Hello Sotonicuk
It would be helpful to know a little bit more about your circumstances. Are you insolvent? This would mean that you do not have enough money to pay all your creditors and afford your reasonable living costs (i.e. mortgage, travel, housekeeping etc....)
If you are insolvent there really are only three options available to you
(i) Make an Informal Debt Repayment Plan with your creditors. This will see you offer your creditors an amount you can afford to pay them each month. This option is usually worth considering with smaller debts or if you are able to pay the debt off in full in less than 60 months. Interest and Charges are sometimes frozen by your creditors although this is not legally binding on them.
(ii) Apply for Bankruptcy. You can apply to the Courts to become Bankrupt. You will most likely be discharged in 12 months. If you have any disposable income (this is your total income less your reasonable living costs) you may have to offer this to your creditors for a period of 3 years. As a home owner it is very important to understand that in Bankruptcy you may lose you home as the Court may decide to sell this on behalf of your creditors. As you have very little equity in your home it is unlikely that the court would want to sell it (as they would sell it for less than market value on a quick sale basis), you may therefore be able to buy the house back for an amount ranging from a nominal fee of £1 up to the £5000 equity value that you have in the house, you would also have to pay the legal costs of transferring the house back into your name (c£500). In Bankruptcy all your unsecured debt would be legally written off. There are some negative impacts with Bankruptcy, your name and details of your Bankruptcy will appear in the local paper and Bankruptcy may affect you being able to continue your self employment role if you are a Director of a Ltd Company.
(iii) Propose an IVA to your Creditors. An IVA will allow you to propose a payment, made up from your disposable income, to your creditors. IVA's are usually payable for 60 months (5 years) after which all your unsecured debt will be written off. If accepted an IVA is legally binding on all your creditors and Interest and Charges are legally frozen. You may have to put forward the equity in your home (although this is unlikely due to Loan To Value mortgage constraints), but you will retain ownership of the property. You will normally need a minimum of £300 a month Disposable income and will need to put your creditors in a better position than they would be in Bankruptcy for them to accept your proposal.
I would recommend that you contact several Experts who can offer you assistance in finding the correct solution to solving your individual debt problem.
Best Regards
Oliver
Thomas Charles Ltd, A medium sized debt solutions provider based in London.
Read customer feedback at:
www.thomascharles.com/about_us.asp
