help me please as I am absolutely desperate

[lee.j]

Hi,
I wonder if you could help me please as I am absolutely desperate. Almost 2 years ago, I went on a DMP ieth Payplan as I owed £14,000 in credit card debts. I had another credit card with about £500 on it but kept this back in case of emergencies and, as it happended I did need this for an emergency.

I have been paying £190.00 per month to Payplan and the debt has reduced to just over £11,00 but I also now have an additional £8,000 debt through no direct fault of my own and I am worried sick It has made me very ill over the past year and I really need to sort the sitauation once and for all. I have been trying to contact Payplan for the past 2 days but they seem to be very busy, hence my enquiry to yourself

I would like to consider the following but not sure if I can, or if it is allowed:
1. Take out a second mortgage to release £15,000, pay off the new debt of £8,000 and offer a final but reduced sum of money to the initial creditors. This way, I can pay off all debts and clear my name and make a new start. In October this year I am getting married and my fiancee does not know of the situation and I want to shield her from all of this. I have a house in my name worth approx £125,000 and a £78,000 mortgage. Although a remortgage will mean higher interest rates, in a few years I could swap to a normal rate with a cleared name.

I am at my wits end - please can you help.

Thank you
Lee

[freelili]

Hello Lee and welcome

firstly I am not a technical expert, just another person dealing with debt, responding out of empathy for your desperation.

Youre not techinically insolvent so therefore an IVA or bankruptcy would not be an option. You could release equity and pay off your debts once and for all. I think I am right in saying that reduced lump sum would be more attractive to your creditors, than being 'drip fed' in a DMP which could also be enduring for yourself, if the dividend is higher than in bamkruptcy. You must be able to afford the increased monthly mortgage payments though. I am sure one of the technical experts will be along soon to give you better financial advice. Please dont worry, I am sure there will be an answer and a way forward for you. I would cut those cards up right now....all of them and not hold anything back. I am sure you are already on the road to freedom, just by posting here.

Good luck and please keep posting

LILY

I asked God for a solution and have to live with his reply.

[MelanieGiles]

Lee

You can afford to pay all of your debts off in full by remortgaging your property, as Lily says. The cost of borrowing that money is likely to be far less than you are paying into your DMP - and as your debts have only reduced by £3,000 in two years, this seems to be a far better option.

You ought to be able to mortgage up to 90% loan to value, so as long as you can afford increased mortgage payments I would seriously consider this option to avoid further worry.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[lee.j]

Thanks for the advice.
I am seriously considering remortgaging but not sure if I should contact my current building society or another mortgage lender. If I contact my current provider, will they ask questions about my debts and open a whole can of worms? An external provider may ask fewer questions although they are likely to cost a lot more and, either could refuse anyway. I could get a remortgage for most of the amount of debt and at least clear some or most of the debt. I am feeling very lost but will endeavour to find the right solution.

[freelili]

Lee keep posting

I would advise that you clear all the debt, I dont know if Welsh boy can help you here. I am sorry I really dont know the answer to your questions. I would imagine that if you can demonstrate the ability to repay, its money in the bank for them. Many people consolidate debt with a re-mortgage dont they? Wipe the slate clean lee, cut the cards up and enjoy the rest of your life. These cards are a road to hell.

good luck

LILY

I asked God for a solution and have to live with his reply.

[gimmewine]

I was in the same situation as you 18 months ago, 25k of unsecured debt but 70k equity in the property so an IVA was not an option. My salary level only allowed me to add 18k to the mortgage and I had to find the other 7k privately as it was a condition of the remortgage that I paid off all my creditors. Luckily, some of my friends were able to help me out with that.

The organisation I used was a company called who's lending. I was referred to them by my union and I don't know if they work exclusively for the union but I found them extremely helpful. They did not charge me fees for their work and advised me on dmp and remortgage options. The only thing I had to pay was a valuation fee of £138. The solicitors fees were added to the mortgage so I did not have to find them upfront either. As Melanie said, it is an option well worth considering. At the end of the exercise I ended up with a mortgage discounted for two years so I only paid £42 a month more than my previous mortgage and although the payments are due to go up in November, the tie in period is only two years after which I have a small early redemption fee of £200, so I can look for a new deal with better interest rates.

I remember the feeling of my world falling to bits, not knowing which way to turn. All I can say is, hang in there, get some advice on all the options open to you, then decide. Whatever you do though, cut up those cards so you cannot be tempted again.

Good Luck
Ann

[lee.j]

Thanks,
That is just what I need to hear. I have been introduced to the name Who's Lending because they are a sister company of the DMP Management firm (Payplan) with whom I am curently with. Payplan have just called to say they will refer me so they will pass on my details and to expect a call from Who's Lending in the next 7 days. Finally I could be getting there. It is also good to hear that I can change providers to a 'proper rate in a couple of years. When this is all over I want to help others to NOT get into the same sticky situation.

One more question: I don't want my partner to find out about the recent past. This is not to say I am trying to keep secrets, more to hide what will definitely hurt her and destroy us both. I want to sort out my own problems and move on As the house is in my name and I pay the mortgage, I think this is the best option. She would otherwise become far too stressed, anxious etc and I won't put her through that. I have to be responsible for my own actions, sort them and move forward. Does this make sense?

[Skippy]

Hi Lee, yes, it does make sense that you want to protect your partner, but have you thought that she might be more hurt that you couldn't share this with her? I'm sure she would be supportive if she knew. By telling her (even if you wait until the remortgage has been sorted out) you won't be carrying secrets into your marriage. I know I would rather know if my partner was struggling with something like this.

Onwards and upwards!!!

[freelili]

Only you know what the real answer to this Lee, as you are so stressed at the moment it might be an idea to take this worry out of the equation until you have a handle on it all yourself.

However, my own belief is that if someone I loved was suffering stress and had made a mistake I would want to know and would want to help. OK, so I may feel that my security is being undermined somehow and some 'can I really trust this person?' issue's might be stirred. That said, by being honest with her now, she will know that she can trust you and as for the mistake, we all make them, right? Even when we have already been warned. You are about to start on a brand new life together and there will be ups and downs, its how you both deal with them that counts.

Good luck and keep posting

LILY

I asked God for a solution and have to live with his reply.

[lee.j]

Yes, I understand and it is a dilemma but many years ago she was left in the lurch by her father who went bankrupt, sold off everyhing that the family owned (including her personal stuff) and subsequently disappeared. She now has the opinion that debt is the end of the world and not something that can be overcome.

She is very caring and I know she would not want me to suffer, as I have for a long time, but she does not understand how and why people become involved in debt. She will worry and become mre stressed than I am and I tend to take on the world on my own back to relive others of stress. I wish things were different but I really need to sort his and move forward in a positive manner and keep loved ones away from knowing. If I can't get help, I will have to declare all but, at that point, I feel I will have pretty much lost everythng anyway. I am nearly thre.

[freelili]

Hey Lee

As I said you are the best person to answer the question,you are on the inside, I am not. You are protecting and thats the difference. You have not lost everything and will move on from this. I wish you the best of luck and keep posting.

Dont beat yourself up anymore, youre being a little hard on yourself.



LILY

I asked God for a solution and have to live with his reply.

[Skippy]

Lee, I hope you didn't think I was poking my nose in and trying to tell you what to do. As Lily says, only you can make the decision, and I wish you well whatever you do. And please don't think you have lost everything - you still have your future.

Good luck x

Onwards and upwards!!!

[jamesfalla]

Lee

At 90% loan to value, you should certainly be able to release £25-£30k from your house and pay off all your debt in full.

I suggest that you speak to your current lender and a 3rd party broker. Unfortunately as you have been in a Debt Management Plan, you will need an adverse mortgage so your current lender may not be able to help.

Let us know how you get on and if you need more help identifying a broker I am sure someone using this forum will be able to recommend someone

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk