The first of many questions - The House

peachyprice · 1 March 2008 at 8:35AM

Hi all, I've been reading this forum for a week or so now, this is my first post, so please be gentle with me.

Myself and my husband have decided to bite the bullet and go down the BR route, this really is all that is left for us now. I'm phoning the court on Monday to make our appointment, having spoken to a very nice man there yesterday it seems there's a 2 week waiting list so we should be on for w/c 17th March:eek:.

We have cc and od's totalling £45K between us, £1300 council tax arrears and are just going into the 2nd month of not paying our mortgage, so things are pretty bleak. I won't bore you with how we got here though!

Right on to my question, it's about the house.
It's worth about £170k, we have a mortgage of £129k ish, and a SL of £40K (Yes, consolidation that didn't work for us, we never should have listened, hey ho) Total payments are £1280, out of our income of £2880.

So onto scenario 1. When we are BR we will be in a position to carry on paying the mortgage and SL and £120 per month towards the arrears, although as the mortgage is with Hong Kong Shyster Bunch of C**** we'll probably have a fight on our hands to do this, but I'll happily take it to court. (I understand the OR might not allow this as payments would still be a large proportion of our income, but to rent in our area is very expensive, we're probably looking at £1k per month anyway.) And we'll all live happily ever after.

Second scenario, the OR says we can't keep the house. If that is the case how long will it take to be repossessed and what to we do. Can we stop paying the mortgage and SL to save for a deposit, or would the OR see that as irresponsible? It would take 5 months to save enough for a 6 month deposit, but would we have this long? Bearing in mind that we are 2 months in arrears, what happens on the 3rd missed payment, does it go to court the following month? And would we get more time by going for VR as opposed to defaulting?

I have no real attachment to the house, I just need to be able to keep a roof over my families house, we have 3 children, a dog, 2 cats, 2 goldfish and 2 gerbils, we don't really mind moving, we just don't want us to end up in a B&B somewhere because we won't have time to find a deposit. I have no family here so we cannot borrow, and H's parents are both pensioners living in a council house, so we couldn't have them as guarantors.

So thank you for reading if you've got this far, any thoughts, experiences, etc wold be most welcome.

tigerfeet2006 · 1 March 2008 at 10:59AM

Hi and welcome to the board. The first thing you really need to do is ring one of the debt charities and get professional advice. You will need to do this as the judge will ask you if you have and can delay your BR if you haven't. The numbers are in my sig.

I am afraid houses are not my thing but as you say with those repayments it is very possible the OR will not allow you to keep the house. Some one with more knowledge on houses will be along soon to help I am sure.

Mean while have a read of this thread

http://forums.moneysavingexpert.com/showthread.html?t=596237&highlight=scarlett+diary

maxmycardagain · 1 March 2008 at 11:02AM

Welcome aboard PP....

Not having gone BR yet and certainly not having any property (or any asset) ill leave it to others to give you more advice but you will have to speak to a debt advisory service soon for your own sakes.

I would say (with experience) that the house is, in reality, worth nothing to you if you go BR, and wont sell for market value as a repo, to be repossesed though your lenders need to get a possesion order (thats a couple of months) that an eviction order (another couple of month or more), in the mean time you will be not paying the mortgage, and (if needs be) applying to the council for housing

if you go BR you wont have any arrears, though council tax in the current year is not generally included in a BR.

good luck.

peachyprice · 1 March 2008 at 11:56AM

Thank you both for your replies, and warm welcome.

TF, my DH did phone CCCS a few weeks ago, when they established that BR was the best way forward, does this count as having sought advice, or will we need more before we actually go ahead? We didn't really think of specific questions at the time, and have only started looking into the ins and outs since.

I read scarletts diary yesterday, she sounds so happy now! I guess it would be easier if would could do it that way around but we really need to go BR ASAP, I'm dreading the council tax bailiffs coming back, thankfully I was out last time. I have written to the council offering payments, but I haven't heard back from them yet, so I don't know whether they've called the bailiffs off or not. We also need to do the deed before 2 charging orders are put on the house, incase we do stay.

MMC, that's the sort of timeline I was hoping to hear, I think that would just be do-able. But wouldn't the OR want the money we didn't pay for the mortgage and SL to pay off creditors as we're not using it for living expenses?

tigerfeet2006 · 1 March 2008 at 12:10PM

Well done on phoning CCCS, the judge will be happy with that. They have a BR support line so make good use of it.

Glad you got to read Scarletts diary as there is a lot of info on there even if you can't do as she did. You have obviously spent some time looking round the board which is brilliant. I hope we can help make the process as easy as possible for you.

debt_doctor · 1 March 2008 at 7:42PM

Hi,
you need to consider your options very carefully. If you stop paying the mort to save for a deposit then thats fine so long as it works out and you do find accomodation. If it doesnt and you try to obtain council accomodation then they may find you intentionally homeless.

I doubt that the OR would allow you to save for a deposit once BR so you would have to obtain the private rent before BR.

Contact Shelter regarding your options on housing. Also re this years council tax, the full bill becomes due 21 days after the first installment is missed, once this happens it is included in your BR.
Best

DD

maxmycardagain · 1 March 2008 at 9:12PM

a family relative went BR in august, their mortgage payments were to much for them to handle together with the rest of the debts.

they stopped paying the mortgage in in june, the possesion hearing was in november (they already had arrears) with the stipulated date to quit being december 23rd, but that still needed an eviction notice, they were housed by the LA 2 weeks ago and no eviction action for the old house has taken place yet.

the LA only needed to see the possession order

mind you, it is/was Northern Rock!

maxmycardagain · 1 March 2008 at 9:14PM

btw, if your income is almost £3000 you can expect a IPA thingy, how much will depend on your actual allowable living costs

peachyprice · 2 March 2008 at 11:05AM

Thanks for your replies.

DD, that's what I was thinking re not paying the mortgage after BR and saving it for a deposit, surely the OR might think I'm just peeing it up a wall, and would want it to pay creditors? Council tax arrears stared from May (a genuine mistake when we moved bank account that then got out of hand), they've already sent bailiffs round once, I've made an offer to pay arrears but haven't heard from them yet, hopefully that will hold bailiffs off until I go BR

One other Q, if the OR says we have to leave the house will be have time to sell it ourselves or will we be forced to take VR.

MMC, our disposalble income is £56, and that's after basic living costs, I haven't included holidays, haircuts, clothes for myself or stuff like that in our I&E cos we can't afford it.

bobblebot · 2 March 2008 at 11:47AM

Hya, 1st of all take a deep breath and just know it will all be ok-I'm living proof of that been in same position only difference is that I had no equity in my house.
With that much equity in your house the OR will want it and even if you could afford to buy the beneficial interest your mortgage payments are just too high anyway to realistically keep.
You have two, no three options.
1. You can sell and take the money to set your self up in a rental property with deposit etc and keep a little money to get yourself sorted before going BR. Write letters explaining financial situation to creditors it will take 6 months at least before they do anything giving you time to sell if market is good. Downfall a longer periopd for worry.
2. You can go BR now and wait for the mortgage compnay to repossess and don't make anymore payments on mortagge. This will take at least 6 months to happen and give you plenty time to get a deposit togther for a private rental.
3rd-what I did find a private rental (although you will need to get a deposit together ) but can take 3-4 months to do and then hand house back to mortgage company-voluntary repossession, its easy and less hassle and then you can get on with your life.
I am in a lovely house in lovely area now with garden, duck [pond to front, no debt, PT job and new baby-couldn't be happier.
Don't worry just weigh up your options and do what is best for you.
Good luck

debt_doctor · 2 March 2008 at 11:51AM

As I said earlier, the OR would not allow you to save for a deposit during your BR, He would expect you to follow the homeless legislation and attempt re housing by the council.

If you want to stop paying the mort to save for a deposit, you need to do this before BR.

Best

DD

The first of many questions - The House

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