Author Topic: What to do?  (Read 1340 times)

Wallyw

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What to do?
« on: Mar 14, 2012, 08:03:28 PM »
Hi I have debts from my first marriage now at 30k I have been with cccs since separation. My new wife has a home with about 40k of equity should we sell the home and pay all the debt as we would like a bigger house or would I not get a mortgage because of my bad debt history? I am in well paid full time work my wife works part time.
Thanks in advance


James Falla

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Re: What to do?
« Reply #1 on: Mar 29, 2012, 07:40:32 PM »
Hi there Wallyw
 
Sorry it has taken me a while to reply to you.
 
I would suggest that using your wife's equity to pay off your debts is not a good idea. How much do you pay into your debt management plan with the CCCS each month? How long have you calculated that it will take to repay your debt? If it is a long time then why not consider an IVA? At least this would get your debt settled within 5 years max. Possibly much shorter because in the mean time if your did decide to sell the house, your wife could offer a lump sum to settle your IVA early and you would be debt free immediately. This would involve using far less of your wife's money to do the deal and mean that you would have much more of her equity to spare. Once you were debt free and had no monthly payments to worry about, you could then combine your full disposable incomes to pay for a new mortgage.
 
I would not worry too much about your credit rating at this stage. It is already very poor due to the fact that you are in a debt management plan. Doing an IVA would not make it any worse. Please let me know if I can offer any more advice.
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Wallyw

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Re: What to do?
« Reply #2 on: Mar 30, 2012, 09:00:15 AM »
Hi James,
 
Thanks for your answer I have just over 5years to pay @£414 per month. total debt is 30K

James Falla

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Re: What to do?
« Reply #3 on: Apr 02, 2012, 06:04:37 PM »
Hi Wallyw
 
If you are paying £414 a month, then on the face of it you will have to pay for at least another 6 years before your debt is paid in full. I say at least as there is no way of guaranteeing that your creditors will not add further interest or charges during that period.
 
I think it would be well worth you considering the possibility of an IVA. That way you would pay for no longer than 60 months and you could guarantee that any further interest and charges will be frozen. As I mentioned before, if your wife did want to use any of the equity from her house to help settle your debt, she could well do that thus meaning that you would be debt free in a far shorter time.
 
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