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Moderators: TalbotWoods, JaneClack

By dieselc
#315483 Ok, heres my story.
My debt problem started at 20 when i was sold a mortgage with an endowment policy.
We bought this house 25years ago, with a small deposit and an average mortgage. The father in law was a builder and told us to buy this run down house, do it up with his help and sell it within a few years and move upwards and on wards.

I was a long distance lorry driver, she was a shop worker. We married, with little help from parents with the cost of a wedding or house. it was done on a budget. The father in law moved away and sadly died too young. So the building work was mostly done by me and friends help. Lots needed doing. And I’m still at it. In fact, jobs I did 20 years ago now need doing again. (the debt grew)

In the last 25years we’ve had three lovely children. now 21,19 and a 16yrs. 15years ago the wife became ill. It took doctors a while to diagnose what was wrong. She has ulcerative colitis. This means she spends a lot of time going to the loo. She’s takes lots of tablets and every now and then when it’s really bad has to spend time in hospital. She had to give up work. (the debt grew)

The father in law passed away when he was 48, his brother died of cancer a few years later at 52. I came out of the hospital after seeing her uncle pass away and said to my wife life is to short let’s release some equity in the house and buy a nice car and caravan and have some decent holidays. Something i don’t regret. (the debt grew) We still have our 17year old trooper and 15year old caravan, although they don’t get used very much these days.

Id got a better job working in a brewery ten years ago. More time at home, more money, a nice beer allowance and life was good. We got the family tax credits and finally i thought things were good for the hard working family man. I remember ringing the tax up to say they must be paying me too much tax credit....”no sir, that’s what you’re in tilted to”. Said the very nice man!

Then they wanted a lot of it back! And my endowment policy that i bought after being told that when I’m 45 it will pay my mortgage off and still have enough left over to buy a new car was failing. So i ended up being sold something else im not sure i wanted. A repayment mortgage. This consolidated some of my other debt that was building up. Life wasn’t too bad. After all, you can’t take debt or money with you if you pop your clogs. Things will be ok..... (the debt grew)

I’m 45 next may and not a hope of paying my debts off, never mind buying a new car! In April i will be 3years into an IVA. Something else i feel i was sold wrongly. Things had got hard and we were finding things difficult. Its hard work robbing Paul and Peter all the time. I wanted to go down the bankruptcy road 3yrs ago but the wife didn’t. And the people that sold us the IVA didn’t either. So head down and plod on, good job i can get lots of overtime.

Then at the end of October this year, the dhs told us the wife’s benefits were going to stop. As they don’t think she is ill enough. Fantastic! How do we find that £440 a month?

The house needs work. A lot. The roof leaks in the girl’s bedroom. The roofer what took my £1500 pounds last year to repair the flat roof over the girls bedroom says it’s not his work but the main roof what’s now leaking. I paid him to do it rather than myself because for once i wanted someone who’s meant to know what he is’s doing rather than me climbing ladders and messing about. Wish id done it myself! Both cars need mot’s this and next month. The trooper needs taxing. The list is a large one.

My debts. 70 grand left on mortgage. 40grand on a paragon laon. And im paying £200 a month on a IVA for debts that amounted to about 9grand on credit cards. That lot combined costs me just over a grand a month. I earn 27k a year, with overtime 31k. We don’t smoke, drink, spend lots on clothes, Christmas or holidays. We don’t have expensive hobbies. (just the trooper and caravan which are more garden ornaments these days) we use a clapped out old £200micra to run round with. I do all my own car and house repairs to save money. we don’t go out much. We don’t have the time with me working extra shifts.

Im fed up. I’ve have been feeling the effects of working extra 12hour night shifts lately. This year i was trying very hard to get some money saved up, but its impossible. I dropped my glasses the other day and broke a lense, that was another £50 gone. And now we have lost the wifes benifits.......?

Ive had enough!

The wife has finally accepted that we are never going to finish this house. Its an end terrace on a busy main road, with no parking and no garden. There is no way we can afford to do even the smallest of jobs, let alone consider a new kitchen or new windows. All of which need doing.

For £650 a month we can rent a nice property that needs no work. Has a drive way with a garage. My daughters won’t need to sleep on the living room floor when it rains. And if the roof leaks, its the landlords problem. It would also have a garden we could sit in if the sun makes an appearance. All i want is to do is be able to come home, park my car on a drive way outside my house go indoors without looking at the house and thinking what work needs doing. All she would like to do is go shopping with our two daughters and treat them a little. Perhaps we could if we weren’t being suffocated in debt.

We’ve learnt to live without credit cards. We don’t have an overdraft. My wages go into a co op cashminder account , what is needed for direct debits is taken out automatically into a Santander account were the direct debits are. What little is left in the cashminder account is free money. but that’s just going to paying other bills. (like a new lense for my glasses!)

The wife accepting what we need to do, finding this forum and even writing this has made me feel more optimistic about the future. Almost like I can see a small light in the distance.

We have contacted the IVA people, who have said we don’t need to pay them for six months. The term will be extended. We’ve contacted the co op, which the mortgage is with, and also contacted paragon. In November this year, it will be the first time we haven’t paid our debts. We are waiting to see the citizen’s advice bureau. We have lots of questions to ask. We know there is no quick fix, well perhaps there is, but that’s what got us here.......a quick fix!

There is very little equity in the house if any. i doubt if selling it would cover all our debts. Being realistic, i doubt very much if you would get much change out of 30k doing it up to finish it. And there is no way i can find that money. its very much a builders project to do up and sell on. i have about 17 years left on my mortgage and about the same on the paragon loan i should never have got. And of course now 2 and half years left on my IVA.

Bit of a story i know, but at the same time one im sure you’ve heard before. We should never have started off our lives in debt. We should have rented way back then. All the money we have used trying to prop up this house could have been put into a deposit for a house which didn’t need so much work. Hindsight ehh?

Enough is enough!
I don’t intend to live the next 20years like the last. Im scared and apprehensive, but after reading some off the posts on this forum i know others have been through what we are about to and how their lives changed, im more determined. Things have to change!
I feel we have tried hard to make the IVA work, but as time goes on, feel more like we’ve been sold another quick fix lemon.
Il keep posting on our progress and no doubt batter you with questions.

I hope you enjoyed reading this, its took me a couple of hours to write.
Regards. Chris.
(sighs, feels better. time for a brew!) :D
User avatar
By JaneClack
#315513 Thank you for sharing your story.

I can sympathise as had a close relative with ulcerative colitis and know they spend a lot of time backwards and forwards with an acute attack.

Anyway you said £200 a month over 5 years for £9,000 worth of credit card debt - I think you must have the figures wrong as this is paying back £12,000 and would only ever be considered if you had an asset you were ring-fencing as this is 100% IVA plus hefty fees.

If the property is in negative equity and you could rent cheaper and were happy to lose your old caravan and the car was needed for work then I can say that bankruptcy does seem the quickest and cheapest way of doing it BUT there must be something I am missing - is the Paragon loan unsecured and is this in the IVA?

Anyway, that notwithstanding bankruptcy would clear any shortfall on mortgage and secured loans, get rid of all the unsecured debt and allow you to start again in rented accommodation.

However, please discuss this with your supervisor and explain this to them - they still have a duty to you to only allow this to continue if it is realistic and sustainable.

The Co-op might allow you to keep the account but as they no longer open new accounts for undischarged bankrupts you might have to look elsewhere.

I have arranged for a colleague to email you some information on bankruptcy but also strongly advise you to talk to the CAB and your supervisor.
By dieselc
#315833 thanks sarah, and thank your friend for the email, much appreciated.

yes you are right about the IVA, its not 9k but 23k. the paragon loan is secured. if it wasn't things might be different after the iva had finished.
and im not sure about the house price. i would have said in its condition it would put us in negative equity.
we now have an appointment with the cab. its the 18th dec.
will keep you all updated. :)
User avatar
By JaneClack
#315853 Yes, please do. Also make sure you talk to a money adviser at the CAB not a generalist adviser as some - not all - have some rather old-fashioned ideas about bankruptcy.
By dieselc
#317613 finally spoke to paragon this morning. explained the situation and was a little surprised how helpful they were. gave me the number of step change debt charity and explained who they were.
paragon is sending out the usual forms for us to fill in.
went and had a look at the online step change site. not going to ring anyone up till ive seen the cab on the 18th.
By dieselc
#337093 update as to where we're at.

we went to see cab before christmas. she didnt mention anything about bankruptcy till we told her the house was in such a state that it would cost around 30k to finish it and if we tried to sell it, we would only get buttons for it. at this point her advice was to go bankrupt.
we took a payment holiday from the mortgage till april. got a break from the iva, and managed to get a couple of months off from paragon. we've since managed to get away with just paying them (paragon) £50 for a few months just to keep them from the door.
this has enabled us to save a wedge for the rent on another house.
last week we saw a house we both like, it ticked all the right boxes. the kids are all very excited, the girls will get there own rooms. and unbelievable this house has 3 bathrooms. so no more crossing your legs. plus i get my garage and garden ive always wanted and a roof that doesnt leak. and if it does......il be ringing the agent up. we move in on the 3rd of april.
once we are in and sorted, we will be sending the keys back to the co-op and then we have to go back to see cab.
i guess this is when we press the self destruct button!
since christmas things have changed greatly here. both my wife and i are happier, we feel we are on the same plain again. and feel like a chapter is about to end and a new one start.
we know there is still along way to go yet, and things might still get worse before they get better, but we feel we are on the road to recover.
friends and family have been very understanding and supportive. with only one person giving negative feedback.

shall keep you updated as soon as we press the big red button.
User avatar
By TalbotWoods
#337423 Hi dieselc

Just one thought, make sure you get either a certificate of failure or as a minimum a letter form your IVA company saying the IVA has failed, or the court will have to stay your bankruptcy until you have one.

It a pain, but it is a legal formality that has to be complied with.

Tim
By dieselc
#337433 thanks for that Tim.

i have one question if i may?

when i apply for bankruptcy ive read the Official Receiver will freeze my bank accounts. i have one and so does the wife. just wondered how i will pay for direct debits and of course, how will i receive my wages?
User avatar
By TalbotWoods
#337443 Just prior to or just after you will need to open a Barclays Cash Card Account, and please make sure that is what they open. Currently this is the only account open to bankrupts in the UK, though that does change periodically. It has no monthly account fee, is based Online, in branch or via the phone. It is a BASIC account so you can't get any overdraft fees and build up any debt.

It has either a Visa Debit Card or Cash Card, you can set up Direct Debits and Standing Orders, in fact pretty much the same as a normal account, except is doesn't come with Cheque Books, Overdraft Facilities, etc.

I would also suggest setting up individual accounts, so if for any reason one account goes pear shaped you have a back up!

http://www.barclays.co.uk/Otheraccounts ... 2557963900

Tim
By dieselc
#471728 two years on and I've just re-read what i wrote and thought id just post an update here for anyone reading my story and who is also looking into bankruptcy.

as of October this year we have been discharged from bankruptcy.

life is so much different now than when i first wrote on this forum.
i have no debts and hopefully never will again.
money in my pocket. money in my bank.
im just about to go out for my tea with my wife and not worry about spending some of my hard earned cash on a treat tea!

then im going to return home, to a lovely house where the roof doesn't leak, and if it did..................then i just call the land lord.

my wife's medical condition, (Ulcerative Colitis) is alot better. she is also doing a nvq course which will allow her to return back to work in child care in the near future.

if your reading this and thinking of going bankrupt you have made the first step.

you feel like your in a very dark place but there really is better place in front of you.

good luck and dont worry, it really isnt as bad as you think!

X
User avatar
By JaneClack
#471729 Thank you for posting this - it will be very reassuring for some people - it is true that the thought is far worse than the deed.

I am so pleased things are getting better - you got the fresh start you deserved :D
By dieselc
#472692 well. today is 3 years since we made ourselves bankrupt. I thought I would just add to my post how we are going on.

Great!

For last christmas we decided to buy another car after the old one we was given, was given the last rites.
how nice it was to go out and spend £2000 on a nice and tidy little berlingo. A car we have wanted for a long time (meets our needs well) and bought with money we had saved. and since buying it I have bought new tyres for it and a good few other things...........and not worried that im spending money on something when its probably best spent on a falling down house.
we have driven past our old house many times and its new owners wasted no time it fixing it up. we saw the pictures of the inside when the builder who bought it put it up for sale. Its nice to see it completed and looking nice. neither of us has any regrets about leaving it. In fact quite the opposite. it feels good to see its someone elses problem now.
we are still in the same rented home from when we left. and now one of the girls has moved out and the eldest son is also getting ready to move out we ourselves are gearing up to move out next april to a smaller house. with just the youngest daughter in tow.
the wife is much better, down from about ten tablets a day to just one. works pretty much full time and is a different person to four years ago when we received the letter from the dhs telling us she was losing her benefits.

as for me. well! ive never been better. I enjoy photography and have bought myself a nice camera and a couple of lenses.
again, something else I could only ever dream of. and love nothing more than spending a lazy day taking pictures.

we haven't really encountered any problems with going bankrupt. the only little problem was when we tried to look for another mobile phone contract. we already had one when we went bankrupt and ended up having to stay with them as whenever we tried with another provider it rejected our application.
we both have credit cards. and we use them. mainly to help with our credit rating. but we always pay them off each month. my credit limit has gone to £1500 now. not that i ever intend to use that much.

Yes life is great. so much better than 4 years ago!
User avatar
By JaneClack
#472694 I am so pleased things are going well and your wife is also probably much better due to lack of stress as well as the tablets.

It is kind of you to make the post and I hope others read it to see there really is light and life at the end of the tunnel.