Should I go bankrupt?

unknownforce

Please help , I really don't know what to do.

As per my previous post (which I cant work out how to delete) I need to move home due to work commitments. This means I either need to rent or sell my house.

My mortgage provider are fine with me renting the house, as long as I pay a small admin fee. However, I am only 32 and just feel as though I need a clean break. In addition, after speaking with two letting agents, the rent I would receive, minus the mortgage, fixed loan and agency fees would leave me short of around £300 a month. Now I could cover this, based on my current variable rate of 4 point something or other percent. However, if this increased in the future, I could come a cropper. I also feel that as house prices are unlikely to see huge increases for a few years I would be paying this for absolutely no gain.

The other option is of course selling my house. However, this could take months, leaving me paying rent on a new house plus this mortgage. In addition, after having valuations with 2 estate agents, the most likely outcome for the quick sale I need means I will be anywhere between 5-10k short of what I owe.

I will be signing a long term (5 year) lease on a new rental property and have a couple of grand in the bank. Is it a feasible option to just hand the keys back to my mortgage company when my new lease is signed and sealed and walk away? Would there be any major implications on my future?

Please help, I would really appreciate hearing any similar stories or sage words of advice. Maybe there are other things I haven't thought of.

Best

mynameisdave

Sell the house but don't go bankrup - £5 to £10k debt is worth bankruptcy is you feel you can contribute £300 a month to a mortgate on top of you own rental and living expenses.

Not only do you have to consider the money you have to contribute to meet the mortgage you also have to consider all the incidental costs - what if the cooker breaks? Annual gas checks, EPC's...

carolt

unknownforce wrote: »

Please help , I really don't know what to do.

As per my previous post (which I cant work out how to delete) I need to move home due to work commitments. This means I either need to rent or sell my house.

My mortgage provider are fine with me renting the house, as long as I pay a small admin fee. However, I am only 32 and just feel as though I need a clean break. In addition, after speaking with two letting agents, the rent I would receive, minus the mortgage, fixed loan and agency fees would leave me short of around £300 a month. Now I could cover this, based on my current variable rate of 4 point something or other percent. However, if this increased in the future, I could come a cropper. I also feel that as house prices are unlikely to see huge increases for a few years I would be paying this for absolutely no gain.

The other option is of course selling my house. However, this could take months, leaving me paying rent on a new house plus this mortgage. In addition, after having valuations with 2 estate agents, the most likely outcome for the quick sale I need means I will be anywhere between 5-10k short of what I owe.

I will be signing a long term (5 year) lease on a new rental property and have a couple of grand in the bank. Is it a feasible option to just hand the keys back to my mortgage company when my new lease is signed and sealed and walk away? Would there be any major implications on my future?

Please help, I would really appreciate hearing any similar stories or sage words of advice. Maybe there are other things I haven't thought of.

Best

That's a load of bobbins.

You're signing a 5 year lease on your new property?

Where do you get 1 of those, then?

Handing back the keys doesn't work in the UK. You'll be chased for every penny you owe. And if you can afford a spare £300/month, you clearly can pay - just don't want to.

Stop trolling.

DVardysShadow

carolt wrote: »

That's a load of bobbins.

Quite possibly.

OP, go to http://www.makesenseofcards.co.uk/soacalc.html and fill out a statement of affairs. Then we can advise if you should go bankrupt.

pinkshoes

If you hand the keys back, the lender will sell it for whatever they can, then chase you for the rest of the money for years, and you'll end up with a screwed credit rating, and it'd be years before you can borrow at a sensible rate again!! You'd be MUCH better off putting it on the market at a sensible price and selling it yourself.

Do 5 year leases on rental properties exist?? Why would you want to tie yourself in for this long? I mean, what if you hate the area, or want to move again???

If you give people some details of your house here (mortgage remaining, when you bought it, how much for, how big, area it's in etc...) then people might be able to give you some realistic advice.

All this talk of going bankrupt sounds a bit like trying to run away rather than face up to potential problems.

unknownforce

carolt wrote: »

That's a load of bobbins.

You're signing a 5 year lease on your new property?

Where do you get 1 of those, then?

Handing back the keys doesn't work in the UK. You'll be chased for every penny you owe. And if you can afford a spare £300/month, you clearly can pay - just don't want to.

Stop trolling.

Its a 5 year renovate/rental agreement on an old farmhouse - not bobbins at all

If I sold and was in negative equity by 5k I could pay this from savings. Anymore than this I would be short.

I could find it, but would rather not.

I don't know what trolling means, but thanks for your aggressive reply anyway

carolt

unknownforce wrote: »

Its a 5 year renovate/rental agreement on an old farmhouse - not bobbins at all

If I sold and was in negative equity by 5k I could pay this from savings. Anymore than this I would be short.

I could find it, but would rather not.

I don't know what trolling means, but thanks for your aggressive reply anyway

That explains the reason for my aggressive response.

Basically you'd like someone else to pay for your mistakes. Quite possibly me, if it's a taxpayer-owned bank.

unknownforce

pinkshoes wrote: »

If you hand the keys back, the lender will sell it for whatever they can, then chase you for the rest of the money for years, and you'll end up with a screwed credit rating, and it'd be years before you can borrow at a sensible rate again!! You'd be MUCH better off putting it on the market at a sensible price and selling it yourself.

Do 5 year leases on rental properties exist?? Why would you want to tie yourself in for this long? I mean, what if you hate the area, or want to move again???

If you give people some details of your house here (mortgage remaining, when you bought it, how much for, how big, area it's in etc...) then people might be able to give you some realistic advice.

All this talk of going bankrupt sounds a bit like trying to run away rather than face up to potential problems.

Thanks for your considered reply pinkshoes

You're right, I guess I was thinking of almost running away. In my mind it was a simple option of just saying sod this and moving on. I didn't realise they would sell for whatever they could get and then come after me. As you can see, I hadn't really thought it through, we're just feeling thoroughly depressed with it all!

My wife and I bought our house just after our first child was born, we used a self cert mortgage and always expected to ride the equity wave. This house isn't a forever house and isn't in a very good location, but we thought it would be a good start to the buy and sell culture we watched on TV!

Despite earning a reasonable joint income we don't have the deposit required for a new house, or the equity to provide it. In addition, I am no longer salaried and have started a new business. This is doing well, but the banks don't want to want to give you money for a few years it seems.

Re the rental property, we stumbled across it whilst walking the dog. Its the sort of rural dream house you imagine buying and we have fallen in love with it. We tracked down the owner (a landed gentry) and are currently discussing a long term renovation/let. We have paid interest only on our mortgage for five years anyway, so have never really owned anything, thats why we just think sod it, lets rent.

If we could sign a 10 year rental we would, as we know we could never buy a house like it unless we spent 5 years saving for a deposit.

WHY DONT YOU SAVE THE DEPOSIT?

I can hear the previous poster saying it now......well because life's to short and we want our children to enjoy their childhood somewhere special. There's no point moving somewhere like it when they are teenagers, they will hate us then and never be at home anyway!

I guess I need to just cross my fingers that my house sells quickly for a not too severe price. I don't think I could cope with the ongoing saga that renting it would cause.

Aaaah, feel a little better writing all that to people I don't know, thanks for listening!

sharkie

pinkshoes wrote: »

If you hand the keys back, the lender will sell it for whatever they can, then chase you for the rest of the money for years, and you'll end up with a screwed credit rating, ....

They (the bank) are not worried about your money, or the best price, just want their money back with the minimum hassle and max profit.

Expect to loose 20-30??% of the market value if it goes to a foreclosure bid or auction. Then as pinkshoes rightly said "then chase you for the rest of the money", plus interest and a mark on your credit rating.

mynameisdave

You're paying him rent as well as renovating his property?

Emmzi

you clearly want a lifestyle beyond your means.

There is no easy answer unless you adjust your means or your lifestyle.

Please stop being angry at posters who point this out to you.