Vol Repo V selling yourself?

smiales

I would love to feel smug but BR rips any of those feelings out of you!

dodecanese

Hi Smiales
Thanks for posting this up- Im hoping to hang onto house but its neg equity/big mortgage and I do worry about it.
(I was told by the IS that any shortfall went into the bankruptcy, even after discharge but he seemed to think that if I 1. bought the BI or 2. the OR handed property back after the 3 years then I was liable again.)

This is really interesting- thanks

smiales

Sorry that was very negative, BR isn't that bad compared to debt!!!

RichOneday_2

smiales wrote: »

Sorry that was very negative, BR isn't that bad compared to debt!!!

I'd always rather lend to a discharged bankrupt than an average person in the street as the BR experience gives a very firm footing for future financial dealings.

smiales

dodecanese wrote: »

Hi Smiales
Thanks for posting this up- Im hoping to hang onto house but its neg equity/big mortgage and I do worry about it.
(I was told by the IS that any shortfall went into the bankruptcy, even after discharge but he seemed to think that if I 1. bought the BI or 2. the OR handed property back after the 3 years then I was liable again.)

This is really interesting- thanks

Funnily enough I rang the IS and got a straight "No if you bought BI its your problem", then when we looked into it in writing the situation changed. Basically push them for answers and get it in writing because they are more likely to make sure they think about what they are saying. I haven't included it on the emails but there is actually a name with the email so it really would come back on someone if it turns out to be wrong. Although I doubt that if its wrong it would actually mean I didn't end up paying the shortfall - I'm sure they would find a way round it. Legally i don't know if the email bears any weight? I imagine not, never does when you want it too!

I wish we hadn't bought the flippin BI, at the time we thought it was the 'safest' thing to do, we didn't think it through.

RichOneday_2

You've thought it through now and maybe helped several people as a result.

Thats if, as you say, it all pans out as the IS manadarin says.

dalip

Fair play to you,this would appear to be a loophole. Please keep us informed of all the goings on with this smiales.Good luck.D

Richard_S

Hi Smiales,

You already know my thoughts on how any shortfall will be treated so no point going over well trodden ground.

As for Voluntary Repossession or Selling Yourself, then there's absolutely no doubt in my mind. I can't think of any good reason to go the Vol Repo route; it's fraught with nasty little clauses that could cause no end of trouble.

Just stop paying the mortgage, which you have, and wait for them to repossess the house. It'll take a minimum of 6 months, and probably closer to a year, and all that time you're living rent / mortgage free.

Try your best to sell the house, and co-operate with the bank / building society. Any selling or legal fees will be taken out of the sale proceeds, and will just increase the shortfall, which I believe will be included in your bankruptcy.

If it takes 6 months to sell the house, and assuming your mortgage is £700 pcm then you'll have saved close to £5k. If it takes longer to sell the house, which it almost definitely will, and your mortgage is more than £700 pcm, then you're looking at quite a sizeable lump sum to put down on a rented property.

Having a house repossessed may well make it more difficult to get a mortgage in the future, but who knows where the housing market or mortgage criteria will be in five years time?

It's certainly a risk that I'd be prepared to take.

Rich

smiales

Richard_S wrote: »

Hi Smiales,

You already know my thoughts on how any shortfall will be treated so no point going over well trodden ground.

As for Voluntary Repossession or Selling Yourself, then there's absolutely no doubt in my mind. I can't think of any good reason to go the Vol Repo route; it's fraught with nasty little clauses that could cause no end of trouble.

Just stop paying the mortgage, which you have, and wait for them to repossess the house. It'll take a minimum of 6 months, and probably closer to a year, and all that time you're living rent / mortgage free.

Try your best to sell the house, and co-operate with the bank / building society. Any selling or legal fees will be taken out of the sale proceeds, and will just increase the shortfall, which I believe will be included in your bankruptcy.

If it takes 6 months to sell the house, and assuming your mortgage is £700 pcm then you'll have saved close to £5k. If it takes longer to sell the house, which it almost definitely will, and your mortgage is more than £700 pcm, then you're looking at quite a sizeable lump sum to put down on a rented property.

Having a house repossessed may well make it more difficult to get a mortgage in the future, but who knows where the housing market or mortgage criteria will be in five years time?

It's certainly a risk that I'd be prepared to take.

Rich

Is it the case though that if I am in negative equity I wdn't be able to sell it myself because the 1st charge, mortgage, wouldn't be covered? Or is that irrelevant in my case?

I agree that selling it ourselves would be better on the basis that no one wants to go through vol repo, it would be nice to think that we did what we could so that if we do want a mortgage in the future we may be more likely to get one. But then thats way into the future and god knows what mighthappen between now and then.

I think I'm stresing myself out more and more these days, too many decisions.

RichOneday_2

If in negative equity you can sell yourself but you wouldn't be able to accept an offer until you had the agreement of the lender. The terminology is something like ' you can't enter in to a legal contract that you had no ability to complete'.

But why would you bother?

On a practical basis what is the difference? You will ultimately receive a date on which you have to move out. In some ways repossession is much less stressful because it is definite rather than all the last minute ifs and buts about whether a sale is going to complete.

In terms of future mortgages a repossession is not going to do you any harm when there is already a bankruptcy on the record, so again why go to the effort and expense of selling yourself?