Hi there, I am currently on a DMP with CCCS and am paying token payments of £5 to each of my creditors (totalling £50 a month) having suffered a breakdown in March last year following two miscarriages and giving up my second job as a result (the work that I do means that I have to be emotionally stable myself in order to work ethically). I can cope with my main job and do some teaching work on a consultancy basis but can't really foresee me feeling able to take on a permanent second job again. I owe £60,000 in unsecured debt and have about £25,000 equity in my property, although recognise that it would be unlikely that I could release any of this at present.
I don't want to lose my house so bankruptcy isn't really an option but doubt I earn enough secured income to propose an IVA. Have any of the experts on here worked with anyone in my position? If so, what ways forward might be possible for me?
Is the property in your sole name? If not, not all of the beneficial interest will be yours. Also, is the valuation of £25k equity a recent one as the housing market has changed quite a lot over the last year?
Thanks for your prompt reply skippy. I have based my valuation of the equity on the sale of a house across the road a few months ago. The equity is basically the deposit that I put down when I moved in and came from my divorce settlement. The house and mortgage are in my name alone.
Paying £50 per month in a neverending DMP seems pointless, but if you are not prepared to use the equity in your home to effect an offer of settlement to creditors, and wish to avoid bankruptcy, is seems that this may be your only option at present.
Would you consider taking in a a lodger to create some disposable income? If so, then an IVA may be possible until you are well enough to go back to your second job at which time the lodger could go.
Thanks for your suggestion Melanie. I agree that never-ending dmp is pointless but feel that I need to be doing what I can to show willing to my creditors. I would be more than prepared to use the equity in my home, I had just assumed that I wouldn't be able to release any of it in the current climate.
As for taking in a lodger, I have two children so no spare room for one. I already work full time and have recognised that I was over stretching myself with the second job previously and that this contributed to the breakdown, this is my reason for saying that it is unlikely I would be able to take a permanent second job on. I am looking into doing more consultancy work as this tends to be more flexible and can also pay quite well, I would also be more in control of when I work. However, the current climate also means that less organisations are buying in such services.
I think that the only way you could release the equity in your property would be for you to sell it and use the proceeds to make a full and final offer to your creditors via an IVA - which I am sure would work.
Is this something you would be prepared to do for the ultimate fresh start?
Hi Melanie. I don't really want to sell our home, the children have been uprooted enough and, having looked into social housing in our area, there is little available and a huge waiting list for what there is.
I guess it's just a case of carrying on as I am and looking ahead to a time when things are a little more stable and I have more options.
Suppose I was just hoping for a solution that I might have missed in all the research I've done!
Private rental locally would be about £200 pcm more than my mortgage. That was my reason for investigating social housing, along with the knowledge that social housing tends to be more permanent. My overriding concern is for my children to have somewhere as secure as possible that they can call home. As worrying as my debt situation is for me, I try to keep it from them and as long as I can pay the mortgage, they do have that security.
I am surprised by the difference in costs you have found for rentals. Our rental is a whopping £900 a month less than we were paying on the mortgage and we have a much, much bigger home now which is valued at £100K more than the house we lost. Maybe the market is totally different out here in the sticks, lol!
I do understand about not wanting to uproot the children...I have two, both pre school age, and they have had the last 3 christmasses in 3 different homes. Obviously not ideal.
I hope you can sort something out soon - good luck!
I can believe the difference between the pricing Hunnybunny - for us to rent an identical property would cost us around £150 - £200 more than we are paying for the mortgage.
I could actually rent the three bed version of my house for £800 per month and stay in the same road. My mortgage is £1100 per month. Plus I have a secured loan as well which costs £900 per month.
Really surprsed they never expected us to sell as we have equity.
Last edited by kallis3 on Mon Jan 04, 2010 12:54 pm, edited 1 time in total.
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.
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Wow, I never realised there were such differences across the country or between mortgage payments and rent. My mortgage is £450, hence the difference between that and potential rental costs. As well as the emotional side of not wanting to lose the house because of the impact on the children, there is also the practical side - I would be even worse off financially. To be honest, I almost wish there was no equity in it as then I could declare myself bankrupt and look at starting again with a clean sheet and a safe roof over our heads (I realise there is more to it than that, am just feeling really stuck and down at the moment). Thanks for your good wishes angelrainbow, I do have a lot of beautiful people in my life and usually feel blessed with my lot and trusting that something good will come of all of this... the money thing just hangs around like a dark cloud some days and takes some shifting!
You also need to watch your mortgage hunnynunny as if interest rates rise as they are expected to by the end of this year, and you are not on a fixed rate, you could be faced with much higher payments. Are you currently paying on an interest only or repayment basis?
I am on a tracker at the moment as this was the best option available when my initial deal came to an end. I am aware that this may not continue to be the best deal when interest rates go up and will review it then.
With regards to the DMP, my creditors have all stopped charges and interests so far, does anyone know how whether they are likely to continue to do so or if they will get fed up and take further action?
