Help needed - worried sick about all this !

caro50

Hi we are looking at going bankrupt within the next couple of months - just a few questions that I need answers to regarding our home -

we orginally took out a mortgage with northern rock on our house for £174k which we have increased over the past 2/3 years to £255k (think this is classed as a secure loan? We have always thought it was part of the mortgage. The house is now worth £235 - £240k . We also have a unsecured loan with northern rock of £27k Our fixed rate deal comes to an end in September next year and we are thinking of going bankrupt ASAP. We have never missed a payment on any of it and have never been late with a payment.

My questions are

1) Is the house in negative equity taking into account that the additional borrowing may be classed as a secure loan (not mortgage?) Or will they just look at the original figure of £174k and current value of £235 ?


2) As the fixed rate comes to an end next september will they just put us on standard rate or could they terminate the agreement as we will be bankrupt leaving us without our home?

3)The unsecured loan will obviously be put on our creditor list so will northern rock not regard us as bad borrowers once they see that and again cancel the whole mortgage agreement?

Sorry to ask so many questions - we just want to be sure of our position as at the moment I am sick with worry and 6 months pregnant . Not a good combination.

Many Thanks

custard_cream_3

You're in a very similar position to that which I found myself in last year. Before going bankrupt, I hadn't missed a single payment either.

First of all, don't panic...you'll be fine!

The secured loan does make it look likely that you're in negative equity at the moment. How long that will last for is open to question with prices rising, but the OR valued my house at a ridiculously low level, making me spectacularly in negative equity, so who knows?!

HSBC have told me that when the fixed rate ends, I'll be offered any deal the equity in the house allows...so it's equity-based. If I don't qualify, I'll be back on standard variable rate. Your fixed rate terms probably say the same. They can't terminate the agreement unless you've been fraudulent or don't pay, etc.

I had lots of borrowing with HSBC...they haven't taken it personally when it comes to the mortgage! Remember, they're not doing you a favour by lending money; they're making packets out of you!