Handing keys back

Snooze

Hi all,

Can someone tell me exactly what happens if you walk away from a mortgage that you CAN afford to pay?

I've seen some misinformation on another forum about what happens which is clearly wrong and would like to advise the person correctly.

I know what happens when you CAN'T afford the mortgage, but what happens when the mortgage co. take you to court for not paying the outstanding balance? Presumably you'd have to fill in an AOE for the court who would see that you're able to pay back the debt, but what then? Court tells you to pay £x per month and you ignore it. Now what?

Thanks.

jamie11

Snooze wrote: »

Hi all,

Can someone tell me exactly what happens if you walk away from a mortgage that you CAN afford to pay?

I've seen some misinformation on another forum about what happens which is clearly wrong and would like to advise the person correctly.

I know what happens when you CAN'T afford the mortgage, but what happens when the mortgage co. take you to court for not paying the outstanding balance? Presumably you'd have to fill in an AOE for the court who would see that you're able to pay back the debt, but what then? Court tells you to pay £x per month and you ignore it. Now what?

Thanks.

With an AoE you get no choice, the money is gone before you get it.
There would be a ccj, so no credit for six years. Expenses would multiply for every attempt to enforce, I suppose eventually it could even develop into contempt of court.

evoke

Jezz.

OP: are you planning on doing a runner and ruining the mortgage market for the rest of us who do play by the book?

Procrastinator333

Snooze wrote: »

Hi all,

Can someone tell me exactly what happens if you walk away from a mortgage that you CAN afford to pay?

I've seen some misinformation on another forum about what happens which is clearly wrong and would like to advise the person correctly.

I know what happens when you CAN'T afford the mortgage, but what happens when the mortgage co. take you to court for not paying the outstanding balance? Presumably you'd have to fill in an AOE for the court who would see that you're able to pay back the debt, but what then? Court tells you to pay £x per month and you ignore it. Now what?

Thanks.

AOE - Attachment of Earnings. Your employer will get a letter saying deduct £X from Joe Blogs salary and give it to us not him. The employer will oblige.

I would have also thought they pursue you for everything they can. You will be hounded by debt collectors and they will go after any assets you own. I doubt they will ever leave you alone. And because of all the extra costs of this I doubt you will ever pay off the debt.

If you want out, sell the house, even at a loss and get an unsecured loan to cover the difference. If you hand back the keys and the bank sell it, it will go as a repo and no doubt end up selling at a heavy discount - money they will come after you for.

DVardysShadow

Attachment of Earnings would be rare for a mortgage debt, I think. Maybe unprecedented. The state tends to be the main user of that one for council tax and for Child Support payments to minimise the need to pay benefits.

There is also no question of the mortgage continuing. The house would be ignored if the keys were just handed back - it would just sit there and the lender would go for a proper repo - unless they agreed to voluntary repo. Even there, I believe a voluntary repo only comes into play after a repo is sought. The problem is that debt will accumulate, the lender will let it eat the value in the property before they do anything and some very steep legal and selling cost will accumulate. They can then pursue these for years - often waiting till people are back on their feet to take the money from the next property .... The normal 6 year statute bar on a debt does not apply.

Snooze

evoke wrote: »

Jezz.

OP: are you planning on doing a runner and ruining the mortgage market for the rest of us who do play by the book?

I take it you did not read my post then?

Snooze

DVardysShadow wrote: »

Attachment of Earnings would be rare for a mortgage debt, I think. Maybe unprecedented. The state tends to be the main user of that one for council tax and for Child Support payments to minimise the need to pay benefits.

There is also no question of the mortgage continuing. The house would be ignored if the keys were just handed back - it would just sit there and the lender would go for a proper repo - unless they agreed to voluntary repo. Even there, I believe a voluntary repo only comes into play after a repo is sought. The problem is that debt will accumulate, the lender will let it eat the value in the property before they do anything and some very steep legal and selling cost will accumulate. They can then pursue these for years - often waiting till people are back on their feet to take the money from the next property .... The normal 6 year statute bar on a debt does not apply.

Source please?

DVardysShadow

Snooze wrote: »

Source please?

google on 'statute bar' mortgage and come to your own view

Yorkie1

Snooze wrote: »

Source please?

S.20 Limitation Act 1980. The statute bar is 12 years for mortgage debts.

http://en.wikipedia.org/wiki/Limitation_Act_1980

http://www.legislation.gov.uk/ukpga/1980/58

Snooze

DVardysShadow wrote: »

google on 'statute bar' mortgage and come to your own view

Sorry I misread what you wrote. Of course mortgage debts can be collected for 12 years not 6 with 'normal' debts.

MacMickster

Snooze wrote: »

Hi all,

Can someone tell me exactly what happens if you walk away from a mortgage that you CAN afford to pay?

I've seen some misinformation on another forum about what happens which is clearly wrong and would like to advise the person correctly.

I would advise them that they qualify for a nomination for the idiot of the year award for making a positive choice to
1. Increase their debts unnecessarily.
2. Ruin their credit rating at a stroke unnecessarily.
3. Have to deal with numerous letters and phone calls until the whole of the (increasing) debt is eventually repaid.
4. Let their employer know that they have employed someone who is prepared to act in this way.