hi Angie,

No way of knowing without investigating the situation further (and in detail); but your point is strong.

Redemption charges have to be taken into account. They can be significant but as you point out there can be a cost attached to not acting.

There is certainly a very good argument for at least opening up the options while credit ratings are strong.

Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[mikebdomain]

Melanie,

93%? One never knows until the credit search, valuation & redemption figures are in…

I was thinking originally of newman talking to a broker who will carry out a full fact find and investigate all possible avenues of reducing his secured commitments. The advice after full discussion may have been;

- to approach his existing first charge lender to switch to interest only,

- to approach his first charge lender for a further advance, enough to cover the second charge and reduce his monthly payments,

- to remortgage and raise enough to cover both first charge and second charge ERCs and LTV allowing.

If none of the above was possible, nor was there any further options due to LTV and / or ERCs’ and / or affordability issues then obviously, it’s time to seriously consider other options.

But without all the details, it’s impossible to say…


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Whole of Market Mortgage Broker & Mortgage packager
Specialising in adverse credit.

Directly Authorised Firm FSA No:313790

CeMAP 1,2 & 3 qualified
F.P.C 1,2 & 3 qualified
Financial Planning Certificate
Certificate in Regulated Customer Care
Certificate in Regulated General Insurance
Associate of the Charted Insurance Institute

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[Welsh Boy]

Newman

Some good points are raised here, firstly I would contact your existing lender as Mike says and explain the situation to them, Abbey are a good lender and if you have a 5.5% rate of interest with them I would presume there will be penalties to move away from them and with the loan to value being so tight this assumed penalty would have an impact, 5.5% is very competitive so worth pursuing trying to get Abbey to take on all the borrowing thus also removing the need to pay broker fees which would also have to be factored in. The brokers who post here along with numerous other brokers up and down the country would be more than willing to explain the situation to you but personally Abbey would be my first port of call, conversion to interest only in the interim is also worth a consideration (can`t remember if anyone has mentioned this already). Hope this helps .Tony

F.P.C. 1,2,3 Qualified
Financial Planning Certificate
CeMap Qualified
Whole of Market Mortgage Broker
Managing Director : Debt Advisory Bureau
Principal : All Mortgage Products

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