Help...ship sinking fast!

lsmac_2

I am desperate for any advice you may be able to give...here is our problem!....
Me and my husband currently own 25% share of an apartment, have been here for over 4 years. We have two children one aged 8 the other 2. Our problems started around this time last year when I went back to work after having our second child. We could not meet the mortgage and rent on our place plus all other bills etc on my husbands wage, I had to return to work. We knew it would be tight until our youngest started school but we were prepared for that. What we wasn't prepared for was the amount of child care we would pay for both children, breakfast club and nursery fees, on top of that my husband has had to take a pay decrease of approx £200 per month due to pay reviews for local authorities. He is not the only one many in same boat. Anyway long story short.....arrears of almost £3k with housing assocition for rent. Mortgage upto date. At the mo but xmas approaching fast with 2 children! Flat on market but although interest will not sell, the rent plus service charge and ground rent costs £570.00 per month, plus mortgage payment for our 25% share. No one can afford the lease on this place we cant either anymore...new builds in our area are over £250 less per month. Housing Association not interested. To be honest even if we could afford to stay now we want out, need somewhere bigger with both kids. Also in negative equity by approx 15k. Mortgage co will not accept any short fall....we are well and truly stuffed! Mortgage lender advised us to hand keys back....went to see Housing Money & Advice Centre who came up with few solutions to free up some money each month, ie pay interest only mortgage and offer £1 payment to credit card company(currently stands at £1,500.00. Catolouge 2k. Long term this is no solution, property will never make any equity in next 10 - 15 yrs. We now want rid. Stress too much.
My question is...do we find somewhere to rent privately before we hand keys back?
Should we hand keys back?
If we do this, when property is evently sold after repossession and the mortgage company contact us with short fall which I estimate to be around 30k do we then make ourself bank rupt or just accept our CCJ and try to repay the shortfall of around 30k over a period of time agreeable?
Will the mortgage co even bother coming after us if we have no money to give them?
We have no savings and live hand to mouth, I work in public sector and massive changes being made, I anticipate I too will have wages decreased by around 3k per year by end of 2011. That is 5k a year cut between both me and my husband, everything else is increasing but our wages are going down!
Tax credits been cut, have checked all benefit entitlement and we are not entitled to housing benefit, council tax etc....
We are slowly sinking, rent arrears increasing by £450 per month, not paying minimum payment to catolouge, credit card, any advice please would be so greatly received. Oh, also owe £600 to short term loan company (ie, payday loan).

Thanks

annie46abbie

hey hun,

we went BR in july and were told to keep our keys until after the BR.

Hope i'm right in saying this, if not someone else will come along and put me straight.

The mortgage company have been ringing us and telling us we are laible for the shortfall BUT this is not true, we still have the keys but are waiting for them to repossess.

The shortfall WILL go into your bankruptcy.

Mike_parsonnage

lsmac wrote: »

I am desperate for any advice you may be able to give...here is our problem!....
Me and my husband currently own 25% share of an apartment, have been here for over 4 years. We have two children one aged 8 the other 2. Our problems started around this time last year when I went back to work after having our second child. We could not meet the mortgage and rent on our place plus all other bills etc on my husbands wage, I had to return to work. We knew it would be tight until our youngest started school but we were prepared for that. What we wasn't prepared for was the amount of child care we would pay for both children, breakfast club and nursery fees, on top of that my husband has had to take a pay decrease of approx £200 per month due to pay reviews for local authorities. He is not the only one many in same boat. Anyway long story short.....arrears of almost £3k with housing assocition for rent. Mortgage upto date. At the mo but xmas approaching fast with 2 children! Flat on market but although interest will not sell, the rent plus service charge and ground rent costs £570.00 per month, plus mortgage payment for our 25% share. No one can afford the lease on this place we cant either anymore...new builds in our area are over £250 less per month. Housing Association not interested. To be honest even if we could afford to stay now we want out, need somewhere bigger with both kids. Also in negative equity by approx 15k. Mortgage co will not accept any short fall....we are well and truly stuffed! Mortgage lender advised us to hand keys back....went to see Housing Money & Advice Centre who came up with few solutions to free up some money each month, ie pay interest only mortgage and offer £1 payment to credit card company(currently stands at £1,500.00. Catolouge 2k. Long term this is no solution, property will never make any equity in next 10 - 15 yrs. We now want rid. Stress too much.
My question is...do we find somewhere to rent privately before we hand keys back?
Should we hand keys back?
If we do this, when property is evently sold after repossession and the mortgage company contact us with short fall which I estimate to be around 30k do we then make ourself bank rupt or just accept our CCJ and try to repay the shortfall of around 30k over a period of time agreeable?
Will the mortgage co even bother coming after us if we have no money to give them?
We have no savings and live hand to mouth, I work in public sector and massive changes being made, I anticipate I too will have wages decreased by around 3k per year by end of 2011. That is 5k a year cut between both me and my husband, everything else is increasing but our wages are going down!
Tax credits been cut, have checked all benefit entitlement and we are not entitled to housing benefit, council tax etc....
We are slowly sinking, rent arrears increasing by £450 per month, not paying minimum payment to catolouge, credit card, any advice please would be so greatly received. Oh, also owe £600 to short term loan company (ie, payday loan).

Thanks

Hi sorry to hear about your plight , it really !!!!-s me off to see how people bringing up children have been really shaffted in this country . The cost of housing and all the bills just make it immpossible to acheive anything. At this time in your life you should be enjoying your life with your young children and not living a life of hell and worrie. As for these part buy part rent schemes they are the biggest con that has ever gone on in the housing market and have been used by govenments passed and present to keep the bubble housing market afloat when it should have been allowed to pop.
At the end of the day the most important thing is you your husband and the kids. Now it may seem hard to think about right now if you are both working and go bankrupt at some point you are going to come out the other end without all this worrie and debt. The fact that you have young children is on your side as if you get repossessed they the state will have to house you. Take carefull advice as giving back the keys can be looked on as making yourself intentionally homeless and then they might not house you. Take a deep breath and say sod it , sod the debts look after your family and let what happens happen . As long as you and your kids go to bed safe tonight and every other night nothing else matters. Hope you sort this out and remember they cannot get blood out of a stone and hurt you or your kids.

Ineedaname

Have you taken advice from any of the free debt advice charities yet? They will be able to go through all your family finances and point you in the best direction for your situation.

Regarding needing a bigger house, be careful as your children are still both so young. You may find you're actually still only entitled to a 2 bed place for help with HB once you are renting. Also an OR may only give you an allowance for a 2 bed place, expecting you to find the additional rent from within other allowances if you choose to take on a bigger place.

As far as the kids and Christmas go. Chidren need a roof over their heads, food in their bellies and the love of their parents. Anything else is a bonus! You will also not have an allowance for presents if you go BR. Pop over to the Old Style board for ideas of Christmas on a budget though, I'm sure they'll have loads of suggestions for you.

NeverAgain_2

Picking the financial details out of your post, it seems you are heading for bankruptcy.

Living hand to mouth, deeper in debt each month, and no realistic prospect of repaying £30K mortgage shortfall.

Although you don't appear to have a lot of immediate, pressing debt, so that may need looking into.

With a family, you will probably be more comfortable renting somewhere before you declare yourself bankrupt, and it's often easier to obtain a rental property before bankruptcy rather than after.

Don't get too hung up about when you hand the keys back to the old place, it's meaningless from a legal point of view.

I'm not sure how repossession works with shared ownership, but it's no concern of mine or yours, that's up to the housing association and mortgage company to sort out.

As has been said earlier, the mortgage shortfall and rent arrears will fall into your bankruptcy, but don't sign anything in relation to the tenancy agreement or mortgage from now on.