'Handing the keys back' - voluntary repossesion/shared ownership.

bounce11

I'll try and keep this simple as I have noticed I tend to write long-winded threads!

Myself and ex-girlfriend have a joint mortgage. She moved out 3 years ago and refused to pay anything towards the flat. I remained in the flat and have paid for everything since (and have struggled). The house has been up for sale for 3 years with no luck (3 viewings). I cannot alter the price or rent it out for various reasons.

I have come to the conclusion I am seriously considering voluntary repossesion i.e. 'handing back the keys'. I am aware of the financial implications of this.

My query is really with my ex-girlfriend. Obviously she doesn't want this to happen - she is quite happy doing her own thing and not paying anything.

If one party wants to move out/hand back the keys and no longer commit to the mortgage and do a voluntary repossesion (i.e. me) - where does the other party stand - can only one party do a voluntary repossesion or do both need to agree? I am looking at an IVA for me personally (explained in another thread) so any debt relating to the eventual sale of the flat (And shortfall) will go to my IVA.

But for my ex? Where will it leave her?

Sepa74

I really doubt anyone here will have the answer. It's a very specialist question. May be a CAB can help, or at least point you in the right direction for an answer.

Good luck! It sounds a very complex situation.

marko21

I think you really need to seek legal advice on this, if not least your Mortgage provider to explain the situation, they are obliged to help or at least advise re your situation. If the mortgage is in joint names you are both liable for any debts on the house. If you cannot afford to keep the house and its repossessed, the mortgage company would seek to sell the the property (via auction most likely) to recoup any losses. It is likely that the monies from the sale may be well short of the actual amount owed. You would both be liable!

jamesd

Handing back the keys would change the sale price greatly, downwards. Then both of you would normally be jointly liable for the outstanding balance owed after the sale and the mortgage company would take you both to court to get a CCJ against each of you followed by the usual enforcement of the debt through bailiffs, earnings attachment orders and such. Since you'd have an IVA, they would chase her for the whole remaining balance after the sale.

That should give her a very strong incentive to agree to do whatever is necessary in the way of price reductions to get the place sold at a lower but less low price than an auction sale. She'll have financial liability anyway, but less.

You might also contact your mortgage lender and ask them whether they are willing to pursue her for all or part of the payment money, since she is liable for it, including any arrears.

It may not be necessary to sell the place or hand back the keys. As part of your IVA your possible expenditures will be worked out and that will presumably leave a shortfall in the mortgage payments that the mortgage lender would then chase her for.

You could also consider taking her to court yourself and seeking an order against her compelling her to pay.

bounce11

Great post/reply jamesd! Thanks to all the other replies.

My intention is to speak with an agent working on behalf of Woolwich as a debt counsellor who is visiting me tommorow and go from there.

Ideally, in a perfect situation I would do the following:

1. Hand back the keys, make no further payments.
2. Move to new place.
3. Enter in to an IVA for my vast unsecured debt.
4. Mortgage company sell the house at a loss, chase me and ex-girlfriend for the shortfall. 50% of the shortfall would go in to my IVA and the other 50% would go to my ex-girlfriend.

The last thing I want is any CCJ's etc. I am perfectly happy entering in to an IVA and the voluntary possesion side of things. Under NO CIRCUMSTANCES do I want to stay in this property. My life is on hold - it effectively has been since trying to sell the property as I am not 'settled'. I had depression for over a year due to this (thankfully I'm feeling better).

Lois_E

You may have difficulty finding a new place to which to move. With this on your credit record, you won't get a mortgage, and you won't pass the credit check for a privately rented place, either. You haven't mentioned any children, so I'm guessing you are now a single adult with no dependants, so you're very unlikely to get social housing. You really need to get professional advice before you decide what's the best course of action. Meanwhile, if you're looking for advice hereon MSE, then try some other boards: the people on the DFW board know a lot more about these things than we do on here, and the people on the house buying/renting board will be able to advise you about the housing side of things.

Good luck

teeni

You will need her signature on the forms to hand back the keys and surrender the property you can not do this on your own. If you leave the arrears will continue to accrue and the property will be repossessed and both of you chased for any remaining debt.

Once the property is repossessed the court will make an order for the balance of the debt, so a ccj is inevitable eventually.

bounce11

Lois_E wrote: »

You may have difficulty finding a new place to which to move. With this on your credit record, you won't get a mortgage, and you won't pass the credit check for a privately rented place, either. You haven't mentioned any children, so I'm guessing you are now a single adult with no dependants, so you're very unlikely to get social housing. You really need to get professional advice before you decide what's the best course of action. Meanwhile, if you're looking for advice hereon MSE, then try some other boards: the people on the DFW board know a lot more about these things than we do on here, and the people on the house buying/renting board will be able to advise you about the housing side of things.

Good luck

Yes, single no dependants. Does it make a difference if I am looking to rent jointly with someone else who has a good credit rating? I was intending to move to a 2 bed flat (privately rented) with a good work colleague mate of mine? I am definately not after a mortgage!

teeni wrote: »

You will need her signature on the forms to hand back the keys and surrender the property you can not do this on your own. If you leave the arrears will continue to accrue and the property will be repossessed and both of you chased for any remaining debt.

Once the property is repossessed the court will make an order for the balance of the debt, so a ccj is inevitable eventually.

Ah thought so. Ideally like I said I want to go down the voluntary route. I will try and persuade her that either way the house will be repossesed so it may as well be done voluntarily with her signature. I have spoken to her about it today and she is still refusing to commit any money towards it despite me saying I would be leaving it.

Will a CCJ be incorporated in to my IVA then? If I have an IVA set up, will it be included and pro-rated along with my other debts with an SOA etc?

jamesd

It would be unwise of her to sign such a document when it will make her poorer than a sale at reduced price out of repossession. Whether that reduced price is through a normal sale after a cut or an auction with reserve price. Even merely someone still living there tends to generate a higher price.

pinkteapot

You said that you cannot alter the asking price of the property. Why not?

If it is repossessed, it will certainly sell for less than if you reduce your price and sell it yourself.

Jenny1978

Having been in 'almost exactly' the same position myself, I'd suggest that repossession (voluntary or otherwise) is the last thing to do. I know it might not affect your job, but it will ruin your credit history for years to come. There must be a way to sell your place. I was helped out by someone who took my property over, paid my mortgage and agreed to buy it for the price of the outstanding mortgage as soon as he could when it came out of negative equity, when the market goes up. It was a bit of a life saver, and the same thing can work for you.


Jenny