Handing back the keys to the lender?

Radiantsoul

1. Speak to the mortgage company and explain the situation.
2. Continue to make all payment you can and prioritise it over non-secured debt.
3. Get transferred to their recoveries department.
4. Try and negotiate a full and final settlement whereby you agree to fix a certain sum and right off the rest. I would say the sale proceeds plus another thousand or so.
5. Agree to let the bank liaise with your solicitor to confirm the price is fair.

The only reason why letting the bank repossess is good is that it makes it easier for the council to rehouse you.

As to bankruptcy your actual debts are relatively small at this stage so I would advise against it.

Ember999

Radiantsoul wrote: »

This won't work.

The house is jointly owned and so both parties need to agree to a sale(and sign the agreement). In addition the mortgage is joint and so both parties are liable for the whole mortgage. The mortgage company will not remove one person from the mortgage deed without a substantial capital repayment(why should they?) Even if they did it would remove the interest in the debt but not the property.

Paying the mortgage will not give any greater legal interest in the house. It might increase the equitable interest, but only to the extent of capital repayments and not interest. Besides only a court could decide that. Additionally the equity is so marginal it will not be confer much benefit.

Yes they will remove one party from a mortgage if the remaining party can pay the mortgage solely. She would be removed from the mortgage and he would pay a fee to get her removed from the deeds. I know this is and can be done.

Radiantsoul

Ember999 wrote: »

Yes they will remove one party from a mortgage if the remaining party can pay the mortgage solely. She would be removed from the mortgage and he would pay a fee to get her removed from the deeds. I know this is and can be done.

Only if there is equity in the property; otherwise they won't.

The bank is keen on being repaid and currently has three options; Person A, Person B and the equity in the property. They will not surrender the right to pursue Person B if they are not sure that the equity in the property and Person A can collectively repay them. In this case they clearly can't.

It can technically be done(I believe all you need is a TR1 form from the land registry), but the mortgage company must agree. And in this case they won't.