selling house with secured loan?

jj151201

if you are already in debt and paying into a DMP what happens if you sell your house with no equity and you have a secured car loan and secured personal loan? my relations are doing this very thing! they have a car loan of about £6k and a brand new personal loan of £5k absolutely no equity in their house and they have just put it on the market and want to move into rented accommodation!!!!!!!!!

the new loan taken out in December, they have already missed their first payment?

i have a bad feeling about this

JAJ

Rafter

Well - the car goes back and the loan companies will try to pursue your relatives for their money.

It may be that the loan company will block the sale if they think the loan has been obtained by deception.

They should go and talk to citizens advice and the CCCS - It sounds like it may be a trip to the local bankruptcy court.

R.

frugalpam

jj151201 wrote:

if you are already in debt and paying into a DMP what happens if you sell your house with no equity and you have a secured car loan and secured personal loan? my relations are doing this very thing! they have a car loan of about £6k and a brand new personal loan of £5k absolutely no equity in their house and they have just put it on the market and want to move into rented accommodation!!!!!!!!!

the new loan taken out in December, they have already missed their first payment?

i have a bad feeling about this

JAJ

If the loans are secured on their house, then they'd have to repay them when the house was sold, I'm certain. I sold my previous house which had a small loan secured against it (about £3000 I think) - the solicitor handling the sale said it was one of the first things to be paid back, along with paying off the mortgage to the lenders. Luckily I had good equity in the house. If they've no equity in the house... then they'll have to find the money to settle those loans PDQ. Sounds a dangerous game to me.

Pam