House handed back - Deprivation of Capital!!!

rosysparkle

Imagine you had that £80k, not tied up in a house as equity, but sitting in a bank. Now imagine you give that £80k away, and claim means tested benefits. Would the DWP treat that as deliberately depriving yourself of capital - yes indeed. So why would you think it's any different if you give your £80k equity in a house to the bank? You've still given away an asset worth £80k.

And if you had £135k in savings and a £103k mortgage, and chose to deplete your capital in daily living expenses over only 5 years rather than paying off your mortgage all I can say is more fool you.

welshmoneylover

andyandflo wrote: »

I don't!!!!

I have a legal document that was prepared by the bank that I relinquished all rights and claims in respect of the property when I gave them it.

The bank had an interest in it because they had a secured charge against it.

I don't, I gave up that right to any equity in the agreement. I asked them about what would happen if there was any money left over. They said that I would have no legal right to it but that they would make an ex gratia payment to me of a sum.

That was a very very foolish thing to do, and it looks as if it is coming back to haunt you.

Good, cos you've been a right arrogant twerp on some of your posts and those of you AE.

SuziQ

I couldn't pay the mortgage anymore so I 'sold' the property to the bank for £103K.

That in itself, sounds like deprivation of capital to me. I think you must have been badly advised, if you literally handed the bank £73,000 over and above what you owed them. That's if it sells, and if it sells for what you think it's worth-in my area, houses are going for around £30-40,000 under the asking price. Did you get independant advice or just accept what you were told by some bank advisor? I have to say, £300 is a pretty low mortgage, (lower than many rents)and as someone else said, you could have paid that mortgage off years ago and secured your house-if,in fact you ever had the amount of savings, which I seriously doubt.
You say you also had a £4,000 bond left-why not realise that and have another year in the house?
As to you being no better off, look at it this way: I am fighting tooth and nail to keep me and my kids in our house at the moment. I probably have over £100,000 equity-who knows with current house prices, I am pitching it very low so it may be more. Problem is, if I lose this house, I could never afford another mortgage nor would anyone risk giving me one! However, I have loved living here for over 20 years. My kids love their schools in a short walking distance away, it's a lovely quiet road and we love and enjoy our garden. If I lost it all tomorrow, at least I would have had all the pleasure these years of living here-knowing what council property is like locally, and the standard of private rented, I know I have had it much better here. And THAT is what makes it all worth wile for me. I worked for 28 years-hard- before I got ill but it gave me the life I had here. I would have hated being on benefits all those years-as I do now!- and that is the way you should be looking at it. I am not jealous of any of these people who are supposedly raking in huge amounts of benefit-I got a lot of job satisfaction from my job, I know I made a difference in the lives of many children and families and I wouldn't have swapped any of that for years and years of the mere existence I have had these last couple of years

GlasweJen

OP, yes I do mean that you might not be entitled to LHA and that you could be forced to pay back any LHA that you have received and also (under the old HB rules so might not apply any more) be barred from claiming for a period of time (was a long time ago I can't remember the time scales sorry!).

I was a CAB Scotland advisor back in the days of housing benefit and we had a situation similar to yours and there was absolutely nothing we could do for the person who came for help, we tried the local housing authority, got the MP involved and got nowhere because, at the time, that was what was in the legislation.

The important part was that the client had voluntary turned over his house to the lender thereby making himself intentionally homeless, as the LA wouldn't house him he got a private let and claimed HB for 6 months until the LA found out that he had signed over his house without being evicted and so had a stake in an asset.

I wish you luck with this, frankly you're going to need it by the bucketload.

andyandflo

Oldernotwiser wrote: »

If you had £135,000 in savings and £80,000 outstanding on the mortgage, why on earth didn't you pay your mortgage off and secure your home?

The mortgage was for £103K

I had considerable investments put aside in 2003 (£135,000). Enough to repay the mortgage on demand (£103,000) if need be. In 2004, I became seriously ill. From 2004 until 2009 when I had to give up work altogether, I was off sick more than I was working.
I couldn't claim any means tested benefits because of the capital I had. I couldn't repay the mortgage as I was told that it would be seen as deprivation of capital and be treated as though I still had it. In fact I didn't claim any benefits at all.
So the mortgage payments came out of it each month, our living expenses came out of it and by October 2009 it had all almost gone except for £4000 in a bond. I claimed benefit then for sickness and Pension Credit.

Indie_Kid

andyandflo wrote: »

I couldn't claim any means tested benefits because of the capital I had. I couldn't repay the mortgage as I was told that it would be seen as deprivation of capital and be treated as though I still had it. In fact I didn't claim any benefits at all.

Surely you're allowed to make the monthly repayments; but not a huge chunk, without it being seen as deprivation?

andyandflo

dmg24 wrote: »

You don't change, do you? Even after all the vitriol you and your AE's have aimed at us, we still try to help and you still throw it back. If you are unwilling to listen, feel free to go and ask somewhere else.

OK now that you know the whole sorry story do you still say that I will have a problem with HB and are you still saying that I have an interest in the property?

Because if so, I intend to see a solicitor this week to make sure that what I believed I signed for is exactly what I signed for.

andyandflo

Oldernotwiser wrote: »

And his attitude to money is so hopeless that I find it difficult to believe that he was ever an accountant.

How can you say that? I removed a liability at no cost to me except for a hypothetical amount of equity.

AnxiousMum

So......you basically just 'give it away' instead? I'm sure that the DWP will see a house valued at 170K, which you have literally signed away to somebody else (albeit the bank) for £103K. Therefore, you have deprived yourself of the £63K that you would have had if you had sold it yourself. What you have done is technically no different than selling it for £170K and taking all that money and giving it to the bank as a 'thank you' for letting me live there! The fact that if the bank sells it for £120 and gets enough back to cover the mortgage and the lawyer fees, they'll be happy.....but you'll still have voluntarily deprived yourself of your equity.

Now....just wondering how many people you have advised about deprivation of capital on these boards.......poor !!!!!!s!

GlasweJen

I'd be seeing that solicitor, as long as you have money tied up in that house you're screwed in terms of benefits.

Solicitor should have a good knowledge of the benefits system - not many do so you may want to see a welfare advisor at your council as well.

Under these circumstances you may have a claim against the bank for giving such guff advice, do you have it in writing that the bank advised you to give them your house despite having no arrears and £4,000 in the bank which could finance almost a year of mortgage payments?