I'm scared of loosing my home

[lukasz]

Hello
I have together mortgage with Northernrock
for 96 thousand where 76 is secured element
the remainder is unsecured. Our house is worth about 85k, joinlty owned , jointly mortgaged although it goes out from my own wage only as wife only gets £400 a month.
I've incurred 30k worth of debt. Now the question is , can I ask NR to convert the unsecured debt to secured loan by charging order in order to get the whole 96k secured and then after file for BR as it would be negative equity? I do not want to go IVA route as it would mean paying about £300 a month where our budget is really tight and we have about £100 disposable income left after expenditure in the real life. We do not have cars or any valuable assets and live really tight life at present - I work shifts 7am-7pm so nursery fee is horrendous - £800 and more on average plus mortgage £700 and fine £55 and household food £400 and others such as CTF £100 for my daughter , pension plans £100(I'm a contractor).
I have incurred 16k wtih one creditor after a HP agreement - gave up the car but still they calculated 16k interest! and another one for £7k -incurred same way after HP - car forfeit for lack of tax, and smaller loand 2k and 2k plus local council rent account for prev address £1200.
I do not feel paying back 30k for something I don't have and it is purely ridiculous interest charges so hence my BR considerations. I do feel obliged for the rent account but have to deal with all creditors in the same manner unfortunately - the genuine ones and loan sharks. If I went IVA route we wouldn't ever be able to save up any money - my wife wouldn't be able to afford college course to get a better job , no holidays nothing for 5 years which is out of the question - unless our marriage breaks down whcih obviously I'm fighting not to let happen. I understand I have well paid job but it is contracting - may end with 2 week notice anytime when the tasks are done and then I'd fall out of IVA as it is really hard to get such job in this area and realistically "normal" companies would be prepared to hire me for up to £1200 a month.
The debt is purely in my own name, so if i managed to save up for BR costs and then get my wife to buy my beneficial interest it'd be the best possible solution in my mind but it this do-able?
I've heard that if I default on mortgage for more that 2 months NR would try to secure the remainder on the property themselves but then I'm scared of loosing my home.

[MelanieGiles]

Hi lucasz

Sorry no-one has been around to answer your query earlier. When the forum is busy, and there are lots of postings, sometimes the earlier ones can slip off the page before an expert gets to read them.

Why would you want to prefer Northern Rock over your other unsecured creditors if you are intent on applying for bankruptcy? Whilst Northern Rock would be no doubt delighted with you, the other creditors would be unlikely to receive anything under a subsequent bankruptcy. The principle of dealing with insolvent estates is that each creditor gets a fair share of your estate - in your case this is minimal and limited to equity before costs of realisation of about £11,000.

I can see that there would be some advantages for you in your suggestion, as you say you can afford to maintain the Northern Rock lending and this would effectively leave you with negative equity in the bankruptcy, thus probably securing your home from the actions of a Trustee, but as a licenced insolvency practitioner I have some difficulty in observing a deliberate preference. I am sure that others who post on the forum will have differing views!

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

[catullus]

Not me! It's why I didn't respond to the post!

[lukasz]

well the only reason such thoughts are in my head I have a family to support and make the house safe for them to live in. I honestly would just go IVA route because that is what consience tells me to do but then this would mean constant financial struggle for my family where they aren't to blame for my past, and here is another side to this story. My wife has been living miserable life as it stands with me , so finally when I managed to get bigger salary and have prospect to send her back to university in order to sort her life out - my debt comes into play.
and can't simply declare myself bankrupt as it stands because this would force a sale of the house and my wife would have to rent on her own which is impossible on £400/month. Sure there is support from government agencies for her in that case - but why my daughter has to suffer borken family simply because I made bad decision with credit in the past and got loan on ridiculous terms.
I know it would be a bit of a foul play to do that - give preference to one lender to the others.. I didn't want to sound as trying to cheat on creditors and get away with not having to realize my assets for them - that's not the case - it is to protect my vulnerable family.
If I understand right on my 2200 a month buget with over 2000 commitment at present to the bills and nursery and mortgage - which is 1000 behind - IVA wouldn;t be much of an option for me anyway.
But have a look yourselves
2200 salary

530 - mortgage (sec and unsecured bits) (need to increase that due to defaults)
96 C. Tax
800 - nursery (I work 7am 7pm hence the price)
50 - gas (card meter very expensive)
50 - electric (same again)
55 - bus ticket
55 - magistrates fine
36 - home insurance
300 - household food , clothing etc, child support costs
30 - meals at work (I can barely leave the office plus work nights)
60 - phone + internet ( I can't get that any cheaper - only calbe tv is an option and that's how much it works out even barely using the phone)
50 - CTF for my daughter (well I suppose IVA wouldn't like that)
50 - contingency

I have no assets , no car , no nights out , no TV , no luxuries
it is basically wake up , work , and sleep - copletly miserable life
I don't have anything set aside in case emergency - eg. dentist ,
travel.
I have two jobs to manage all this , but main income of 2000 comes from contract which may end anytime and realisticaly my wages would decrease immediately back to 1200 and then what?
My wife does voluntary work to learn english , and some part time job but does not contribute to the household because she saves her wages for my daughter's future and her own possible separation and I can't blame her.
There is very little left for me to offer creditors and BR seems unevitable with time - but first I need to save up for the costs - how long may that take with present level of savings??
I'm completly stressed thinking how is all ever going to be rezolved , worse - my wife is going mad and my child is now getting very nervous due to the atmosphere at home. It has been going for 2 years on and off now - I managed to decrease payments to the creditors - offered them £1 each for a moratorium period now - following CAB advice - but they mentioned to think about BR.
As you see I had rent arrears from the local authority - now that will prevent me to get emergency accomodation from them in case I did have to sale the house - and renting will bump the cost up to 700 a month roughly - again not an option?
Here you go - sad story as I am - paying for foolishness and wanting to get up to british standard of life too soon too fast.
Word of advice anyone?

[lukasz]

I will only mention that the creditors - well at least the 16k one has offered me reduction to even £3k and £2k respectively at times to force me to remortgage - I wanted to do this but with negative equity and that level of commitment that wasn't do able - so they got mad thinking on my salary I'm simply hiding extra income from them they went to court to sanction full 16k and 7k to the other creditor - so I presented the judge with this budget and I'm now awaiting the response. I know that they will be quite harsh in their assesment of the situation and possibly things like £300 a month for all the food and child's clothing (she is 2.5yo and grows evry month!) will seem too much? and perhaps 800 nursery may be questioned - but I have bills to show and really tried get better deals from evey single provider but well , life is tough sometimes

[lukasz]

Come to think about it , if I got rid of the phone and boradband completly and perhaps be able to raise little over £100 a month would IVA be an option then?
compared to the size of the debt spreading £100 among 5 creditors doesn't seem like a decent dividend does it? Even if I gave up contingency and started living on "razors edge" £150 still wouldn't keep them happy I suppose.
I have options for decent bonuses after 12 months can that be taken into account? Unfortunately that can not be treated as a guaranteed income as it is purely in my boss' lines to award such.
So for instance - agree £150 IVA , then every 12 months put extra one off big payment of say £1200 towards the creditors?
oh well , it is down to them in the end of the day , but wondering if you ever had similar cases agreed?

[Adam Davies]

Hi
Is there anyway that you could reduce the nursery costs of £800 per month[family?] as half of this could possibly be used to fund an IVA.You say that your wife earns £400 per month,would she consider giving up work so that you do not have to pay any nursery costs?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[lukasz]

No , she was sat alone at home for 2 years which is enough to drive anyone mental not to mention asking her to give up work again. Imagine she has no friends here , no family , not going out a lot , how is anyone ever going to bear such situation - so she finally managed to get part time work to go out and about - and there bang! my debt. I wouldn't dare to ask her to support me this way after all she has been through already , plus my daughter has to learn english , my wife will never teach her so the nursery is the only option.

It all really seems like bankruptcy to my mind. it would be the only way to protect my wife from effect of having no money at all and having to give up her social life and life in general too. On a good job after discharged I can bounce back quickly enough and save up in prospect. I'm qualified IT engineer so there is some work arround - perhaps not as good as this one but still
I don't care for credit rating - I've learned my lesson - won't ever need it, perhaps in years to come I will rebuild my history with some shy 90k mortgage for 8% or whatever to then change it to a better deal. With current budget I can not see Trustee giving extra payment order after bankrputcy as there is simply not enough for it
and such are the facts - this is really minimalist lifestyle - quite miserable in fact and bills speak for themselves. When my daughter grows up she will only cost more and more , perhaps the £800 nursery would be gone but then you'd need a car and the gap quickly closes in.

[MelanieGiles]

The problem for you with an IVA is that it will probably be rejected by Northern Rock in any case, and if you enter into a DMP then they will probably continue to pursue charging order action. The best thing does appear to be bankruptcy proceedings, where you would be allowed up to a year to make alternative living arrangements for your family.

Whilst I sympathise with your situation, the costs you are paying towards childcare in comparison with your income is enormous (is this for one child?) - and unfortunately it would be much cheaper for your wife to be a stay at home Mum rather than pursuing her education at the expense of your creditors. You really do need to decide on your priorities and then make a decision accordingly - but be aware of all of your creditors in doing so and not just one.

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

[Rainbow]

Hi are you getting child benefit and family tax credits? Just I don't see them listed in your expenses - Perhaps another way to reduce costs would be to employ an apprentice Child Minder? I know Nurseries are very expensive but have you also thought about maybe your wife working part time and attending play schools or child parent groups?

Good Luck
By the way Melanie good to see you back - Did you enjoy your holiday?

[MelanieGiles]

And if you have a spare room in your house that you would be willing to give up - an au pair would be much cheaper.

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

[lukasz]

Yeah , the cost is associated with me working shifts from 7am to 7pm and the extra hours are payable at enormous rates , plus due to me not having a car means the nursery has to be accessible en-route to and from work which makes things even more expensive (city centre)

We do not get tax credits or anything due to me exceeding 30k margin
per annum. I think my wife gets child benefit but that forms her 400 pounds she saves up. If she contributed that to the household perhaps it would be easy to get IVA , unfortunately she does not and she has clear view on that. Theoretically the court would see that £400 as household income no matter what she does with it , but again , she only has this job initially for 6 more months and then it finishes , she goes back to voluntary work full time to gain experience and english skills hoping for better in the future.
I don't see why she can not pursue her own bit of happiness if it is only me who is insolvent. I know this is mostly the case with debt in families - the innocent people get affected directly.
I agree it is seemed as she is saving at the expense of my creditors in a way but I feel morally obliged to protect her from all that , and her tiny bits of money she will be able to save up wouldn't form substancial revenue to the creditors - yes, sill it is better that nothing but at the cost of a broken life hers and my daughter's it is not worth it. 5 years it is hell of a long time during which she can turn her life arround , crucial 5 years , she can have 2nd baby , graduate or whatever - and after 5 years it would all be wasted and her dreams ruined. She is 31 already and has no more time to spare, one day everyone needs a bit of life not just struggle.
She came to UK with nothing and works really hard to achieve some goals , with no support from anywhere - her family far away
With lots of people in UK lesser things make their life unbearable for them with all the support so imagine this in comparison - asking her for more is simply immoral.
Life is not always black or white. I think the creditors realistically haven't incurred cost they chase me for - they have shown it by giving me ridiculous settlement from 16k to 2k etc. that only shows me that really I'm not so very wrong on the moral grounds.
if they all proposed real costs I've incurred - prolly 5k it would be probably all different - I could repay that from bonus payments within few years but 30k is beyond my scope and I have to give up.

Just rung NR to negotiate payments and they said begun charging order themselves due to my defaults - somehow I never got any correspondence about that.
I wanted to increase payments now but they are already on the case which leaves my position clear now in terms of their unsecured element. Trouble is now if I miss a payment or miss the increased payment to pay off the arrears they will be on my house immediately themselves. The only trouble is bankruptcy follows one about and will always stink even if I manage to get my home untouched. Plus Court can still order me to pay them for 3 years in line with their views on my budget - so chances are they will still get the proportion
back. So it still may mean my poor wife will have to reach out to her pocket if court decides my expenses are unreasonable.
I see now that you consider about £300-and more to be minimum for IVA and I simply won't stretch to that at present.

Well , than you all for your kind posts , I hope I don't pose as a ruthless b..rd who just wants to get off with not paying back which was probably the case after my first post which was somewhat silly.

Regards
Lucas

[MelanieGiles]

Lucas

You pose as a very caring husband, who just wants the best for his family, but unfortunatly you have to cut your cloth according to your means, and relying upon credit to enable you to do this is not the right way forward. There is no magical solution for you - just a re-ordering of priorities in which ever order you feel is the most appropriate.

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

[Skippy]

Lucas, you come across as a lovely caring man, and I wish you all the luck in the world, whichever path you take.

Would bankruptcy really be the end of the world for you? I live with my partner (we're not married) and since I went BR we are both better off. I don't have the pressure of my debts, I have enough money to be able to pay my way and he is better off as he is no longer having to support me. I do appreciate that you stand to lose your house, but wouldn't renting be better than having this weight permanently on your shoulders?

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[zoe]

Hi there
I agree with Skip on this one!!!
Z
x


Zoe
x
Keep your chin up - everything happens for a reason!
View my blog http://zoes.blogs.iva.co.uk/