Trying to make a final decisions on Bankrutcy and future housing!!!

sundays

I had many good rental experiences, but not always, and i was a good earner with no risk, even my references were spot on, i was a governement worker so i was a landlords dream some are fortunate to find great landlords, the people next to me have rented the house for 9 years, but they are few and far between.
The buy to lets taken out around 2006 plus iMO are the risky ones as many landlords have not survived.
As a housing practioner i would receive proposed repossessions from the lenders, most were on right to buy lets than people in owner occupied accom, many didnt have a clue there landlord was in crisis .
From 2009 when mortage rescue was introduced ive seen a massive shift on how lenders view repossession and the time it is taking.

i was also on repayment for many years until my recent unemployment and am returing back to a repayment mortage. my
mortage has actually just gone down 40 pound with barclays taking over my lender .
If i went into private i would struggle as i wouln t be able to raise the funds or pass the checks.

Maizy

It really is all down to personal circumstances whether a person chooses to give up their home or not. It depends greatly on how much the property is in negative equity, how much repairs and cracks are starting to show etc (can you afford them going forward) and whether or not you have children/family needs. Some people like to think in the 'today' as you never know what is around the corner. I don't pretend to know it all, this is just my experience and it doesn't take a genius to work out what is right for themselves.

It can be very daunting going from a mortgaged home to renting but everyone has a different view point on this. Some people may see things as more riskier than others, some people are more laid back.

If you have a huge amount of negative equity, psychologically this can create a very negative impact personally and in the home environment, especially as in our case, the mortgage was over £200pm more than our current rent. It also meant that I was pushed to stay as a full time working mum which was in itself creating its own set of issues with young children but with the high mortgage/debt something had to give. At times some of us seem to think having a mortgage is vital for a good life. I value my family/marriage a heck of a lot more than a house that needed attention and had fallen into masses of negative equity, things change, priorities change.

We felt like we had absolutely no security at all and in hindsight, the killer was the secured loan which we would not have touched in a million years if we knew what we know now. When you are struggling or desperate, anything helps though at the time.

From our perspective, we are now totally free from the chains of the mortgage trap. When we were in a good position though with 50% equity (pre children), things were very different of course, we were proud homeowners back then. Circumstances change, views change and it can all become too much as seen on here time and time again.

I doubt many folk jump in feet first without thinking this through carefully. We browsed for over a year and kept on coming back to the same point. How do we manage the high mortgage payment, the repairs etc for years to come???. The questions wouldn't go away. The house needed updating and some repairs too, how do you save for those when already struggling, wiping the personal debt wasn't enough to provide oodles of disposable income. Initially we thought we were in £30k negative equity but its looking more like possibly £50k plus. We needed to rid the strain and free ourselves mentally from the debt so we could concentrate on family life and our beautiful children.

Our rented home now is just that 'our home' and if we get asked to leave at the end of the contract, we will cross that bridge when it comes (without the burden/stress of debt) thankfully. We will make the next house our home..........

I would not encourage anyone to stay in a mortgaged home with high levels of debt secured on it and equally I wouldn't suggest someone should leave just to free themselves, clearly not everyone has to do this. I have seen many a person on this forum in the short space of a year try and keep their home, only to have to give it up at a later date & I would not wish to go through that after my BR date. We all need to think really carefully before making any decision which is why this forum is a godsend.

The individual will no doubt know themselves whether they can maintain their mortgage & repairs/upkeep going forward and that is really all that matters. Sometimes we fall out of love with our homes if they have caused nothing but stress/pain.

In our case it was a no no and we are more than happy to be renting for now and who knows what the future holds, I always remain hopeful and can at least now see a positive future. Each case is different so good luck to anyone who is considering giving up their home or indeed planning to stay.

kepar

Sunday:
For me i wonder sometimes if people go to fast go BR and leaving the home, i took a very long time to make the decision to go BR . I would def never go down the voluntary route when from my own experience with neg equity ive seen families remain for months before the judge eventually evicts them.

I find this pretty offensive, and why wait until you get kicked out. To be honest we let our house go early but when your mortgage + Secured Loan is £600 a month more than the OR is allowing you, then things become difficult. We were under the old IPA rules so we had a fair bit spare but not enough to continue with that short fall.
We analysed the situation and felt we had to give it up, why wait until being forced out, we were lucky to find somewhere suitable about half a mile away with a private landlord. No credit checks, no six months upfront and no guarantor.
You stay where you are and I hope things work out for you. But in time you will feel like a prisoner, who is going to pay for a new boiler, roof etc. Things do go wrong, also new furniture, redecorating etc.

Mortgage rates are starting to rise, therefore your standard of living will fall. Good luck to you, but having that br on your files and being in negative equity means that you will not be able to move lenders.

I have read recently that those who moved onto a interest only mortgage have to make up the shortfall they have incurred over the remainder of the mortgage and not be able to extend the mortgage. So you may have a large rise going back onto repayment and then have the shortfall added in as well. Depending where you are in your mortgage and how long you have been on interest only this could amount to a large amount. I hope in your case it doesn't apply. But be wary.

silvercar

On the hard (money) choices:

rent vs mortgage is too simple.

Owning you also have maintenance costs, renting you have the costs of moving on a landlord's whim.

Then you have to consider the future. Rents will go up over time, mortgages will increas when the base rate increases for most, but will stabilise.

Then you have the distant future. When will you be able to buy? Can you face retirement in a rented property, risking having to move regularly and find an increasing rent on pension income?

Negative equity is not worth considering if you intend staying in your property long term It only becomes quantified if you sell and if you can avoid selling for many years eventually the negative equity will turn positive.

Maizy

There is no rent vs mortgage argument for me. Folk could go on forever about plus and negative points but this is all about personal circumstances and how we can cope with our lot at a given time. e.g. Its vital for me to have a quality life in the today to ensure we are emotionally happy and that my kids have a good life. I'm afraid in our circumstances thinking too far ahead just doesn't wash, after all there are many many folk who rent and many who don't even reach retirement age.

It makes sense that not having a mortgage to pay in old age over paying rent would be a healthier position but the reason some of us are in this position is because we cannot cope today. Its not always feasible to think about what may happen in 20-30 years time. I experienced something last year which helped me to realise that actually my bricks and mortar were not that important after all at this point in my life.

Going BR was traumatic enough without being left with the strains of our house and the debt that went with it. We feel free from all sorts and for us personally we know it was the right decision for ours and our children's futures. People should not be made to see renting as the lesser of the two options as not everyone wants to stay in their property until they retire knowing it will bring with it a heavy burden for years to come. This is where folk need to be honest with themselves. For us personally, renting was our key to freedom and we hope after discharge to put this whole sorry mess nicely behind us.

I agree with Silvercar in that if you know and intend on staying in your property long term (if you can think that way) then all well and good and eventually it may all turn around rosey for you. For some of us, its simply not our time for many reasons and we need to move on.

sundays

Kepar , im not arguing with you , just stating my case and why for me it works remaining here.
I think you did have it quite hard , and i didnt say it in previous posts but being slammed with a IPA must have made it impossible esp with a secure loan.

the point i was making, and i may be wrong and if i am i do apologise , but it worries me that, many people considering BR on this forum dont do much background research and i think come to the decision that is it lets run with it and give the home up as quickly as possible.

Rentals do work , for me if i end in up in one ive lost nothing , if it got to crunch time for whatever reason and id have to pack up and go -then fine as i have said being BR has made me practical not sentimental .
I can afford my mortage and the up keep as well as increases, time will tell .

sundays

silvercar wrote: »

On the hard (money) choices:

rent vs mortgage is too simple.

Owning you also have maintenance costs, renting you have the costs of moving on a landlord's whim.

Then you have to consider the future. Rents will go up over time, mortgages will increas when the base rate increases for most, but will stabilise.

Then you have the distant future. When will you be able to buy? Can you face retirement in a rented property, risking having to move regularly and find an increasing rent on pension income?

Negative equity is not worth considering if you intend staying in your property long term It only becomes quantified if you sell and if you can avoid selling for many years eventually the negative equity will turn positive.

i fully agree and the points i have made , for me this is the option i hope to continue with.

csfts

hello to sundays and kepar,
Interesting debate and I completely see both sides!
We have ummmed and arrghhed about bankruptcy for 2 years and and tried to struggled throughout paying pittance to a DMP (ongoing for 4 years, not to mention the 2-3 years of normal contractual payments to debtors before we started DMP) and have only seen are debts rise as we have nothing left each month and our income expenditure figures are way below recommended allowance for housekeeping and clothes etc.
Our house, in negative equity is miles away from the school my eldest of two children goes to, we chose this school for the benefit of her child minder when I was working, which fell apart due to her having special needs, these special needs are still under investigation with paediatrician and she does not cope with change, changing school is not an option presently so I pay a ridiculous amount for us both in bus travel to get her there and back daily. so living closer to the school would really save money and improve our lives, with the bad credit and negative equity and mortgage with NRAM Northern Rock we do not stand a chance of selling and remortgaging to another property.
Our home is riddled with damp which over the last 7 years we have cosmetically fixed but it needs dry coarsing...we cannot afford. The floor boards have rooted away under the laminate flooring near our back door causing a drop of about 10cm when you step there...whole floor probably needs replacing! The electric's are so old they desperately need rewiring and the main fuse keeps braking every couple of months. The front facers need replacing and the front down pipe is missing. The damp in the bathroom has rooted the wall so badly behind the skirting I can almost see daylight. Two of our radiators are so rusty they now leak if we bleed them so running on air filled system and british gas recommended our boiler should be replaced soon as its very old, it sounds like an aeroplane and cannot keep a contestant flow of hot water without overheating and cutting out. this is the major stuff i don't wish to list the nitty gritty's so for us surly you can see why hanging onto the house doesn't really feel worth it???? We wouldn't have much spare money after bankruptcy, were going bankrupt to afford to live within our means. If we remained here and payed our interest only mortgage so how could we ever fix these problems?? In a rental these are the landlord/agents problem, I know this comes with risk will it be a struggle to get them to do any matainence but there are laws to protect you etc and for us the risk is worth it!!
and again I say I agree with the debate I just felt i needed to defend ourselves as to why we do not want to remain with the mortgage!!! sundays i wish you luck to and i really hope your neg eq does come right for you ;0)

csfts

Hello everyone,
Just like to update our progress in the hopes togive hope to anyone else just starting this rollercoaster journey.
We have secured a privately rented house very veryclose to my daughters school, with a private landlord, no credit checks, nofees only one month’s rent as a deposit and a month’s rent in advance, we havea long term contract and our deposit will be held in the governments tenancy depositscheme...we move in this Sunday we are over the moon! It wasn’teasy at first tho.
We rang around several estate agents trying veryhonest and not so honest approaches to our DMP and pending repossession andbankruptcy and found we did not stand a chance, we would need a homeowner’s guarantorwho earns at least 20 times the rent a year and was a homeowner too, and we do nothave such a person. If you earn a lot a month it gets easier...we don't!!! I'veheard on here some setae agencies accept 6 months’ rent in advance to securerental, this was not offered or suggested to us but we was not yet in thatposition financially and we only rang the well know ones!! We were honest witha private landlord and he said he took it on face value and if he liked us hewould accept an extra month’s rent in advance and return to us after 6 monthsof being a good tenant, he sent us all the paperwork about the house and wewere set to sign contracts last week we he suddenly backed out and chose to gowith estate agent, by pure luck we found the house we are moving into now!! My adviceto anyone looking for private rental due to pending repossession or bankruptcyis keep your eyes wide open, save as much as you possibly can from not payingyour mortgage for as long as you can, this gives you more to bargain withprivate landlords. I have always found the advertisements go into our localpaper on a Friday and you literally have to buy the paper when the shop opensand call straight away being prepared to drop everything to view the house toensure you are first!!!
Our Bankruptcy petition is now booked for 2nd July and I already feel so relieved...but nervousto, the charity are aware and are sending a cheque made payable to HMRC for thebankruptcy fees and National debt line agree we are eligible for remissions 2or 3 for the court fees. I have started the forms butthought I'd focus on them fully next week after we have moved. I have beenhonest with NRAM and still have conflicting advice about the voluntary repossessionprocess affecting the liability of the shortfall depending on when you timesigning the forms and going bankrupt. I don’t know what order is correct so Iintend to take the advice of National Debt line and take the forms to CAB asap,while I’m there I will get assistance applying for my daughters DLA and ourHousing and council benefit. So our future looks much more like a future ;0)
On a more personal note, this all sounds positive and like it's been quiteeasy for us...trust me it was not!!! It has already been a very long journeyfor us, it wasn’t just about debt we were running away from, it was mainlyabout the fact our daughters needs resulted in me having to give up working,although we paid so so much on our childcare for her and my son, it wasn'tworth me leaving her to struggle. We dealt with a very low income for a nearlya year before it came to the crunch and what spurred us on was the fact we couldn’tmove closer to her school and bus travel is a ridiculous strain, if we couldwalk we would but its genuinely too far. (We had chosen this school withchildcare arrangements in mind a year before everything actually changed!) Ourhouse was in such negative equity and our credit file already in a state due toa 4 year DMP and debts were increasing not decreasing, house in need of repairand we needed out ASAP, bankruptcy was our sensible option, with a secured loanon the mortgage we knew repossession or sale was going to happen at some pointthrough the bankruptcy process so stopping our mortgage payments and DMP tosave for the ridiculous costs of bankruptcy was the best but most scariestthing we have ever done. My daughter was Diagnosed with Autistic SpectrumDisorder a month age, bring back to mind why this all started! The charity Turnto Us put us into are a godsend and a real life saver...maybe literally!! Myhusbands and my stress levels were through the roof and a couple of weekendsago completely out of the blue he had a severe fit during the night which wokeme, after I came to my senses I realised he needs an ambulance and he was rushedinto A n E, they could find not health reason for this other that too muchstress, he has had another fir since and is now on tablets to prevent them andwaiting for an appointment to see a neurologist to hopefully find out why, butmost likely due to stress. He has lost his driving licence because of this andhis work have made it clear he will more than likely lose his job which mostly relieson his use of the company car if he is not allowed it back for 12 months ormore He is on statutory sick leaveuntil next week he his work have agreed he can work from home (he works incomputing!)
So not having to pay the full fees allows me to not worrythat his is not going to receive his full pay due to sick leave because themoney we had saved can be used as a top up ;0) so I can carry on trying toshelter him for all the stress and take it on myself...it’s very very hard butit has actually allowed me to take full control of our situation and so far I’mdong exactly that ;0)
So going bankrupt and letting our house go is not choice it’sa necessity!!! I would not be able tohandle this all as well if it wasn’t for this forum, although I have not postedmuch, it really is amazing, you feel supported without requesting it. Thank you to everyone who helps and sharestheir story’s, it makes a huge difference and I hope mine helps someone else;0)

Watch this post I will update as we continue on ourjourney!!

:money:

KiethBEN

Only at the point of reposession (or a few weeks before) would the local authority be informed and support with housing assistance be offered but its a long process and with children.