quick question

mother_hen_2

We are in negative equity by about £30,000 and considering BR was hoping to keep the house but just realised.. we have a large secured loan on the property.. would Northern Rock demand we sell the property if we went BR and what happens with the secured loan?

peachyprice

Hi MH, if you want to keep the house you have to be able to pay the mortgage and secured loan, secured lending isn't included in bankruptcy.

NR can't force you to sell the house unless you default.

Also, if the secured loan and mortgage payments together are many hundreds more than a rental property in your area the OR could ask you to leave the property, although it's more unlikely to do this to a family.

mother_hen_2

thanks peachyprice... looks like back to the IVA route for us then, but thats ok assuming they accept our proposal of course..

peachyprice

MH, I don't beleive the secured loan can be included in an IVA either, so you wouls still have to pay your mortgage, secured loan and IVA payments.

haddit

Hi Mh

I am in a similar position. You say you have 30K of equity but how do you know this in the current climate? It is possible that you can still go the BR route and keep the home if you can 'achieve' less equity. It may be an idea to get 3 agents to value for a quick sell or a surveyor (they always value less than agents !)
My situ is the house is on the market and I have dropped the price by 85K and still cant sell. I have dropped it down to a price which is less than I paid for it in 2005 ! I am purely keeping it on the market now until I go Br in January to show that even at this low value it will not sell. This then reduces the equity to a level that hopefully the OR will not have interest in. So the price drop is more a strategic move than a serious attempt to sell it ! In addition I have negotiated reduced payments on the mortgage for 3 months - which again adds further debt onto the house and less equity again.

Just hope no one seriusly wants to buy it in next couple of months at theat crazy price ! If so I must remember to tell them about the horrid neighbours and problems with parking and the leakly roof !!

Just an idea.........

mother_hen_2

lol haddit I like your approach....
I'm not £30, in equity but 'negative equity' I have had 2 independent estate agents around this week and given me written quotations. I think our issue will be the mortgage payments and secured loans that add up to about £1,800 a month pay back.. we could probably rent for less than that therefore the OR may make us try and sell to release those funds... but given we are in negative equity surely, the OR forcing us to sell to would be placing us into debt again... as the house sale would not cover the secured loan and the mortgage - can they really do that?

messimoney

If you plan to go bankrupt you may as well stop paying the mortgage so either the house gets reposessed or voluntary repo the house, if theres no equity in the house the SL would become unsecure and would be written off in the BR. I think thats right, thats the advice I ve been given and the route we are on our way down. Someone a bit more helpful may be along soon.
If you have a SL its a case of loose both the SL and mortgage or keep them both Im afraid.

peachyprice

If they force you to sell any shortfall on the mortgage and secured loan would then fall into your BR.

Would it costs hundreds and hundreds less to rent? It would have to be a big difference to make you move out.

They rarely do it, but it is something you need to be aware of there being a remote possibility of happening. The reasoning behind it is if they force you into rented it leaves more money for them to take for an IPA.

However, if a family is involved they would usually leave you in your house for a minimum of 12 months, by which time you would be discharged and they couldn't start an IPA anyway.

If they did bring it up before discharge and ask for you to look for alternative accomodation it could take a very long time for you to find somewhere where the landlord would accept BR's;)

haddit

Sorry MH, misread the bit about being in negative equity. Your approach makes perfect sense. So i guess its time to stop paying the mortgage for you then.

Good Luck

mother_hen_2

mm still not sure, we don't have any dependents - except the animals therefore, the may force us to move... really was hoping to stay in the house we have got into so much debt for!...

Rylynn

Haddit I really must come round and view your house I really am looking for a bargain, and yours sounds absolutely perfect for me!