await your advice

[alia]

Help! Need some advice please...

My husband and i are approx 73000 in debt. We have always paid our repayments in fact we have never missed one but lately they may have been not quite always on time (but they do get them!) I had a second child in June and unfortunatly could not afford to go back to work because of child care costs for 2 children out weighing the part time job i had.

We are now seriously struggling to keep on top of things and are robbing peter to pay paul! My husband is self employed and earns approx £4000 per month on a good month! Its not always a much as this. Our debts to cards and loans are £1600 per month + mortgage of £1300. Then there is council tax, insurances, rates, food, nappies, petrol etc.... as you can see we are just about surviving!

We are seriously thinking of selling our home and have had it valued and we have about £70,000 equity in the house. What i am worried about is not then having a home thereafter? Is there any way you can still keep back a 5% deposit, share the rest of the profit around the creditors to reduce the amounts owed then enter into an agreement with them for the next 5 years to continue to reduce the debt?

Thought it was worth an ask await your advice

[MelanieGiles]

Hi there and welcome to the forum

From your posting, it appears to me that you are not insolvent but just struggling to meet debt repayments. Selling the house may well be a sensible option, but how much would you need to buy a new property? You would need to work out your finances carefully before giving up your home.

have you thought about remortgageing to raise a lump sum to substantially reduce your debts?

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 alia,

As your unsecured debts are at a similar level to your equity an IVA may not be for you as you might not be technically insolvent.

If you were to sell and pay back a good proportion of your debts (while keeping enough for a deposit for a new home) would your monthly income cover your new mortgage, expenses, and reduced debt repayments?

If you were to remortgage to release equity and pay off a good proportion of your debts would your monthly income cover your new mortgage, expenses, and reduced debt repayments?

Sounds to me that you might benefit more from good financial/mortgage advice at this time rather than insolvency (IVA or bankruptcy) advice.


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

[mikebdomain]

Hi alia and welcome to the forum

Based on the information you have provided, It certainly sounds to me as though most of your problems could be sorted with a little re-juggling.

Selling and downsizing may be your best option, if you are able to achieve a fairly quick sale and not run more debts in the meanwhile. A remortgage may be difficult due to affordability issues, as you are still paying your unsecured debt, it will be included in most affordability calculations.

You seriously need to speak to a broker who will carry out an depth fact find and who will carry out a credit search to confirm your current financial commitments. They will be able to best advise you on what products you could obtain and / or whether it would be better to consider selling.


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[alia]

thank you for your replys.

I guess remortgaging is an option. We owe 220k and its been valued at 295k. How does it work do you need to leave 5% so you remorgage at 95%? does that mean i can release funds up to 280k if accepted? I could leave one loan in place for £183 per month. Does anyone know roughly how much a mortgage of 280k would be interest only over 30 years? perhaps i may be be £750 per month better off? My prob is getting the remortgage with all these debts to put down it doesnt look good does it!

Selling may well have to be our option then. Would want to keep back 10k so i new we wouldnt end up homeless!

thanks again

Ali

[mikebdomain]

When you are looking at consolidation there is a lot to consider, like; what is your current rate? Can you get a similar or lower rate? Are you delaying the inevitable? Are you currently on Interest Only or repayment? Are you currently tied in? (Fixed rate) Etc.

As far as the amount of equity that can be released will be dependant on your current credit profile, you did mention you were late on some payments, robbing peter to pay paul what effect has this had on your profile.

And your income.
You did mention that your husband earns up to 4k per month is this net or gross? As he is self employed what is the net profit shown, at the end of the year.

Further more would it be possible to negotiate with some or all of your unsecured creditors to reduce your monthly payment, by maybe freezing interest or extending terms etc.

As you can see there is an awful lot involved and it is difficult to deal with everything in a public forum – you need to speak to an advisor and obtain some advice after an in depth fact find.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker & Mortgage packager
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

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