Bit of a mess!

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funkster

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Post by funkster » Wed Jul 14, 2010 12:21 pm
Hi All,

New forum member here. I'm looking for all sorts of advice and tips.

Ok, scenario:

Total unsecured debts of £53k - currently in a DMP
Two cars excluded from DMP - both in finance agreements.
Two houses, our current residence .. mortgaged in both names, and another house in just my name, which is rented at present as we had problems selling it when market collapsed.

Both houses were at 95% LTV ... but not sure I'd manage to sell the rental one, but the main one might be able to be sold to cover the mortgage.

Currently as I mentioned we are in a DMP with PayPlan, however I can't help but feel that they suggested that route as it's in their interests to do so. They might be free, but I'm not sure they are as impartial as they suggest.

For a few months now, my partner and I have been having difficulties with our relationship, that she wishes to go our own separate ways. She will of course take our son with her. (We are currently having counselling, but I'm the only one trying to make it work ... and so I'm trying to understand my options).

Within our DMP, I'd say £13k is her debt, and the remaining £40k is in my name.

Now, if we decide to split up, she wishes to move in with her mother for a short while, and I shall rent. I really do not wish to move back to my other residence, and don't mean to sound snobby ... but there are a lot of old memories there which I'd rather not return to.

1) I guess I would have to reduce the DMP for a couple of months to save sufficient cash to place a deposit for a rental property.
2) Would I be best to try to sell the property? As I cannot afford it on my own.
3) She needs to keep her car for work purposes etc.
4) Ideally Id like to relinquish my car, and can then jump into the company car scheme at work, which would be cheaper overall while I get back on my feet. Plus they would cover MOT, Tax, Insurance, Tyres and servicing.

The DMP isn't going anywhere as some of the creditors haven't frozen interest, and each month the amount owed increases. The initial amount was due to take 10 years to pay off, but with interest being added of twice that of payments, it's never going to go!

5) I had considered an IVA for myself ... but I'm starting to wonder if by not having any property with equity, and certainly not allowed to put it in my name by the mortgage companys new lending criteria ... would I be better off looking at BR ??

When we took out the DMP, we had not fallen behind on any payments, we literally realised that we could no longer use Peter to pay Paul.

6) So with an already impaired credit rating, I'm wondering how hard it is going to be for me to get the following:
a) Rental property
b) Gas/Elec accounts
c) Landline telephone
d) Broadband ... since I need it for my work

7) If already in a mobile phone contract, since it's credit related, would that become cancelled following an IVA or BR?

8) If following IVA or BR, which order should I do things in? Obviously I would need to reduce payments and move out first? Can I reduce my DMP payments to that of a goodwill level while I move house and get settled?

So much to think about, and don't know which way is up at the moment! It never rains, but it absolutely pours down ... I really don't need all this to deal with at present! :S

Thanks in advance for any advice/suggestions.
 
 

Adam Davies

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Post by Adam Davies » Wed Jul 14, 2010 1:28 pm
Hi and welcome
Selling up and going into rented sounds a sensible route, you should not have any real problem renting, at worst you may have to put a larger deposit down.
I would speak to several companies/experts and explore the bankruptcy and IVA route. I would stop paying into the DMP and use that money to fund the deposit on the rental, then go down the IVA or Bankruptcy route.
Is there any equity in the car to use towards a deposit ?
Your mobile phone contract will not be affected by either route
Regards
Andam Davies
 
 

Michael Peoples

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Post by Michael Peoples » Wed Jul 14, 2010 2:12 pm
I agree with Andy that a bankruptcy or IVA is certainly an option and I share your concerns about the current DMP. As mentioned in another post commercial DMP companies work very hard to get interest and charges frozen whereas the bank funded sector do not seem to have the same success.

Speak to an insolvency firm for some free independant advice and good luck.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

plasticdaft

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Post by plasticdaft » Wed Jul 14, 2010 2:12 pm
I agree with Andy that there is little point in paying into a DMP thats not getting anywhere.

The service payplan look to have provided you has been poor so I wouldnt be tempted to touch them with a 10 foot pole for advice(although other forum users have them for IVA's and they seem to be ok).

Contact a couple of companies listed on iva.com and see what they say,but the easiest way out of your mess may well be BR,although that only my opinion.

Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
 
 

funkster

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Post by funkster » Wed Jul 14, 2010 2:23 pm
Thank you all for your replies thus far.

Would I be better selling and then going rented, or just getting a rented place and surrendering house via BR route?

At the moment I'm a little conflicted with IVA vs BR .. but I guess speaking to a couple of IP's would help that.
 
 

Michael Peoples

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Post by Michael Peoples » Wed Jul 14, 2010 2:30 pm
If you surrender the house any shortfall will be addressed in a BR or IVA but would likely be greater than if you sold it yourself.

If you can afford the house you could still keep it in either BR or IVA.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

funkster

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Post by funkster » Thu Jul 15, 2010 4:48 pm
Hi All,

I shall certainly stay about.

Well everything had been going smoothly until last night, where we had a "chat" and decided that it is best to go our separate ways. Although we have one more counselling session remaining.

So I think the plan is to sell the house if we can. Then I shall move into rented, work out my financial position, and seek advice then for IVA/BR.

I suspect if I can sell the house then IVA would be best, otherwise BR.
 
 

funkster

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Post by funkster » Thu Jul 15, 2010 6:30 pm
Im sure there will be some awkwardness and animosity initially ... as with these types of things. We will have to remain in constant contact due to our son. I sincerely hope she doesn't become bitter and use him as a pawn though.

Time will tell I guess.

I will however remain here while I struggle through my various stages and financial issues. I like it here :D
 
 

Michael Peoples

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Post by Michael Peoples » Thu Jul 15, 2010 8:01 pm
I hope it works out and regardless of what option you decide is best your experience will always be useful to others so definitely stay on as a poster.

There is also always free advice available here for you both.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

MelanieGiles

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Post by MelanieGiles » Thu Jul 15, 2010 11:40 pm
If you have no moral issue with making sure your creditors get repaid to the best of your ability, then bankruptcy proceedings will give you the very necessary fresh start that you require.
Regards, Melanie Giles, Insolvency Practitioner
 
 

funkster

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Post by funkster » Sat Jul 17, 2010 10:14 am
Hi Melanie ...

As much as I hate the idea of Bankruptcy, and the shame that it would cause my father ... I really think a fresh new start might be a wonderful idea at present.
 
 

kallis3

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Post by kallis3 » Sat Jul 17, 2010 10:33 am
Sorry to hear your news funkster and I hope things go ok for you both.

I would certainly speak to a couple of companies before making a final decision as to the route you want to follow.

BR isn't as bad now as it used to be and it is unlikely to be published in the paper so no one need know about it if you don't want them to.
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
 
 

funkster

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Post by funkster » Sat Jul 17, 2010 10:36 am
I think that is one of my concerns.

Firstly the perceived difficulty in getting things such as phone lines, broadband, gas/elec ... I must imagine that top up card meters must be such a pain.

Generally I have a good salary, and will be much better off ... but must ensure I save a lot of money and live within my means. Which this lesson has taught me!

The only thing my parents and I argue about is money, so Im going to keep them out of it as much as I can .. but it will be hard ... even as a grown independent adult! :P
 
 

kallis3

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Post by kallis3 » Sat Jul 17, 2010 10:45 am
I know that feeling - my parents would be mortified if they knew about our level of debt.

I think that you will be able to get utilities etc, not sure about whether or not it would have to be a meter though.

You would have to pay across between 50 and 70% of your disposable income for three years in BR.

You'd still be better off though.
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
 
 

plasticdaft

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Post by plasticdaft » Sat Jul 17, 2010 10:48 am
People do move on in life after BR so while there will be difficulties its really not much worse than an IVA and its all over much faster.

Good luck in whatever you decide and I am glad you feel you have learned from this and will hopefully life within your means(I hope the same of ourselves).

Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
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