Need to decide

A question about : Need to decide

Hi There,
I have quite a lot of debt and I have managed to get a re-mortgage. I have a problem because I can only get 65% of the value of my house. This leaves me slightly short of the funds I need to clear my debts. One of the debts is the Inland Revenue and I must clear this one no matter what. The other debt is owed to the bank from a failed business. The bank has a charge on the house, which I allowed them to put there, I am also paying Ј 250.00 p/m off the debt. They have also got a county court judgement covering the debt of Ј 40,000. I wanted to pay this debt off also but I do not have enough. Can any one offer some advice as to whether I could make a deal with them. Try to offer say 30,000 to clear the debt or do you think they would just wait as they have the upper hand.

I just don't want to take on all this extra payments on the remortgage and work like a dog and seem to have nothing to show for it.
By the way the debt to the bank was caused by an employee I trusted. I accept responsibilty, I will not run away and I want to pay the debt.

Any advice would be greatly appreciated.

Thank You,

Steve Wills.

Best answers:

• Hi Steve
  Firstly in the world of debt there are no heros so don't be one for someone else - especially someone who has, by the sounds of it, ruined things for you.
  If an employee has stolen money, committed fraud etc... or is answerable for something, GO AFTER THEM.
  Involve the police if you have to. Don't take responsibility for some one else's wrongdoings.
  You are right not to want to work with nothing to show for it at the end. Some debt is simply too high for you to ever be free. It could be that you 'might' be better off filing for bankrupcy.
  Before you do anything, get assessed at your local CAB. Take all your details of income and expenditure. They can assist you will making offers of full and final settlements to creditors and they can also advise you if what you are trying to do is workable.
• Hello Ice,
  Thanks for the reply.
  I did consider bankruptcy but I have a wife and kids and I do not want to lose the house. I have enough equity in the house to pay off the debts so this is what would happen if I was made bankrupt. Right?
  I am a proud man and I do not want to be a failure. I want to pay for my errors it is not the inland revenus fault or the banks fault so why should they lose out.
  I know it may be a bad attitude on my part but I try to live by a code.
  Best Regards,
  Steve Wills.
• Commendable attitude, I believe. But it may well be proper to try to recover damages from an employee, depending on circumstances.
  It sounds like a bankruptcy would cost you more than it would gain, given the amount of equity that you have.
  From what you said it sounds like the mortgage will let you pay Inland Revenue plus Ј30K of the Ј40K you owe the bank. If you do this, with the additional mortgage payment, will you still be able to afford the Ј250 per month off the debt, if they refuse to negotiate?
  You could offer them Ј20K immediately in full and final settlement. This gives you some room to maneuver or make counter offers if/when they say no. If they say no, you could ask what amount they would consider. You might be able to settle for somewhere between Ј25-30K if you have cash to give them now.
  It doesn't hurt to let them know that Inland Revenue wants money from you as well -- but not how much. That way, they will know that there are other people who have a claim on your assets, and maybe their position isn't quite as good as they think it is. It might make them a little more willing to negotiate. After all, if the Inland Revenue takes everything from you, they get nothing. Don't lie, but you can decide how much information you want to give them.
  I would think you should be able to at least reach some agreement where they take Ј30K in cash now and small payments (Ј50-100 / month) interest free on the final Ј10K. That is very painful to have to do that, but you'll be digging out.