outgoings are more than our incomes by huge amount

[lucyfr]

our outgoings are more than our incomes by a huge amount. I phoned the cccs who just said to ask our creditors to accept £1 a month but I don't know how that works? What if they say no? We just don't have any money - the mortgage is interest only and we don't have any equity. I don't know what to do.

[MAY2006]

If your outgoings are more than income then you are basically insolvent.
I would contact your local Citizens Advice Debt Management, rather than CCCS as they tend to recommend debt management programmes which do not protect you legally from your creditors or freeze interest.
If you are insolvent and are working then an IVA may be the best option for you.
Please take advise as soon as you can.

[freelili]

Hello Lucy

Could you work out what you need to pay to your priority debts? ie mortgage, food, utilities etc. Do not include your loans/credit/store cards/catalogue etc. What you have left is your disposable income.

How much do you have? How much do you owe? There is rough correlation between what you owe/disposible income that may make IVA a possible route for you. It also depends on the amount and type of creditors you have. Do not panic, there will be a solution somewhere.

Please post back and I am sure one of the experts will help you



LILY

[finebridge]

Hi Lucy

Freelili is right - there will be a solution somewhere.

As well as the information freelili mentioned, can you advise the estimated value of your house and the outstanding mortgage? Is this owned in joint names with your partner?

Kind regards,
Brian Baker

Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[lucyfr]

thank you for your replies but i really think it's hopeless.

income = 2850

mortgage - 1415
childminder - 1050
debt repayment 700 per month spread over 10 creditors
ctax 120
gas elec 80
food £200 (2 adults 2 children)
water 42.77
insurance - 50
car (will be sent back - am sorting that out now) £238.00

moved in october and was made redundant in december - have found a new job with lower salary. Mortgage is interest only and we have no equity.

I don't know what to do

[freelili]

Hi Lucy

I am not sure if you only owe 700 or are trying to pay 700 per month to creditors. I am not an expert but I really think that your only option is bankruptcy (I know this sounds terrifying) and I am sorry, I know how I felt when the B word was mentioned to me. You have to do something about this situation though, it is not going to get any better, or is it? If I have misunderstood your figures I am sorry and hopefully someone on the other side (EXPERTS) will come back and help you some more.

In the meantime check out this site.
www.myvesta.org.uk
They give very good advice conerning BR and you can talk to them online.

Good Luck lucy, come back, you get good advice, support and can have a rant if you need to. Someone else will be in the same situation as yourself.

LILY

[finebridge]

Lucy

The redundancy has certainly hit you hard given your mortgage and childminding commitments. Without knowing your circumstances any better I offer the following areas for discussion; some may not be feasible:

- downsizing your property to reduce mortgage commitment;
- selling and then renting to reduce housing cost;
- bankruptcy. No equity, therefore maybe little to lose;
- nominal payments to creditors to buy time;
- a mortgage break; again to buy time not as a solution.

Any comments/other suggestions anybody as to how we can help Lucy?

Brian Baker


Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[lucyfr]

Hi

thanks for your advice - would we definately lose the house if I went bankrupt? As we have two very young children would that be taken into account?

Thank you for your help

[finebridge]

If, as you say, there is no equity in the property, it is unlikely the Trustee would actively look to repossess it. After paying off the mortgage and accounting for legal costs there may be nothing left for creditors, so it would not be cost effective for the Trustee to take this line.

If there is a nominal amount of equity, the Trustee would ask your partner if he was able to purchase the Trustee's interest. This saves time, costs and gets something into the bankruptcy estate.

With regards the children, best practice dictates that you have twelve months to sort things out after bankruptcy before the property would be sold; if that is the route the Trustee takes of course.

Kind regards
Brian

Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[lucyfr]

Thank you for your help - I really am very grateful