To wonder if this is a good idea?(46 Posts)
Dh got himself into a lot of debt before we had children. He got a mortgage on a small house before that but ran up credit cards ridiculously. Because of that, we are stuck in a house far too small for us. 2 children sharing a tiny bedroom. We never have any money despite us earning 45k between us. It's his fault but not ours and it's no way to live.
Dh has come home today and said he has spoken about getting an IVA and doing voluntary termination of the mortgage. He is saying 'screw this coffee, lets live a bit, get rid of this house because we have barely any equity anyway and go rent somewhere where we can actually enjoy our kids childhood'. I feel excited by the prospect but I do want to own our own home and have something to pass down to our kids. What would you do?
I rent out of necessity not choice and Private renting can be very unstable, I have had to move three times in the last two years, again not of my own choice. Personally I would be very wary of giving up your own home to rent especially if you have kids.
He is saying that after 5 years, it will be off his record. We are so bloody miserable where we are.
I work with SO many families whose housing is miserable. SO much worse than yours.
Please think carefully and please don't give away a roof over your head easily. Have you seen "Cathy Come Home"?
Dh got himself into a lot of debt before we had children. He got a mortgage on a small house before that but ran up credit cards ridiculously. Because of that, we are stuck in a house far too small for us. 2 children sharing a tiny bedroom.
Your two children arent sharing just because of his debt! Theyre sharing because you chose to have two children in a tiny house despite having loads of debt with no prospect of clearing it!
Personally i wouldnt be taking DH's word for anything and would be doing my own investigations into wht is the best option. Tbh it sounds like he wants to blow off the consequences of his actions.
Oh, I didn't realise what IVA was I thought it was to do with selling the house! is this the same as a Trust Deed? If so consider it essentially the same as bankrupsy. My ex and I signed a trust deed about ten years ago and we were completely misinformed about the level of impact it would have on our lives, not just our credit rating. We practically had to beg to even get a bank account because they didn't warn us that our existing one one would be closed down. I'm only just getting to the stage now where it's dropping off my records but I have been turned down for many things in the past because of it including jobs and funnily enough flat tenancies. I agree with the posters who have advised debt managemebt instead.
I should add that when we signed it we were like you in a position where it seemed like a shiny nice option rather than having to because of CJDs or anything as serious as that. Just a lot of debt we were struggling to manage.
If you have the security of having your own home - far from perfect though it may be, I would be loathe to give that up for renting, with dc. What's to say you would get a bigger place, and where's the security?
There are many things in life worse than sharing a rooms with your sibling.
£45K is no small income - have you had support with plans to pay off your debts?
No fatmomma I have not seen it.
Just so fed up of having no space anywhere and embarrassed. Had a party recently for my child and I'm sure I saw one of the mum's looking round snottily. Am seeing friends being given great homes by council we would love to live in but we are not eligible for anything because we officially own a home. A large part of me just wants to fuck it all off.
One thing to bear in mind - If you do sign an insolvency agreement you will need a guarantor for most agency let tenancies. That's something you should probably prepare in advance if you do go doen that route.
Your H can not be trusted with money. Do not believe anything he says and do your own investigations. Passing the house on to your children is irrelevant, what matters is having secure accommodation as they grow up. Don't make any rash decisions. Can you get some advice from someone who is more clued up than your plonker of an H?
It may be late and I may have had ...
My best friend in secondary school lived in a very small terraced house; it was parents and three children.
The tiny garden was gorgeous, it reminded me of a cottage garden and I have many happy memories of barbercues there. Not to mention sunday lunches and random teas after school when I couldn't face my own house. It seemed like everyone who popped by was welcome, with everyone crammed round the table. My friend got on better with siblings than anyone I have ever known, and to this day they are very close as a family depite being more geographically far apart.
It was a little house full of love! Is my cheesy point.
<gets coat, trips and hiccups on way out>
"Cathy come home" is a film made in 1966. What relevance does this almost fifty year old film have to the OP and her situation?
OP - how much would it cost per month to rent the size of house you would like to have?
An informal debt management plan or DMP might be better. I think getting some proper advice so you can clear this debt is essential.
Do NOT consider going into a private rental. It's a bastard situation. You'll struggle to find a place, esp with a bad credit rating, and you'll have no security in your property. The rental market is insane at the moment with too many people chasing too few properties and even on a 45k income you could end up paying a big chunk of your money into rent. Look at decluttering, clever storage, and making the most of your space. You should read Squash and a Squeeze!
IVAs are brilliant if your circumstances are right for them.
Has your DH sought some free independent advice on it and considered other solutions?
It's all well and good pps saying a DMP might be better but we've no idea from the OP how much the debt is, how much surplus income they have etc. If the debt is going to take (for example) 25 years to clear in full then it might be worth looking at an IVA to have that clean break in 5 or 6.
Is it not an option to go for the IVA but keep the house? There would usually be an expectation for your DH to try and remortgage as part of the IVA (depending on the level of equity available), but at least you could stay in your home and keep the equity. I suppose the difficulty then is that you wouldn't be able to sell up and move during the duration of the IVA without the Insolvency Practitioner's permission (and any equity would likely need to go into the IVA anyway).
Oh, just to check as well (not 100% clear from the OP) - is the mortgage just in his name? If it's in joint names there's a couple of things to consider, which can be good and bad:
- If there's any mortgage shortfall you'll be jointly liable, so although his could be taken into account as part of his IVA, they could still pursue you for the full amount. You could possibly look at a joint debt solution but then obviously that buggers your credit rating as well.
- On the flip side, if there was equity left over from property sale, it'd only be your DH's share that'd need to go into IVA. So yours could be used towards rental deposit or whatever to set up new home.
Obviously that only applies for joint mortgage. If it's only in DH's name then it'd be different.
Talk to the CAB about the relative benefits of a debt management scheme versus IVA. They can give you advice that's specific to your situation.
There are no easy answers to debt, but there are some workable solutions. The sooner you take professional advice, the sooner you'll be on your way to sorting things out.
I think you would be mad to give up a secure home.
You won't get rehoused by the council.
Make the home you've got a happy one, and clear the debts another way.
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