New member!

[dougie_wh]

Hi Guys

Have been quietly reading the posts and now time to post myself!

I am in the process of looking at an IVA - I think its time to bite the bullet and get things sorted.

My debt is as follows:

Northern Rock Mortgage 100k
Northern rock unsecured loan 18k
Picture Secured loan £15k

Barclaycard £9k
Morgan Stanley £4k
Tesco £4k
Amex £5k
Nationwide 15k
Student Loan 4k
Overdraft with Barclays £3k
Citi Financial Loan £5k
Total Unsecured; £49k

I just feel trapped and have even resorted to gambling online to try and sort it; needless to say this hasn't!

So Money,debt and credit are preparing one for me.

I have a few concerns, 1) I took out the loan with Citi and the tesco card a month or so ago to keep me moving; will this effect the IVA.

The tesco card and the nationwide loan are in my name but at my parents address; again will this effect the iva and also my parents?

I have been reasurred by my rep that it won't.

It has been nice reading peoples posts and see i'm not alone. It's horrible though as I come from a good background just my spening and avaliable credit is out of control - I know I spent it all but can't understand how someone of 24 can aquire so much credit!

What are peoples thoughts on my situation - I clear around 2k a month and my iva is looking at £325; they want the total debt with N.R to be secured against the house making the house have 133k of debt against it - it is worth around £95k so presumeabally I will be stuck there for a long time?

Look forward to hearing from you guys,

James

[kitty]

Hi James and welcome,
You've done the right thing posting on here, can't offer advice on your situation, but somebody will soon.
Good luck!
Kitty x

[size5]

Number of things here.
Does the Citi loan include interest or is the £5k just what you were advanced before any interest? (The address change should not be an issue though)
I also have to ask have you considered bankruptcy as an option?

[dougie_wh]

Thats' a good point; the loan was for 5k, have made two payments so far. Presumabally tho the settlement at this point won't be 5k will it? Closer to 8k incuding interest???

[size5]

Probably, maybe even higher.

The reason I asked was that, whilst I don't know what MD and C would charge in fees, the dividend on the scenario you painted looks tight. If any of your debts are larger than you have estimated, and if truth be known that is an extremely common scenario, then it may make a significant difference, meaning that you may not be able to look at a VA at all or else find more money to fund it with.
I would try and speak with your provider directly and run over again what all your options are and all the possible scenarios.

[jpj]

I would seriously look at bankcuptcy!! It is a quicker option and with a house worth 95K and secured loans of £133k how are you ever going to claw your way out of the 40k negative equity?? this figure could rise to -50K if house prices fall!! Sounds like your storing up future trouble keeping the hose.
It also says in the paper today Northern rock are looking at putting its mortgage rates up!!

[ianmillington]

Hi

Citi and Tesco may feel a bit upset about how recent the debt is. However, the bigger issue as identified by JPJ is the house. I hate to say it but I too don't see how you are going to get out of the negative equity trap that you are in. I can imagine that the payments you are making on your mortgage and secured loan will be very significant, so much so that they will be detrimental to the prospects of acceptance of your IVA proposal should you make one.

I think that a sale of the property (or giving it back to Northern Rock) might be your best option and you should consider it at least.

As regards Bankruptcy - it won't discharge your student loan. Also, what do you do for a living?

[dougie_wh]

Thanks guys. I am a car salesman, basic 18.5k, comission of around 1500 per month on a good month.

Trouble is as with any sales trades can change; I am lucky I have good job security and a big basic.

When you say 'give the house back' is this possible? Plus what about the 2nd charge on the house with Picture Finance?

I can't see any easy way out of this and know whatever route I take won't be easy.

My mortgage with NR is fixed for another 5 years though - ties in when the IVA would finish if accepted....Lot of neg eg though.

[MelanieGiles]

If you are in negative equity with your 2nd charge, this will rank as an unsecured claim in any subsequent insolvency, but only to the extent that you cease making the payments to the loan.

I feel that you now need to discuss matters directly with an insolvency practitioner who will take time to analyse your difficulties and provide advice on the range of options there are undoubtedly available to you.

Once word of warning as a car salesman - if you are responsible for assisting with arranging car finance for your customers you may be prevented from doing this under bankrutpcy proceedings.

[Adam Davies]

Hi Dougie
Have you parted with any money to Money Debt and Credit?
Have NR started securing their debt and have you looked at the terms and conditions of your employment regarding banktuptcy ?
Regards

[ianmillington]

Yes, I agree with Melanie.

You need to thrash out all the issues with an IP before embarking down any particular path. As you may be signing contracts as agent for a finance company a bankruptcy might well cause a problem.

When I said "give the house back" I mean asking NR whether they will take possession of it. NR as first charge-holder will override the Picture Loan which, according to your figures, will then be unsecured.

ian