Handing back the keys

parisgirl

Hi All,

I was wondering if any of you could give me some advice. My Husband and i are struggling. Our house is worth approx £85k we have a mortgage and a secured loan on it. We owe approx £76k on the house and there are a few other smaller things that we owe. Our problem is my DH was off work for 2 years after falling and breaking his back and i was unable to go out and work as he needed 24 hr care, and we have no family around us to help. We got behind sriously with both of these and even went to court with it, the JP was very understanding and helped us come to some arrangement. I just cant see an end to this arrangement with the ever changing fees, so we tried to re mortgage to incorporate all the debt we owed, but cos our credit history is now shocking no-one will lend us any money. I have found us a house to rent that is less pcm than what we are already paying between the mort & sec loan. SO what we are thinking, is to hand the keys back, i understand that the house is generally sold at a lesser value and you still have to pay back what is owed, but will all parties be paid if there is enough to pay it off?? Also who do we actually hand the keys back to? Will this make us bankrupt or is that a totally different matter, i got a copy of our credit report and with everything we owe, it comes to £90k if the 2 sec loans are paid off (mort & sec) that would be a total of £76k could we then enter a debt management programme to pay everything else? I have put the house up for sale but the house market around here isnt moving so i honestly cant see any other way out of it..

Please Help.
Many Thanks

missile

Handing back the keys should be your last option, far better to slash the price and sell it. I would suggest you seek advice from CAB rather than getting sucked in by one of those debt management sharks.

lynzpower

Are you still unable to pay your mortgage now? Is your hubby now working ( unclear )

If you are both not working at the moment, can you ask for housing benefit to pay your interest on your mortgage?

parisgirl

Sorry i didnt make that clear, he is back at work full tim, although his job has changed therefore so has his wages, i only work part time as we have a 10 month old baby, (bad timing i know, but the best thing to have ever happened to us) so no housing benefit or the means, i just want rid of the house and its tight grip it has on us. If we sold it for less than what was owed how could we pay the shortfall? The same way as if we just handed the keys back cos i would rather do that....

Thanks

IHS88

Hi Parisgirl

I'm very sorry to hear about your circumstances, it must be exceptionally stressful, but lets see if we can find you away out.

My first thought was a sale and rent back with a reputable private property company. However, as your property is worth £85k, these companies would be offering you £65k approx which is below the total amount you owe.

Have you considered putting the property on the market? If you get close to the asking price of say £85k, this could clear your debts and maybe leave a little cash left over.
If a lender is threatening repossession but you are seen to be trying to sell the property, the lender will be more forgiving and offer you more time.

Lastly, the goverenemt made announcements yesturday with regards to helping those in distress in the housing market.
Local authorities will now be able to buy a stake in your house which would help you clear part of your loans. They may also be able to buy your property outright and allow you to rent it back at an affordable rate.

Please speak with the housing depertment at your local council. They will know the exact details of the government scheme and how it may help you.

There may just be a solution. Dont give up the keys just yet. Good luck!