Bankruptcy/IVA - anyone done it?
Discussion
I'm married with lovely kids. Things have been tight/stressful for the last 6-8 months. Typical story of over confident hubris developing nice houses.
In a relatively large hole with the the family house on the line if we chuck in the towel.
With help from family, we are able to service the debt for another 18-months to two years.
The recent drop in interest rates will help by over £1500/month - but it is still a huge mountain to climb.
LTV is so high (now) that bank could call in ££££ to get it to 80% across the board.
No city centre flats, just good family homes in good areas - but missed the market by a few months. The developments were never modelled for rental, so though we are renting half of the properties (bringing in £5k/month) and pull in £5k net wages, we are still well short (hence help from the family).
How have those who have gone bankrupt finally made the decision? If it was just me, it would be a no brainer- I'd do it and start again concentrating on my work and being happy with what I have there. We've really tried hard to make it through and, unless the bank pulls out, can do so until about May 2010 - but that assumes no sudden rise in interest rates, no sudden drops in rental rates or voids.
So, do we throw in the towel?
In a relatively large hole with the the family house on the line if we chuck in the towel.
With help from family, we are able to service the debt for another 18-months to two years.
The recent drop in interest rates will help by over £1500/month - but it is still a huge mountain to climb.
LTV is so high (now) that bank could call in ££££ to get it to 80% across the board.
No city centre flats, just good family homes in good areas - but missed the market by a few months. The developments were never modelled for rental, so though we are renting half of the properties (bringing in £5k/month) and pull in £5k net wages, we are still well short (hence help from the family).
How have those who have gone bankrupt finally made the decision? If it was just me, it would be a no brainer- I'd do it and start again concentrating on my work and being happy with what I have there. We've really tried hard to make it through and, unless the bank pulls out, can do so until about May 2010 - but that assumes no sudden rise in interest rates, no sudden drops in rental rates or voids.
So, do we throw in the towel?
Sorry you're having a tough time.
We struggled through a huge financial hole that started four years ago, we paid everything and are now back on our feet (except I'll potentially be made redundant next year
) but I do sometimes wonder whether we'd have been better with OH going bankrupt early on. I know they'll be people saying "you borrowed it you should pay it" and I agree with this entirely but it doesn't seem to stop vast numbers of other folk cutting their losses and starting afresh.
What I did learn was that when you're in a hole, it's easy to be very optimistic about managing your way out of it, it's also difficult with hindsight to justify borrowing money (your family propping you up?) which is just servicing debt.
Get yourself some advice from the CAB or one of the charitable debt counselling services. I really hope you get through this OK.
We struggled through a huge financial hole that started four years ago, we paid everything and are now back on our feet (except I'll potentially be made redundant next year
) but I do sometimes wonder whether we'd have been better with OH going bankrupt early on. I know they'll be people saying "you borrowed it you should pay it" and I agree with this entirely but it doesn't seem to stop vast numbers of other folk cutting their losses and starting afresh. What I did learn was that when you're in a hole, it's easy to be very optimistic about managing your way out of it, it's also difficult with hindsight to justify borrowing money (your family propping you up?) which is just servicing debt.
Get yourself some advice from the CAB or one of the charitable debt counselling services. I really hope you get through this OK.
We have had personal banker in - has been advising us for 15+ years. He looked at property values vs debts and suggested we carry on.
I have had others say 'it's just all liabilities, there's no shame in going bankrupt' etc
We pull in over £5k/month in wages, have cut everything to the bone (my only spend is petrol to and from work for example.) Been making my own packed lunches for the last 3 months, haven't had a meal out for 3 months etc etc.
Not taking the piss at all. Wife is unsurprisingly gutted that everything we put up with and built up from our first little 2 bed terrace is gone.
The strategy is to try to sell two if we can get them gone - but in this market it will need bank approval as they are so close to 98% ltv on those properties. All the security (from banks POV) is in the family home. But in this market, if the bank pushed the button I reckon they'd lose if they 'firesaled' them via auction.
We are trying to manage a controlled exit/rental strategy. If prices have stabilsied at peak - 25% by end of 2010 we will save the house. The houses are all in areas where they are not being hit as hard as city centre junk - but until there are green shoots nobody is really buying.
I think if bank calls in money, my only response will be aggressive... "We are servicing the debt and can do for 18 months, so f
k off..."
Thanks for the support.
I am aware that there will be some who think I deserve it - 'I' may, but wife and kids don't deserve it. Even then, I don't think I 'deserve' it. I wasn't just flipping city flats, or even trying to flip on the market rising. All my projects would have returned enough had the market not 'frozen'. Now, 12 months since the first tremors were felt there is still littel lending and price confidence has plummeted.
bks.
I have had others say 'it's just all liabilities, there's no shame in going bankrupt' etc
We pull in over £5k/month in wages, have cut everything to the bone (my only spend is petrol to and from work for example.) Been making my own packed lunches for the last 3 months, haven't had a meal out for 3 months etc etc.
Not taking the piss at all. Wife is unsurprisingly gutted that everything we put up with and built up from our first little 2 bed terrace is gone.
The strategy is to try to sell two if we can get them gone - but in this market it will need bank approval as they are so close to 98% ltv on those properties. All the security (from banks POV) is in the family home. But in this market, if the bank pushed the button I reckon they'd lose if they 'firesaled' them via auction.
We are trying to manage a controlled exit/rental strategy. If prices have stabilsied at peak - 25% by end of 2010 we will save the house. The houses are all in areas where they are not being hit as hard as city centre junk - but until there are green shoots nobody is really buying.
I think if bank calls in money, my only response will be aggressive... "We are servicing the debt and can do for 18 months, so f
k off..."Thanks for the support.
I am aware that there will be some who think I deserve it - 'I' may, but wife and kids don't deserve it. Even then, I don't think I 'deserve' it. I wasn't just flipping city flats, or even trying to flip on the market rising. All my projects would have returned enough had the market not 'frozen'. Now, 12 months since the first tremors were felt there is still littel lending and price confidence has plummeted.
b
ks.Let me get this straight.
You have been re-mortgaging properties on the back of price rises to buy more properties, but didn't think of what could happen if the interest rate went up or the housing market stalled or began to fall?
You've been watching too many TV programmes and have been hypnotised by Sarah Beeney's assets.....
It was bloody obvious that the bubble would burst at some point and leave people totally unable to service their debts.
You have been re-mortgaging properties on the back of price rises to buy more properties, but didn't think of what could happen if the interest rate went up or the housing market stalled or began to fall?
You've been watching too many TV programmes and have been hypnotised by Sarah Beeney's assets.....
It was bloody obvious that the bubble would burst at some point and leave people totally unable to service their debts.
NotHappy said:
We have had personal banker in - has been advising us for 15+ years. He looked at property values vs debts and suggested we carry on.
I have had others say 'it's just all liabilities, there's no shame in going bankrupt' etc
We pull in over £5k/month in wages, have cut everything to the bone (my only spend is petrol to and from work for example.) Been making my own packed lunches for the last 3 months, haven't had a meal out for 3 months etc etc.
Not taking the piss at all. Wife is unsurprisingly gutted that everything we put up with and built up from our first little 2 bed terrace is gone.
The strategy is to try to sell two if we can get them gone - but in this market it will need bank approval as they are so close to 98% ltv on those properties. All the security (from banks POV) is in the family home. But in this market, if the bank pushed the button I reckon they'd lose if they 'firesaled' them via auction.
We are trying to manage a controlled exit/rental strategy. If prices have stabilsied at peak - 25% by end of 2010 we will save the house. The houses are all in areas where they are not being hit as hard as city centre junk - but until there are green shoots nobody is really buying.
I think if bank calls in money, my only response will be aggressive... "We are servicing the debt and can do for 18 months, so fk off..."
Thanks for the support.
I am aware that there will be some who think I deserve it - 'I' may, but wife and kids don't deserve it. Even then, I don't think I 'deserve' it. I wasn't just flipping city flats, or even trying to flip on the market rising. All my projects would have returned enough had the market not 'frozen'. Now, 12 months since the first tremors were felt there is still littel lending and price confidence has plummeted.
bks.
1) Relax, and ignore anyone who gloats, In America the culture is rightly different and no one would look down on you if the worse did happen. Better to try and fail then be too scared to ever try like most. Many have failed several times and then used this experience to succeed later.I have had others say 'it's just all liabilities, there's no shame in going bankrupt' etc
We pull in over £5k/month in wages, have cut everything to the bone (my only spend is petrol to and from work for example.) Been making my own packed lunches for the last 3 months, haven't had a meal out for 3 months etc etc.
Not taking the piss at all. Wife is unsurprisingly gutted that everything we put up with and built up from our first little 2 bed terrace is gone.
The strategy is to try to sell two if we can get them gone - but in this market it will need bank approval as they are so close to 98% ltv on those properties. All the security (from banks POV) is in the family home. But in this market, if the bank pushed the button I reckon they'd lose if they 'firesaled' them via auction.
We are trying to manage a controlled exit/rental strategy. If prices have stabilsied at peak - 25% by end of 2010 we will save the house. The houses are all in areas where they are not being hit as hard as city centre junk - but until there are green shoots nobody is really buying.
I think if bank calls in money, my only response will be aggressive... "We are servicing the debt and can do for 18 months, so f
k off..."Thanks for the support.
I am aware that there will be some who think I deserve it - 'I' may, but wife and kids don't deserve it. Even then, I don't think I 'deserve' it. I wasn't just flipping city flats, or even trying to flip on the market rising. All my projects would have returned enough had the market not 'frozen'. Now, 12 months since the first tremors were felt there is still littel lending and price confidence has plummeted.
b
ks.2) Be nice as possible to the bank, dont piss them off. Polite but firm if needed. Try to get advise form your side eg your Accountant/independent business enterprise help etc as the bank will look at it purely from their own angle.
3) If you do go bancrupt after doing your best dont think "I borrowed so should have paid back", its business and you have to do whats right for you, the bank lent to you after taking into the risk of default.
4) Pay special attention to your wife, the stress will take its toll and you dont want to lose her.
5) dont borrow too much off family, last thing you want is to lose their money.
6) dont get emotional. do what makes business sense. Dont drag it out if deep inside you know its not going to happen. Dont let pride/what others think come into it. Your true friends will stand by you
Edited by amir_j on Saturday 29th November 14:23
Alfa_75_Steve said:
Let me get this straight.
You have been re-mortgaging properties on the back of price rises to buy more properties, but didn't think of what could happen if the interest rate went up or the housing market stalled or began to fall?
You've been watching too many TV programmes and have been hypnotised by Sarah Beeney's assets.....
It was bloody obvious that the bubble would burst at some point and leave people totally unable to service their debts.
No, I didn't do this. I developed a coupled of properties, sold them, etc ect. Thought I could manage the builds while doing my job - mistake #1. Jobs came in on £££ budget but behind time. Miss the market and have too many.You have been re-mortgaging properties on the back of price rises to buy more properties, but didn't think of what could happen if the interest rate went up or the housing market stalled or began to fall?
You've been watching too many TV programmes and have been hypnotised by Sarah Beeney's assets.....
It was bloody obvious that the bubble would burst at some point and leave people totally unable to service their debts.
But thanks for your input.
How's the job hunt going?
MikeyT said:
How many properties do you own out of interest?
'only' four plus the family house. Family house rented out earlier this year. One development rented until August 2009 minimum - but this was refurbed to sell.
Now living in project 4 - refurbed to family house and will rent or sell.
Frustrated that I have made a couple of small errors in timing/chioce of builders which will cost me everything.
Had I been 'greedier' I would probably not taken the last one on as margins weren't fantastic - but hte building was lovely in a great spot.
In it now though.
Well, you have my sympathies and I hope everything turns out for the best in the long run ...
You need the comments of someone who has done it or someone in a more professional capacity
Tonker!
You need the comments of someone who has done it or someone in a more professional capacity
Tonker!Hopefully as it's the weekend he won't be too harsh and Bolton are mid-table now so he may be in a good frame of mind
You saw a few programmes on telly, were taken in by the promise of being a millionaire property developer.....
And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the ste.
I'll be fine, as I was careful whilst the markets were rising and engineered a debt free life out of it.
Job hunting is going fine, BTW, but no panic for at least another 12 months.
And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the s
te.I'll be fine, as I was careful whilst the markets were rising and engineered a debt free life out of it.
Job hunting is going fine, BTW, but no panic for at least another 12 months.
Alfa_75_Steve said:
You saw a few programmes on telly, were taken in by the promise of being a millionaire property developer.....
And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the ste.
I'll be fine, as I was careful whilst the markets were rising and engineered a debt free life out of it.
Job hunting is going fine, BTW, but no panic for at least another 12 months.
don't pat yourself on the back too hard will you !And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the s
te.I'll be fine, as I was careful whilst the markets were rising and engineered a debt free life out of it.
Job hunting is going fine, BTW, but no panic for at least another 12 months.
Alfa_75_Steve said:
You saw a few programmes on telly, were taken in by the promise of being a millionaire property developer.....
And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the ste.
I'll be fine, as I was careful whilst the markets were rising and engineered a debt free life out of it.
Job hunting is going fine, BTW, but no panic for at least another 12 months.
What a self important take on the developers worst nightmare. Do you have any words of wisdom for Barrat or TaylorWimpey who seem to have done exactly the same as this fella but in a slightly larger way And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the s
te.I'll be fine, as I was careful whilst the markets were rising and engineered a debt free life out of it.
Job hunting is going fine, BTW, but no panic for at least another 12 months.
NotHappy said:
islamist said:
Have you tried ebay?
Not sure I can use paypal for a £650k house sale.How good are your agents?
From what you've said the mortgages are variable, so do you need to sell everything to get back on an even keel?
The emotion is the killer. The family house is very special and the only thing we are interested in 'saving'. If it wasn't for that, we'd have taken the view a long time ago to wrao it up and start over. The banks have had a huge amount from me in fees and interest, so I really would not lose a wink of sleep on that score. All the tradesmen are paid up - they're the only ones I'm interested in seeing right.
RE: Scotal, the only things not rented are on the market, but I have a problem with the builders on one. The houses have been 97% finished for the last few months, but we had hude trouble with incoming services.
Thanks for the support. Thanks for the gloating Alfa Steve - I can see the point behind it. Well done on being debt free and timing your life choices well. Many others are also in your position. Many are in mine.
AS said, the really big developers were taken by surprise, so I'm not sure I could have avoided it easily anyway.
RE: Scotal, the only things not rented are on the market, but I have a problem with the builders on one. The houses have been 97% finished for the last few months, but we had hude trouble with incoming services.
Thanks for the support. Thanks for the gloating Alfa Steve - I can see the point behind it. Well done on being debt free and timing your life choices well. Many others are also in your position. Many are in mine.
AS said, the really big developers were taken by surprise, so I'm not sure I could have avoided it easily anyway.
swerni said:
Alfa_75_Steve said:
Let me get this straight.
You have been re-mortgaging properties on the back of price rises to buy more properties, but didn't think of what could happen if the interest rate went up or the housing market stalled or began to fall?
You've been watching too many TV programmes and have been hypnotised by Sarah Beeney's assets.....
It was bloody obvious that the bubble would burst at some point and leave people totally unable to service their debts.
you really are a c0ck aren't you.You have been re-mortgaging properties on the back of price rises to buy more properties, but didn't think of what could happen if the interest rate went up or the housing market stalled or began to fall?
You've been watching too many TV programmes and have been hypnotised by Sarah Beeney's assets.....
It was bloody obvious that the bubble would burst at some point and leave people totally unable to service their debts.
If you were this inspirational as a sales manager I can see why you're unemployed.
It's not difficult being debt free when you drive a cheap crappy car and live in the arse end of beyond.
The OP wasn't asking for sympathy.
k 
Alfa_75_Steve said:
You saw a few programmes on telly, were taken in by the promise of being a millionaire property developer.....
And are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the ste.
What a quite epically tAnd are now looking at trying to walk away from your debts.
Yet we wonder why the country is in the s
te.ttish thing to say.People all over the country find themselves in a position such as the unfortunate one NotHappy finds himself in, largely through no fault of their own, from property developers to retailers to service company employees. This touches everyone and without people willing to undertake the endeavour of attempting to do better for them and theirs this country would be in a lot worse state than it is.
Nothappy have you considered hawking all the properties as a job lot just to get rid of the exposure? Even if its a small hit on build cost its got to be better than the worry and pressure you're currently under.
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