As I mentioned in my first, these entries are just me trying to work throught the stress of our position. I am not looking for sympathy with any of these entries, although I'd love to here any constructive suggestions that you have.
Anyway, let's get on with it:
Fri 8th Aug 2008:
I got home this lunchtime to find a pile of letters from both my mortgage providor and the secured lender ("2", if you remember from my first post). It feared that the stress that I had before was nothing n comparison to what is about to come. That may still be the case, I don't know.
So, I stood there, trying to eat some lunch and have a cup of tea whilst opening these letters. To a T, all of them were exactly what I had been expecting for the last few days: "you're in arrears, pay us now or we'll take you to court".
The frustrating thing with this is that we've written to both the mortgage company and the secured lender and stated our position: we don't actually have any money - this is the problem. So it looks, at the moment, like stalemate.
Now, I don't like stalemate, it's not productive and just doesn't get anyone anywhere. So I got back to work and called the mortgage company and spoke to a girl called N. She explained that they had been awaiting my call for a few months but that they had received the letter that I sent a few days ago, together with the keys to the house.
She carefully explained the process for what is termed a "Voluntary Surrender" and has arranged to send me some forms (oh, what joy! more forms!) to get the ball rolling on this. She has also explained that any money left after the house has sold and the mortgage has been settled will go to the loan from "2". If there's any money left after that (like that's going to happen!), then this will be returned to our bankrupcy estate for the settlement of other outstanding debts. If, however, there is any shortfall, we remain liable for the full repayment of this shortfall until it's all been repaid. I'm happy with that - it makes sense to me.
So, that is the latest. Not much has moved and we're now awaiting the "Voluntary Surrender" forms from the mortgage provider. No word from the bank at the moment, but I daresay they won't be far behind! The bankrupcy petition is on-course for being filed in the coming weeks, then the real hard-work begins.
I'll get another post put on shortly to bring the situation up to date. In the meantime, as always, if you have any constructive advice, please leave me a message.
Back to you soon.
Bankrupt247
]]>Given that we’re already deep in the mire, financially speaking, I will keep this anonymous for fear of libel charges from my creditors. I’m sure that you understand that, now that we’re in a hole, we’d rather try to get out of it than continue digging.
By the way if anyone has any constructive advice (as opposed to critical comments), please feel free to leave some feedback – I’d love to know what you think! Please don’t misunderstand me - I’m not fishing for sympathy at all – this is our mess and we fully understand that. What I’m doing here is writing a blog (my first-ever, by the way) so that I can talk-my way through the stress of what we’re going through (if that makes sense?).
OK – so on to it. To put you in the picture, I am 36 and work full time for a reasonable wage of around £20k. My wife is also working full time, earning around £8k. I also have a second job which earns around £2k. We’re normal people who have never been extravagant and do not have expensive tastes.
Going back a couple of years, our income was about £7k more than it is now and with both of us being in secure jobs, buying a house seemed like the most sensible thing to do. The way that we thought was that, rather than paying-off someone else’s mortgage, why not pay-off our own and have something to show for it at the end.
So we did. We arranged a mortgage, saw a house that we really liked and bought it. Easy-peesy. Things went well for about the first 8 months and then my wife was made redundant as the result of a takeover at her work. OK, no biggy – we’ll just get on and find her another job. How difficult can it be?
Job applications went out every day - she even got some interviews. Things were going to be OK, like I say – no biggy. But then the letters of failure or non-acceptance began to arrive and eventually the opportunities in our area dried-up.
Then, about 4 months after the redundancy, my brother-in-law offered her a job. It was mind-numbing and for minimum wage, but it was a job. Great! Things were going to be OK.
So, after a month the pay packets started to roll-in, but they were not as high as we had been used to. OK, so we re-assess what we’re spending our money on, adjust what we can and keep going. No big deal.
Our first mistake here, I think with hindsight, was relying on credit cards to live – getting things like the weekly shopping, repairing the car, fixing the boiler, etc. We maxed-out all of our credit cards and, surprise-surprise, struggled to make the monthly payments.
OK – so find a way out of this, we thought. Amalgamation loan. That’s the answer! We phoned around and were refused by several companies until we were advised to speak to a specialist secured-loan company. Just so that I don’t have to keep referring to them as the secured-loan company, I’m just going to refer to them from here as “2”.
We added all of our outstanding credit together and agreed to the loan, which was secured on the house. No problem – we’re still working and can easily afford the payments that they’re asking for. This, I can see now, was our second mistake.
Things were great – we had our quiet lives back without the fear of being pursued by creditors. All was roses!
Back in the Feb of last year – about 5 months after my wife started working again, she was taken ill and spent a week in hospital and another two weeks recovering. During this time, because she hadn’t been at work, she had no pay. Shortly afterwards, we were prevailed-upon to finance the relocation of one of my children from my previous relationship, which set our finances back even further. Mistake no 3 is coming up and, yup, you guessed it – we began to rely on the credit cards and overdrafts again. Before we knew it we were maxed to the hilt.
Then in the first quarter of this year, we found out that we have another addition to our family on the way – due at the back-end of the year. Wonderful news but how are we going to be able to afford this?
So, this is the position as it stands now.
We’re broke. Completely. Not a pot to piss-in, if you will. Don’t get me wrong, we can just about afford to eat and have one very-carefully managed night-out a month but we have no spare cash at all.
So, taking all of this into account, we arranged to sit down with a financial adviser – one that we’d been put in touch with by the Citizen’s Advice Bureau.
K was very nice and not-at-all judgemental, although she had every right to be. We were truly ashamed of our predicament and felt that everyone else in the whole world would be judging us if they knew what we knew.
I think that we were in there about five minutes and had laid the nuts-and-bolts of what we earned and what we owed (which totals around £60k without the mortgage and secured loan), when she looked us straight in the eyes and said one word.
“Bankruptcy”.
She explained broadly what it entails and the restrictions and sent us on our way with instructions as to how to process this bankruptcy.
When we got to the front of the building, my wife and I sat down. It was like someone had just come along and lifted the weight from our shoulders, given us the winning lottery numbers and slapped us with a wet fish all in one. We couldn’t take it in. Was it really as simple as going to court, putting the same information in front of a judge and walking away? It can’t be, there’s got to be a catch.
So, we came home and read through the information that K had given us. It was going to mean that we’d lose our home, but we were prepared for that. It also means, amongst other things, that we couldn’t apply for credit of more than £750, couldn’t re-apply for a mortgage for 6 years and that all of our assets become the property of the Official Receiver. Oh, and they freeze your bank accounts, not that that’s a real concern to us right now! It sounded like a plan, so we went for it.
The next three weeks were spent trying to find somewhere else to live, packing all our gear and moving. K had advised us not to pay any more money to anyone and we were delighted to comply.
A new start (with a lot of mess behind, that we still have to sort out) – great! Just what we need.
So here we are, desparately trying to save the money that you need to declare yourself bankrupt (I know – it doesn’t make sense, does it? You have no money but you need money to tell your creditors that you don’t’ have any money! You can tell that the government’s involved with this somewhere, can’t you!) We’re aiming to process the bankruptcy petition in about 6 weeks time, hopefully. We’re trying to get gear together for the baby – just basic stuff like clothes and nappies, etc, and still being hounded by our creditors.
We have sent letters today to both the mortgage company and “2” telling them that we have surrendered the house and returning the keys and we are awaiting their wrath on that one. No doubt, another court appearance will come from that, where they will continue to claim money that we don’t have. We shall see!
Anyway, like I said right back at the beginning of this diatribe, I hope that this will be the first of many progress updates on our situation.
Look forward to hearing any constructive advice from you.
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