I need some urgent advice please and hope that somebody can help me. It's quite a complicated issue but something that could lose us our home and as we have 2 small children we really need to know where we stand at the moment. The stress is getting unbearable and we can't seem to find anybody to help.
We are currently in an IVA (just over a year into it) but we have a family member with a secured loan on our house. There is about 70k equity left in the house and this is tied into the IVA which will be reviewed at the end.
We helped our son out a few years back with the purchase of his business. He took out a secured loan on our house and other family's property. He has since paid this loan in full and they are now asking for the full amount of interest for the 5 year term (over the past 4 years he has already paid approx £73k on a £210k loan and they still want another £30k + interest! This remaining interest is still secured on our house.
His business is now struggling with the times that we are in and he is finding it hard to meet the monthly payments of £1,300. The loan company are quite aggressive and already have possession orders on our property.
If he defaults on this remaining amount of interest, can the loan company take our house even though it is tied up in our own IVA?
I'm sorry to post such a complicated issue but I don't know where to turn now
Thanks for listening and any help would be very much appreciated.
One of the professional experts will be along to give advice as I don't know the answer, but it may be a little time before then. Just didn't want you to think you were being ignored.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Tally, I've just deleted your other post as it is a duplicate one of this one.
Hang in there, the professionals will be on, they must be busy at the moment.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Would need to understand the terms of your son's loan and see the documentation he signed. You mention he has paid this off in full but that the loan company is claiming further interest. When he took out the loan was it for a specified period and with penalties if paid back early?
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
I am slightly confused by your post - but understand that you agreed to take out a secured loan to provide your son with funding to purchase his business. And that he has repaid the capital element of the loan but not the interest? And he is struggling to meet the repayments.
The legal position is that you are responsible for the loan, regardless of the purpose it was taken out for, and if your son cannot continue to meet the contractual repayments, and they fall more than three months into arrears, then this gives the secured lender the right to commence repossession proceedings against the property.
I assume that this loan was in place when you entered into the IVA, so how was this treated in terms of your son's loan repayments and the actual payment to the secured lender? How did your IP anticipate that this would affect your ability to comply with any final year equity release?
Sorry if I've not made the situation clear.. it's quite a confusing situation that we have struggled to get advice on.
My son and his wife took out the secured loan (over 5 years) the loan was for £175k and they have paid £35k in interest on settlement. Previously they had other loans with the same company and settled those early with total interest of £38k paid. On the latest loan of £175k, they only had the loan for 16 months (out of the 5 year term) and paid £35k interest. The loan company are charging an additional £35k interest which is still secured on our house.
The loan is in the name of my son and his wife under a partnership which is about to be made bankrupt.
My husband and I are in an IVA which is tied into the valuation of our house at the end of the 5 years.
However, we are now in a situation whereby if my son defaults on the monthly payments, this loan company is threatening possession of our home.
The loan was in place when we entered into the IVA and our IP is aware of the secured loan that is against the equity on our house.
We are at the end of our tether really and don't know what to do here so any advice is much appreciated
I think that you need to seek legal advice as to the loan company's right to charge the interest they claim is due. As you say the situation is complex, and we cannot give detailed advice about specific issues like this correctly.
Very complex issues and whether the loan company can charge these amounts of interest on early settlement of loan. You must seek legal advice as soon as possible taking to the solicitor all documentation. Good luck.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Don't forget that with a lot of solicitors you can get your initial consultation free.
Let us know how you get on.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
