Advertised Bankruptcy?

Ames

My mum's mortgage hasn't been paid for over 18 months now, they're threatening repossession but her solicitor keeps getting it put off. It's slightly different cos she's arguing my dad should be paying, but it's really not an overnight thing.

kimlyn_2

Been to CAB this morning and they were completely useless,"it's in your best interest to sell the property",I KNOW THAT.
They just advised me to ask for more time to sell,but I don't think Abbey or Citi will allow more time.

apples101

Kimlyn,

it might be possible to go bankrupt and stay in your house.

you say you are in negitive equity (value of property - ammount secured against property) in this case there is no benifit in selling the property as no monies can be released.

i would contact the national debt line and seek there advise. i belive that there is another web forum that could also be of great help.

wish you luck.

Emmzi

personally I would not go for voluntary repossession. The bank will sell your house for a reasonable price as fast as it can, maybe by auction. There is no guarantee they will get enough to cover the debts and they can still come after you for the balance. Also their solitictors, estate agents may not be as price-effectively selected as yours - and there's nothing you can do about it, the costs still come off the price of the sale.

IMHO, as ever.

kimlyn_2

Tried contacting both Abbey and Citi and they won't budge.I asked if I could pay a reduced amount until the property sells,but both said no if no full monthly payment was made by the end of this month they will pass it on to their legal depts.

fatbelly

kimlyn wrote:

Tried contacting both Abbey and Citi and they won't budge.I asked if I could pay a reduced amount until the property sells,but both said no if no full monthly payment was made by the end of this month they will pass it on to their legal depts.

Then you've still got several months to go!

I think i posted the various stages that this has to go though, in an earlier thread of yours. PM me if you can't find it.

Keep marketing the property, as widely as you can. Obviously be prepared to listen to offers. As a rule of thumb, if it's repossessed and sold at auction, it'll get 85% of its market value. So anything above that is a bonus..

But I still think you are heading for either bankruptcy or possibly an IVA.

Richard S and rog2 are right - if you've proved yourself to be a good tenant, why would the landlord want to evict you? The next tenant would be another unknown gamble.

kimlyn_2

I would prefer to be on an IVA rather than go bankrupt.The CCCS have been giving me advice but have not put me on DMP because I didn't meet their criteria.Is it possible to arrange an IVA even though my creditors have agreed reduced payments?Some of these reduced amounts are only for 6 months and I am dreading when this time is up.

fatbelly

Hi Kimlyn

My advice would be to worry about one thing at a time. I know that is difficult.

If your creditors have agreed payments for six months and you can afford those payments, then for the next six months just concentrate on selling that property.

You don't want to be going quickly for either bankruptcy or an IVA anyway, as you want to prove to your new landlord that you are a good tenant.

Please make sure that your new rent is your priority payment. You need to be absolutely spotless in your payments to your new landlord.

In the meantime, do your research on the pros and cons of the different options. Have you read some of the National Debtline factsheets? See the link at the top of this page.

kimlyn_2

Fatbelly,as you're so good on your advice,what would you advise me to do about my mortgage payments that are due next week?
I am scared that if I don't pay they will put a stop to any sale I might have.

fatbelly

For anyone else who wants to chip in, Kimlyn's situation is set out more fully in this thread

http://forums.moneysavingexpert.com/showthread.html?t=277110

From what i can gather, if you look at those stages of repossession I posted you are not yet at stage two with your lenders. Once you get there, matters usually progress fairly steadily, about one month between stages (5 & 6 are the same, court, stage). Until you get there I would pay as much as you can.

But not instead of paying your current rent, council tax, food, fuel, car insurance, tv license and so on.

We don't know whether the lenders will have a problem with your sale as we don't know whether the sale price will cover the balances.

If they do want to block the sale, you could point out that bankruptcy is an option and repossession followed by a sale at auction will net them less money than allowing you to complete a sale at the market price. Your solicitor might have to do some work at this stage.

National debtline advice is as follows for those in negative equity

You may be able to sell your house with permission from your lender. You will need their agreement as they can stop a sale going through if the sale price will not cover the outstanding mortgage. You will need to persuade them that you have obtained the best possible price for the property. Point out that if the house was sold by your lender they would be likely to get a much lower price as the property would be empty and could fall into disrepair.

The Mortgage Conduct of Business Rules say that a lender must “deal fairly” with anyone in arrears. If your lender refuses to let you sell the house it is possible to apply to the county court for an order for sale under the Trusts of Land & Appointment of Trustees Act 1996. The court can order a sale on whatever terms it thinks are reasonable, even if your lender objects.

In the Halifax v Barrett case the court let the borrowers sell their house for the “best possible price” even though the Halifax refused permission for the sale. The borrowers were also allowed to take the sale costs out of the sale proceeds before the money went to the lender.

- You may have to prove to your lender that sale is the last resort and the sale is in everyone’s financial interest.
- Provide your lender with full information about your financial circumstances.
You will need evidence from several independent estate agents that you have found the best sale price for your home.
- The lender may ask you to sign an extra agreement saying how you will repay the shortfall debt.