Family debts

[Skint77]

On top of the mistakes i made in my previous post; to top it off I owe my brother �9k. He loaned it to me so I could put down a deposit on my house 3yrs ago. It was agreed that I would pay him back with interest in 3 yrs - its due this December; and now have no means of paying him back. Obviously, if i'd sold my house as planned last year, I would have cleared my debts with my morgage and loan lenders, and would not have received a CO (for a CC yrs ago) as this was only put in place 3 mths ago . My brother is making demands on me & villifying my name to family & friends. Obviously, I would never intentionally NOT pay him, but the payment arrangement may have to change. We did a written contract between us, and that is all that we both have. I had all sorts of plans a cpl of yrs ago, unfortunately, financially I almost went bust and I'm lucky to have got this far. I do feel awful about this situ as I have not protected my asset (his investment) as well as I should have. Nor do I want bankruptcy, I'd feel so ashamed. I go about each day as if everything ok but its just so not. I dont know what to do on this, as he has already started legalities by sending solicitor letters. Once again, any advice appreciated

[tigwig]

go to the CAB they will put you in touch with specialist free debt advisors who will help you sort this out. Can you not extend the mortgage on the house to lower the monthly payments? This would mean you were paying extra in the long run but could help in the short term. I have had to do the same and it lowered our mortgage by �50 a month which is not a great deal but it helps. I don't know if it would be possible to consolidate all the loans and put them on the mortgage or if that would be a bad idea but its an option to think about. The debt advisors will tell you the best thing to do. In regard to your brother I guess all you can do is tell him you are doing your best to sort things out and will pay him back a soon as you can. Good luck

[themas]

Definitely go to CAB. A lot of people in your situation feel scared of bankruptcy but it can often be their salvation & lifts a great weight off the shoulders when it takes place.

From what you say I very much doubt whether an IVA would be appropriate - it would need a substantial amount of spare cash for you to pay each month for 5 years, & would not cover the secured debts.

If you decide on bankruptcy you could stop paying the mortgage to raise the fee & to raise money for a deposit & initial rent on somewhere to live. The house would be repossessed & sold and all the secured debt would be included in the bankruptcy. If you had to pay anything at all it would be only for a period of 3 years. Go to Insolvency Service website & download their various booklets to find out more.

Your relations with your brother will be unlikely to improve whatever you do, as you just don't have the money to pay him back. He would be a creditor in any bankruptcy and you would have to treat him exactly the same as any other creditors - you must not give him any preference. However, what you do after you get discharged from bankruptcy is entirely between the 2 of you.