Repossession Worries

[lisa80085]

I have been in serious debt for a long time however I consolidated all of my unsecured loan into a homeowner loan over 2 years ago, however debt spiralled out of control again due to a lot of factors including my own irresponsibility and last year, I entered into a Trust Deed (an IVA - in Scotland).

My husband's hours were cut down on work so much that he ended up leaving the place to find new work however it took him almost 3 months to find another job but as he left voluntarily, we were unable to claim Job Seekers Allowance as a result, I have fallen behind with my HP Car (5 months in arrears), My secured Loan (4 months in arrears), Mortgage (2 months in arrears) and council tax (3 months in arrears).

I have just received an initial writ for repossession from my secured lender and I am unsure what I should do as I have a shortfall (due to the 2nd mortage) and with 2 young kids I worry about being homeless.

I am sure that within a couple of months, we will be back on our feet financially however as I have spent the last few months with my head in the sand I am unsure as to what to say to my secured lender and would appreciate any advice.

My only other concern is that my fixed rate mortgage is ending shortly which will bump my mortgage payments up by about �100 a month and as my credit history is so bad and i have a secured loan on the house I will not be able to obtain another mortgage and will eventually not be able to afford it!

Any advice would be greatly appreciated

Lisa :( (please help me turn my frown upside down)

[tigwig]

I think you need to go to the Citizens Advice Bureau. They will help you to sort out all this mess and put you in touch with debt management companies that DO NOT charge a fee. As you have already learnt, consolidation loans do not really work and can be a rip off.

[lisa80085]

Thanks for that - I have spoken to a few people today who have said that the best option would probably be to allow my house to be repossessed and then declare bankruptcy (to sort out paying my secured lending - as this will no longer be secured and will take all my items under the trust deed out of the equation) - I have no attachment to the house so I am not worried about that - has anyone been through this process that can give me some advice on how this works?

[lisa80085]

Oh I forgot to say I will be going to Citizens Advice on Monday to ascertain whether this is a feasible option.

[southern6]

As far as i am aware they can repo your home as in the loan agreement.you dont want to let it get reposessed if there is any money in it,you might aswell put it up for sale yourself and try struggle to pay the loan and the mortgage.If your car is on a personal loan agreement then they cannot repo it.so you could sell it.but if it is on fianance they can but there are a lot of restrictions in the fianance normaly.for the ammount you have mentioned above it isnt worth going bankrupt as it isnt so much and it is poss for you to get out of it.you wont get a thing not even a phone line if you go bankrupt.I would go to C A B 1st they are very good.
I hope you manage to get it sorted out good luck but many peeps in the same boat so you aint alone.

[notsoshortie]

Lisa, sorry to hear about your situation. Firstly, you've already started to do the right thing, you've taken your head out of the sand (as you say) and have started looking for help. As per previous recommendations I would get in touch with your local CAB but also get in touch with all of the people that you owe money to and explain the situation. This may buy you a little more time to get back on your feet. With regards to reposession, there is a long process that has to be followed by your lender before your home can be reposessed so dont think it's too late. Before looking to be reposessed I would consider selling as once you are repossessed the chances are you'll get a lot less when it's sold and you will still be responsible for any shortfall, contrary to what others may tell you. In addition to this there will also be additional charges added to your debt for having to go down the reposession route, not to mention what it will do to your credit history. Your lender will probably prefer you to sell so may cut you a bit of slack if you do decide to do this. You should also look to prioritise what you owe who and concentrate on the most important ones first (ie the secured ones). I'd also look at cutting back on any unecessary expenditure you may still have such as cable/satelite TV, gym memberships, etc, etc. If you have a spare room then maybe look to take in a lodger until you get straight although the lender may not welcome this.

Good luck, I hope you sort things out

[southern6]

Hi lisa did you go to the C.A.B did you get any help,whats the situation now then,do you feel any better.please give us an update.I do hope you get sorted out.there are a lot of people in the same boat and it is a worry but most of the time things can be done to get out of it.and like the last post said you have started good by taking your head out of the sand thats the 1st good move eh.hope all is well thanks dawn