Paragon secured loan crippling me, no equity - bankruptcy???

[007coot]

Hi,

 

Please can someone help me, I really cannot cope anymore and if I don't get help soon I think I'll have a nervous breakdown but I don't know which way to go or who to turn to for advice.

 

Here's a quick idea of my situation. I'm married with 3 kids, both myself and husband work, my job is not very well paid though as I have no qualifications to get a decent paid job.

 

My husband and I have unsecured debts of £41K between us. We also have a mortgage for £118K and a secured loan on top of that which was for £46K. Total debts around £200K.

 

We are paying all our unsecured debts off very slowly. The interest is frozen on them but as it's such a huge amount the balance isn't going down very quickly. Just this alone stresses me out, I know it's being paid but I can't see any end to it and that makes me feel ill. I don't want to live the rest of my life in so much debt.

 

My other worry is the mortgage of £118K and secured loan of £46K that we took out for refurb in 2005. The loan was for double glazing, loft conversion and drive. The secured loan is basically like a second mortgage and it is crippling us. So far I have paid them £38K in repayments over the 7 years but my balance is still £43K. I've basicall paid £35K in interest. I can't ever see this going down or being paid off ??? I just don't understand why the balance won't go down.

 

I had my house valued yesterday, I was hoping that we could sell, pay off mortgage and secured loan and then either one fo these two options:

 

a) be mortgage and secured loan free and rent somewhere saving us a few hundred pounds per month and not having to worry about property maintenance (things like heating, plumbing, roof tiles etc)

 

b) pay off secured loan and buy a small 1 bed flat as rental property to keep us on property ladder and rent somewhere for our family to live. The risk here being that we would need to ensure the flat was rented 12/12 to cover mortgage payments and also costs to maintain a rental investment.

 

c) see if any lender would be foolish enough to give us a higher mortgage to pay of secured loan and buy another house (I really can't stay in this house anymore so would definately need to move instead of remortgaging this one - I am too unhappy here. The area is getting rougher and rougher. We have prostitutes and drug addicts using the woodland area to do their deeds and there is nowhere safe for my kids to play, there aren't een any other children around for them to play with anymore)

 

I was devastated to be told that my house is worth £145K so I can't even sell up and pay off the mortgage and secured loan! I really don't know what to do. I just feel like I want to let them take the lot from me and go bankrupt becasue I see no toher way out! Please someone can you advise me how I can get out of this mess? If I didn't have the secured loan I could pay more off my unsecured debts to lower them. The secured loan is hundreds of puonds a month of pure interest! at least my unsecured creditors have all frozen interest so my balance does go down (although it is slow at moment)

I know I need to take responsibility for my debt but I feel like debt is ruining my life and I just wish I had been more aware of how quickly interest and charges can accumulate. I really feel like there is no way out of this mess.

 

Any advice would be greatly appreciated thank you.

[barbershop0]

Hi 007coot,

 

When you had your house valued did they give you any idea of how much you could get if you rented it out, either room by room or as a whole? If that covered the mortgage and secured loan & maintenance then maybe this could be an option. The mortgage company may want you to pay more interest, if you told them.

 

Last month I thought that I was losing my house and got some great advice from this sight. By coming on here at least you are taking responsiblity for your debts.

 

Have you approached your local council's housing officer to see if he can offer any assistance.

[007coot]

Hi Barbershop,

 

There is no way we could rent it, rental would be a max of £650 in this area and my secured loan repayments are £500, let alone the repayments on the mortgage. It would no where near cover it. My only option is to get rid of secured loan and that's what I'm trying to figure out how to do. I don't know if I could sell the house and just pay paragon what's left but then I would still owe them thousands so I wouldn't be able to afford to live anywhere else. even getting a few months at a reduced rate won't help. I can't continue paying two mortgages for the next 18 years. I feel like letting them take the lot and going bankrupt is my only choice and I don't want that. I can't even think straight at the moment. I need to wait until my husband gets home from working away and we need to go and see someone for advice, just don't know who? Solicitor? CAB? Financial advisor?

 

Thanks for advice,