I am about £50,000 in debt to banks and have £30,000 owing on my mortgage. I had a downturn in my health back in January, which caused my energy levels to plummet. As I'm self-employed, that meant I couldn't do enough work to keep my cash flow healthy. What with rising interest rates too, I am now having increasing trouble keeping up the £400 approx per month in interest I pay on my credit cards.
My house is worth about £175,000. Can I (or should I) declare bacruptcy? If so, what will happen to my house, which is my only significant asset?
Alternatively, I could try to survive till next Spring, then sell my house then and pay off my debts. Trouble is, I have sitting tenants in the house, which might make it harder to sell.
Thank you, Tim. How do they force someone to sell their house? Is that what 'County Court Judgements' do? How long does it typically take for the summons to arrive, say, re a £10,000 debt, if one simply stops making repayments (e.g., because one can't)?
I see there are a lot of websites on IVAs. Which is a good one to go to to learn about IVAs, and find out if I qualify, etc. (without giving away my identity and private info at this stage).
How come? Do they have a lease? If so, when does that expire?
'Sitting tenants' implies a right of tenure. These days most tenants do not acquire such a right, although they can stay until the end of their lease, of course. If the lease has already expired, then they have a right to two months notice, although it may take a court order to get them out, and that can take longer.
You are not bankrupt, and there is no need to involve an insolvency practitioner, as that will cost you, and some of them are not the most decent, honourable folk.
They will be on a 6-month Assured Shorthold Tenancy. The current tenant's one expires in 6 months. I am trying to prepare another flat in the same house so I can get another tenant in. That's costing me money to do, but if I do it, my loan+mortgage repayments will be covered, I think.
Yes... When I have given 2 months' notice in the past, they have always moved out within 2 months. But you see, if I move them out, and then the house doesn't sell quickly, I'm really in a mess then: no money coming in, and debts piling up, etc. Then I might end up having to auction the place and get a crummy deal.
OK - thanks. I'm just worried because if my health deteriorates, or I can't work for other reasons, I'll be in a dire predicament. It's been a struggle keeping up the payments over the years and I've slowly been getting deeper and deeper in debt, although it hovered around 50k for a while while interest rates were low.
One big setback or unforseen expense could make things much worse. On the other hand, perhaps interet rates will go back down and the extra tenant will save my skin or ease my situation.
In a few years, my mother will die (She's 91, but in reasonable health for her age). Then I should be receiving around 30k to 50k from my late father's trust. If I can hang in there till then, I may be able to pay off my credit cards, at least. Then I'll be left with a £185 monthly mortgage payment, which I can easily handle.
Alternatively, I may get so tired of this deepening-debt situation and just sell the house next Spring, as a going concern, with the tenants already installed. Then I can pay off all debts and have something left over and start anew. It's tempting. But it's also a big hassle, and it means I'd have to live in a smaller, cheaper property or leave my friends behind and move to a distant county where property is cheap. sort of swapping one bad situation for another... I'm not sure what is the wisest path.
This part of the process hasn't changed. They get a court order. Only now they have to enforce selling the house immediately instead of waiting.
I would guess that the court process takes 3-6 months. But the amount of time that the company will wait between you stopping payment, and them going to court, is indeterminate. This will likely depend on how you inform them that you can't pay. They have up to six years to enforce the debt. If you really can sort yourself out in 6 months they will probably wait.
No idear about the operation. I just know the name!
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