want to keep house but arrears

LTP123

Hi everyone,

We are declaring Bankruptcy next week but this month have fallen behind with the mortgage. We won't get it up to date this month. What will happen? We already owe NR the loan part of the mortgage so will we automatically get kicked out? First time we have ever missed mortgage.
Thanks for your help.

kepar

Sorry being ignorant, what do you mean by the loan part of the mortgage

LTP123

Thanks for reply, sorry we have a together mortgage. Posting on my phone that's why my writing is a bit all over the place. Thanks again.

silvercar

Together mortgage is a secured mortgage plus an unsecured loan.

The unsecured loan will fall into your bankruptcy, but I suspect that NR have a clause somewhere that they can use the security you gave for the mortgage to secure any other money you owe them. Most lenders do, so the result will be that NR call in the unsecured bit to form part of your main mortgage.

What are your plans? Do you want to remain in your home?

newlifein2011

Hi I am not sure about the arrears but we are in a similar position, we have a mortgage with an unsecured element too and I was advised that it was 'safe' to default this (it has to be included in bankruptcy by law) and still keep up the secured element, I have read the terms and conditions and they seem to confirm this, the amount is unsecured and there is no way that it can be changed. In essence they are two separate accounts. I have wrote to my mortgage provider to inform them of BR and our position re being unable to pay the unsecured element.

It is an added complication though and in some ways I would rather it be secured as we could keep our mortgage provider happy (they have a terrible reputation for dealing with financial hardship but have been good with us so far).

I would imagine that if the arrears amount is small the mortgage company would be OK to let you continue you with that I guess it depends how they react to you defaulting on the loan, I think in normal circumstances they would need much more than one payment arrears to repossess.

Good luck, I'll let you know what response we get if any if you want?

LTP123

Our plan was to stay in the house. This is looking less likely now, we recieved a letter to say we were two months owing today (including this month) and have paid a bit off tonight. I just wondered if the OR would have anything to say because we have fallen behind and may question whether we can afford it in the future.

We have recently failed our IVA's and NR loan was included in that. They haven't mentioned securing it. If they secured it, would that mean we would owe the mortgage amount plus the loan all in one?

Thanks.

LTP123

Hi Newlife thanks that would be great.

newlifein2011

No probs I'll do it by PM though so not to give too much away.

silvercar

They haven't mentioned securing it. If they secured it, would that mean we would owe the mortgage amount plus the loan all in one?

The place to look is in the terms and conditions for your main mortgage. You are looking for something like, "the lender reserves the right to use this security as security for any other debts to the company."

If it is secured by such a clause then it would mean you owe the mortgage amount and the loan.

silvercar

I just wondered if the OR would have anything to say because we have fallen behind and may question whether we can afford it in the future.

Depends how the payments compare to rent on a suitably sized property in your area.

LTP123

Our payments are around £100 more than the average rents but will go down considerably next august as our high fixed rate will end.

I need to know for sure if we will be allowed to stay in our home if its in negative equity and we have fallen one payment behind. Does anyone have any experience of this?

Thanks again.