Firstly, I hope Im posting the right place. Anyway, I found this website a few weeks ago and have been reading avidly since then. Truth be known, Ive been scouring the site quite desperately as I do believe Im in a very big hole right now. Can I apologise in advance for the rather rambly first post – I have a lot of unknowns in my mind and Im trying to find the courage to move forward. If I look at my situation then I can see it started many years ago so it’s a wonder that I seem to have gotten by for so many years with my head in the sand. That isnt actually entirely true as I now know that Ive managed by robbing Peter to pay Paul. When I was offered the loans and cards (many years ago), I had a good salary, costs of living were reasonable and I received a healthy maintenance payment for my daughter. As time has gone along, my maintenance payments have decreased, the cost of living has gone through the roof and I havent had a payrise for four years! As wrong as it may seem, when I stumbled upon this website I was delighted to know that I wasn’t the only person in this situation. I was starting to feel like a failure because everybody else could pay their bills so why couldn’t I? In comparison to most, I earn a decent salary and I have no idea where my money goes as I don’t have a flashy car, exotic holidays or all the latest gadgets. I go out to socialise maybe three times a year - this is mostly because I seem to be constantly depressed about my financial situation and so I just stay at home living in my own little ignorant world. I do now acknowledge that I have a major problem that I need to address so thought if I post my details I may get some feedback as to what may happen to me. Before I stumbled upon this website, I believe one of the reasons I refused to accept I had a problem is because I seriously thought I could be imprisoned for having accumulated so much debt that I couldnt repay. Ive read enough posts to know that the best advice is to call several IP’s and chat through my situation but for some reason Im still feeling too scared to speak to anyone as I fear the advice may cause me to lose my home and I don’t seem able to accept this as although Ive accumulated huge debts, Ive worked so hard to try to keep my head above water. My low rate credit card deals are soon to end and I have no further credit available to ‘juggle’ with so soon Im going to hit the really high monthly pay outs which I just cant service.
Im sure we all feel our situations are complex but this is how things are for me:
Main residential property Value is £155,000
Mortgage with TMB is £120,500 20 years remaining £580 per month
Second Charge with First Plus £64,000 20 years remaining £560 per month
Unsecured Together Loan Northern Rock £20,000 20 years remaining £188 per month
Northern Rock personal loan £5,000 7 years remaining £55 per month
Abbey MBNA credit card £9,000 £25 per month
MBNA credit card £10,000 £125 per month
Egg credit card £10,000 £230 per month
Sainsburys credit card £5,000 £130 per month
MINT credit card £8,000 £130 per month
Abbey personal loan £12,000 7 years remaining £196 per month
Abbey overdraft £1,500 £0 per month
Black Horse (HP for sofa)£500 18 months remaining £28 per month
TOTAL UNSECURED £81,000 costing £1,082 per month
I was also overpaid tax credits for many years for which its claimed I owe £7,000. Repayment of this is in hand as Im entitled to claim £530 per year but don’t get paid anything until the overpayment has been cleared.
Just to complicate matters I own a second property that I let out. This was my former matrimonial home but I had to remortgage it to pay off ex and its now in negative equity so impossible to sell, also, its not worth selling as its currently providing me with additional income.
Buy to let property Value is £160,00
Mortgage £175,500 £440 per month
Monthly rental income is £700
There are lots of twists and turns to my story but recently Ive lost £130 a month from the CSA. I was receiving £300 but its now £170.
My current unsecured debts are costing £1,100 a month to service. Im only paying £25 a month on one MBNA card and £125 on another as Ive got deals that expire in March and June when payments will soar to over £200 a month for each.
Employment-wise things are complicated. The company I work for has recently down-sized and Ive been offered an additional monthly sum of £600 net to work from home (this is additional to my current take home pay of £1,885 per month). This additional £600 needs to be used to cover the costs of running a home office (phone, broadband, additional gas/electric as I’ll be home all day, postage, stationary, travel costs etc.) plus an element to cover the costs of ‘renting’ my spare bedroom to enable me to use it as an office. Although I’ll be working from home, the nature of the business means I have to visit an off-site secure storage facility every day to physically deposit back-up data. Ive calculated that I will have a surplus of £200 from this once all bills have been paid which is what I will, in effect, be paying myself as rental for the bedroom usage. Unfortunately, this new arrangement does not start until 1st May 2010 (at the latest) so I feel Im unable to proceed to talk about an IVA until maybe Im in receipt of that money. I do have a formal letter from my employer setting out the additional payment I will receive but it does not specify a date as this has not yet been agreed. Based on my income without this additional £600 per month then I think bankruptcy would be my only option, however, my employer has already specified that I cannot run the business from home as a bankrupt as our auditors would find this wholly unacceptable.
All in all I believe that I will have about £400 a month to pay into an IVA. Having read posts regarding NR, I can see that any IVA proposal I may be in a position to make will be for 72 months owing to the remaining term of my loans with them.
The reason Im dithering in approaching an IP is because Ive used my credit cards quite a lot in the last month or so. My boiler (only 4 years old) melted itself to pieces during the cold spell and cost me £300 to repair. I felt I could never afford the servicing costs so didn’t bother but can now see this was a false economy. The real dent in the cards recently was me trying to dig myself out of a hole but, as it happens, it seems all Ive done is make my hole bigger! The tenants in my rental property were asked to leave after five years because they were not looking after the property. It needed redecorating from top to bottom to bring it up to a standard acceptable to other prospective tenants. Even though I undertook most of the work myself, the materials and new carpets set me back a few thousand pounds which was all paid for on a credit card. The good news is that I now get an extra £200 a month in rent and so in the long-term I had to spend the money to enable the rent to rise. As I say, Im unable to sell the property as its in negative equity.
What has really bought matters to a head is that I have an 8 year old sporty type car (not old compared to most) and in the last six months it has cost me a fortune to tax, mot and service and I wont be able to afford it when its due again. For the MOT it required new tyres which cost £300 and I was advised that the brakes et al will definitely need replacing for its next MOT (due in September 2010). I feel that the car has a sense that I no longer have credit and in the last few weeks anything that could break has done so. Im currently ignoring the very rough sounding exhaust as I know I cant keep spending money on it. My big concern is that it is not going to get me through the next six years if I am able to have an IVA. What do I do? Would it be considered fraud if I purposely bought a new car on HP when I already couldn’t afford the debt I have. Like so many of you, I don’t currently have any missed payments and I may be able to get through the next three months by switching and changing but what do I do?
After this complete ramble of desperation, I guess what I want to know is;
Am I eligible for an IVA if I own two properties?
Will I be made to sell the 2nd property even though its in negative equity as Ive just signed a years contract with new tenants?
Will I be refused an IVA on the basis that Ive spent heavily on my credit cards in recent months?
Should I purchase a new car on HP now or is this fraud as the last thing I want to do is break the law but I need a reliable car for work?
Will I have to tell my employer? I work in finance although the company is not regulated and I have no responsibility for any money at any time, however, I can view the bank account to assess whether funds have been received.
I know this one sounds pathetic but will my sofa purchased on HP have to be removed? It cost £1,400 and I now owe £500?
I probably have a million questions but this is just the beginning. I feel highly embarrassed as nobody else spent the money. I seem to want to continue living life in my little bubble but the credit lines are drying up and Im now aware that very shortly my bubble is going to burst. I just cant stand the thought that through my inability to earn sufficient funds to keep my daughter in her own home that we may lose the home.
Many thanks.
