Voluntary Surrender of property

wobblymummy

Hi there

I am looking for some advice as we are about to surrender our property to the lender after falling in arrears.

We moved out of the property due to severe ASB and we rehoused by a Housing Association.

We have been trying to maintain the mortgage and the rent on our new house but it has gotten too much and we have fallen into arrears, the lender is now taking us to court for repossession, which is pointless as we are not trying to hang onto the property, we just want to sell it to ensure we get a decent amount even though this will leave us with a shortfall debt.

The property has been up for sale since June last year and has only been viewed twice. We have not recieved any offers on it despite lowering the price, the lender is aware of all this.

We have got a form to surrender the property voluntarily now as we are only going to incur more costs if is repossessed.

We are realistic and even though we could attend court to ask for more time to sell we are only prolonging the inevitable, we dont want to live in the property (which is now in negative equity also) so why would anyone want to buy it.

We are realistic about the shortfall and have maintained contact with the lender throughout, but they advise us that even surrendering the property voluntarily we will incur fees of up to 5k for them to change the locks and actually sell the property itself.

We understand that we need to ensure the property is completely empty but how do we know that we are just not going to get stung for charges anyway as frankly anyone could say anything and bill us for it. We realise we are liable for costs and the shortfall once a sale occures but we could end up paying out for anything.

We have an appointment with a solicitor over the phone on Friday if anyone can give us any info or good questions to ask we would really appreciate it. We dont want to go into this totally unawares.

Many thanks

WM

National_Debtline

Hi WM

There is no guarantee that a court would grant you more time to sell in any case; the FSA mortgage rules in place since 2004 simply state that a lender must obtain the "best price that might reasonably be paid" in such circumstances. This is obviously very difficult to define. It sounds as if you will end up owing a substantial shortfall. Any fees/costs incurred for things such as locksmiths and auctioneers will simply be tagged on to the overall amount that you owe.

While we don't know anything about your broader circumstances, it is worth pointing out that a lot of people in these situations end up deciding to declare themselves bankrupt, especially if the shortfall debt becomes very large. Bankrupcty is no means the only option you may have but at leasrt it carries the reassurance that any extra fees/costs added by the lender will make little difference.

All the best

NDL

wobblymummy

Thank you for your reply. We are going to do an IVA once the property as sold, we cant go bankrupt because of employment issues.

We just dont want to end up owing more than we need to and want to minimise the debt if at all possible

Thanks again :j