Repossession Help

Jelly_Belly_2

I really need some advice!!

A bit of background...

My Self and my now ex-husband bought a property back in September 2007 for £128500(great timing huh!) on a 95% Mortgage. We split up 6 months later both moved out (I moved back to my home town and he went to university) we tried to sell the property (again great timing!!) with no luck. I continued to pay for half the mortgage but then as my ex decided to go to university he stopped all mortgage contributions. Not being able to keep the mortgage up to date on my own or sell the property it seemed like throwing money down the drain so took the decision to stop my payments also (this was December last year)

The mortgage company have recently written advising that they will Repossess the property. The outstanding amount currently stands at £129000

I have just a few questions, if anyone can help

1. Is it best to hand the keys back as a voluntary repossession so not to incur any court costs? (seems silly fighting the inevitable). I don’t have to worry about being re-housed as I am now living with my new partner.

2. I imagine the shortfall will be fairly large, and I have no idea how I am ever going to be able to pay it back. Is it best to try and come to some sort of deal with them? Or should I declare bankruptcy? I'm 25 so a little concerned about how this is going to effect my life in the long term.

3. How will my new partner be affected by all of this? He owns his own home (although with the house market crash there is now very little of no equity left) although we live together our finances are totally separate ie no joint bank accounts etc...

I know I need to get some independent advice, and that’s next on my list of things to do – I was just sitting at work with all these questions running through my head, so thought I’d see if anyone could help.

Thank you so much in advance!

silvercar

1. you may as well hand the keys in, if you can't sell. Your ex will have to agree to this.

2. usually they leave you for a while to get your finances in order, then they chase you both and will gofor whoever seems to have spare cash or both of you. They will want a repayment plan, though they will usually settle for a one off sum.

3. Best to keep your fiances seperate. Theoretically it shouldn't effect a new partner.

Bankruptcy is a big step, but it means that the shortfall is written off for good. It would effect your credit rating for 6 years.

Radiantsoul

You might want to speak to the bank before handing in the keys and try and arrange a full and final settlement deal in return for giving up the keys. You will be in a slightly stronger position as they will want to avoid legal cost eating into their equity if the only other option is your bankruptcy. Plus they can still pursue your ex...

poppy10_2

You can't just hand they keys back - you are in negative equity, and are responsible for paying off the shortfall.

RufusA

Would be worth checking if the mortgage company had a Mortgage indemnity policy (likely with a 95% mortgage). This may complicate matters as you may need to negotiate with both the mortgage company AND the insurer for the shortfall.

Sadly bankruptcy doesn't automatically wipe the debts clean. If you have a steady income it may be decided that the income will be used to reduce the debts over a lengthy period of time. So you could end up repaying the full debt and taking years to discharge your bankruptcy.

Sorry!

I would as suggested get advice ASAP. The CAB may be a good starting point or the national debtline. You will also need to discuss the situation with your ex, as negotiation will be joint!

Rufus.