Can they do this? ...

BabyDingo

Hi all;

Earlier this year my business failed and i was forced into Bankruptcy, this co-incided with my partner giving birth to our first mini dingo (wahoo!) meaning that her income fell by around two thirds almost instantly. Our household income has now fallen from around £4500 per month to about £400ish.

Our Mortgage lender (Northern Rock) have been pretty much useless when it comes to offering real help, they are essentially not interested and appear to be of the opinion that we got ourselves into this mess so we can get ourselves out. Of course they've made a few noises so as to seem sympathetic but in reality they've been no use whatsoever. They refused a paymeny break due to my Bankruptcy, offered a total reduction (Interest only) of £72 per month on a £650 mortgage (on the understanding that we pay back the shortfall, plus interest, after three months) and suggested the Government backed Mortgage relief scheme that follows similar unrealistic guidelines - if i could find a lump sum after three months i wouldn't be worried!

Anyhoo, Northern Rock have told us that, as we are in arrears with both our Mortgage (3 months) and an unsecured personal loan (also 3 months) that they will be applying to the court to turn the unsecured loan into a secured loan, secured against our house - i'm really just wondering if they can, is it possible for them to do this and, if so, what's the point in us signing an unsecured loan agreement if they can change the rules?

We have a plan and i'm sure we'll ride this one way or another but i wanted a general opinion or even an informed opinion regarding the loan.

Cheers all

kelloggs36

Yes they can do this - so that the debt becomes secure and they can then recover it at a later date. Did you not have any payment protection insurance when you took out the mortgage or loan?

CLAPTON

yes that can apply to the court for a charging order on the house.

then main diffference between a secured loan and one with a charging order is that if you default on the mortgage and they apply for re-possession then it a prettty much foregone conclusion it will be granted.

with a charging order its relatively unlikely the judge will grant re-possession unless the value of the debt is quite substantial