what is my best route

[pdd]

I have unsecured debts of about £230,000 in a variety of credit cards and personal loans. I have recently taken a job with provides a house and small salary, which means that I can sell my house to release equity of about £80,000. The income that our household receives (including tax credits) gives us just enough to live on, with nothing extra for creditors (used the National Debtline guidelines) - what is my best route: should I seek a full and final settlement at around 35p/£ or use a lump sum IVA or is there another way. I assume that I must sell my house.

The new job only lasts about 3 years, so after that I will have nothing.

I would be grateful for any advice you can offer. Thanks

[Help-Is-Here]

You would be better ringing a company/IP and giving them all your details. ALthough we have a nice outline of your circumstances here we would need to know the ins & outs of your expenditure really before we could advise. I obviously do not expect you to put that on here so my advice would be to contact a reputable company and they would be able to tell you which is the better option for both you & the creditors.

Sorry I've not been much help on this one but good luck.

[Oliver]

Hello PDD

One option would be to sell your current home and offer a full and final settlement through an IVA. This way if accepted your debts will be legally written off.

After your 3 year contract is over you can rent or save to buy another house. I appreciate that at the moment your income only covers household bills and there is no overflow for rent but I am assuming that your income is low because it also includes accommodation.


Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[MelanieGiles]

Hi pdd

A full and final settlement would work out very nicely for you here, but you should explore all options by seeking proper, independent advice.

Any of the experts on the forum would be happy to help.

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

[pdd]

I have now sold my house and have a lump sum of about £77k for debt of now £240k (this has risen due to interest and charges only since February). Hence I have a gross amount of about 32p/£.

I wanted to get a second opinion on advice I have been given, as I have been told that things have changed recently with IVAs, particularly regarding the amount that will be accepted. It has been suggested that my wife should go bankrupt, as she has no assets and therefore will not be liable for any joint debt and a small amount of debt in her name. This would then give a greater amount for me to use with a full and final IVA (this would lift it to 33p/£ before fees). Only problem is that it was my decisions that have left us in this position, not her - so it seems grossly unfair that she ends up bankrupt and I (might??)end up getting off with an IVA. In this case would she be likely to be able to keep her car (worth about £1800)?

Any thoughts on whether this is likely to succeed and what the magnitude of IP's fees should be for this sort of IVA?

Thanks.

[MelanieGiles]

Hi pdd and welcome back!

Was your wife a joint owner of the property? If so, then her share of the equity will need to be used to satisfy them, leaving you with the balance to deal with your creditors.

Your proposal seems a good one, but obviously you will now need to take more detailed and specialist advice before proceeding.

I am sure that your wife will not have to sell her car in bankruptcy, so long as it is necessary for her to get to and from work.

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

[pdd]

Thanks Melanie.

The house was solely in my name. At present she doesn't have a job, but needs the car to ferry the kids about (we live in a semi-rural location, with very limited public transport).

What would the likelihood of an IVA suceeding at what will probably be about 29p/£ after IP's fees? (I don't have any debts with HSBC). Is it possibly better just to throw the towel in and both of us go bankrupt?

[MelanieGiles]

I think that your IVA will work perfectly well, and I would certainly not be thinking of bankruptcy proceedings when you have a good offer to make to creditors. Get the ball rolling as soon as possible to avoid ongoing interest diluting the monies.

Where are you going to be living - moving into rented accomodation. Be sure to ask your IP for an allowance for removal costs and future rental if this is appropriate. Your creditors may be prepared to allow this if your budget is reasonable.

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

[RedDevil]

Hi pdd,

I think Mel is right on this one. Most creditors like a quick return. If you have property try to release the equity by remortgage or sale. Obviously, you have done that. This shows that you are willing to pay your creditors something. My situation is similar but try to hang in there and don't give up the fight. You must try every option and remember B R is the last bus stop. Make sure your income and expenditure balance otherwise a full and final IVA may not be possible. If you have a substantial suplus then it will be money up front plus 5 years of payments. Grrrr.....[:(]

Best wishes

RedDevil

[pdd]

Thanks for the replies Melanie and RedDevil.

I have been reviewing the advice we have been given and would really rather that my wife didn't have to go bankrupt - is there any reason that a joint IVA wouldn't work (the dilution of the offer would be from 33p/£ to 32p/£ before fees, as she has only about £7k in her own name)?

[MelanieGiles]

I would not propose an IVA for someone with debts of only £7k. How long have you been married and why was the house just in your name? There may be an argument that your wife has gained a beneficial interest in the property, by nature of her financial contribution to it since she has been living there, which might warrant you giving her sufficient money from the sale proceeds to repay her debts in full.

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

[pdd]

We have been married for 19 years - I can't remember why I put the house in my name only - think that there was some cost savings at the time. My wife would be liable for £25k of debt if I default on the joint loans.

I have also just submitted an enquiry form requesting a quote for you to do the work Melanie, as I am concerned that the people we are working through have not discussed all possible solutions with us.

[MelanieGiles]

Hi again

I definately think that your wife has an interest in the property, and with the joint debts it definately looks like proposals for both of you are the right way forward.

I will look more specifically when I see your information.

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