Mortgage/Secured Loan shortfall...

jace65

Hi All,

This is my first post and not sure if I'm in the right place, but hopefully someone will be able to help.

I have a mortgage with a balance of £161,000 and a secured loan (with Firstplus!!) with a balance of £49,000. I am self employed, but am getting less and less work.

The secured loan is our biggest problem, so for the past year and a half I have been trying to sell the house. Have had no offers despite reducing the price several times. At the moment the house is up for £208,500 but is still not getting any offers!!! Total unsecured debts are: Personal £5000, Credit cards £4000 and rising.

Credit cards are now being used just to survive and as of next month I won't have enough to pay the mortgage and secured loan as I have no work this month!! My husband is in remission from cancer and has had to move in with his parents in Spain, because the stress of trying to juggle everything was getting too much. We have used up all our savings just to survive the last year. I've been looking for a permanent job, but again no luck on that front!!

So far I haven't missed any payments and have never defaulted, but that will all change next month and from there on it will get worse! The house isn't selling (not helped by the neighbours from hell!!) and the only option seems repossession as it's just not worth my or my husbands health to try and hang on.

What can I do? What are my options..............I know this doesn't sound too bad, but my health is suffering from this and I don't want my husband under any more stress. I can see no way out. All that is in front of us now is more debt.

I don't want to just walk away from any responsibility, but I'm getting to the point of having no money and no assets and I'd really like to be with my husband. At least living with his parents will help us get on our feet.

Any suggestions please??
J

Tixy

Have you had any advice from the debt advice charities? If not then I would suggest that you speak to one of them - and get advice on your situation.
They'll be able to tell you the process and timescale if you decide to hand back the house to the mortgage company and walk away. That option would ultimately leave you with a shortfall amount owing on the first plus debt which you either decide to tackle then, or consider bankruptcy as an option - which might be more appropriate if you also have card debts that you cannot afford to pay.
Its not a decision to take lightly of course - but it does sound like it might be the most sensible action in your circumstances.

mrsrwallace

jace65 i feel for you and am in a similar financial situation where i am trying to sell my house and will have an inevitable shortfall if and when i manage to sell it so i can understand and relate to the worry and pressure of all that.

the difference between us though is that my OH is at home with me and we are in good health (albeit stressed, we are never ill - touch wood!) so from that angle I can see how much more you're having to deal with. Health will always come before money in my opinion, if it was me and i was in your shoes I'd want to be with my OH too and I think that as you say this debt will always be around you.

On a practical and realistic point, you will soon have no income and no means to pay this debt and it will spiral further. I would go and speak to CAB although I would probably say an insolvency practitioner would be your best bet as there is a large debt here - I don't know what to suggest. You could consider bankruptcy but your house would need to be sold first to take the shortfall into the BR. Or you could let the lender repossess. I think with those sums of money you'll be hardpressed to pay it back and you need to consider your health and that of your OH.

There will be someone more knowledgeable along soon to advise you better.

jace65

Hi Tixy,

Thank you for your reply. Yes, I did contact one of the charities, but they could only offer me advice about the unsecured debt that I have and suggested if my circumstances change to contact them again.

The problem is that I can only see this getting far worse, at the moment the unsecured debt isn't as high as some people and because we've kept up to date with everything so far, it doesn't seem that bad!! But it is!! We've really reached the end of the line trying to keep this house at the detriment to my husbands health.

At the moment I'm staring into the unknown, but I'm trying to reasonable and sort it out before we have an even bigger debt. Until my husbands ill health, we were OK, but we just can't keep this going!!
J

jace65

I'm really starting to stress over this.............with my husband away and being here on my own I have nothing else to think about other than this!!! All I'm doing is searching online for guidance or help!

Please is there anyone that can help?? If I go down the possible Bankruptcy route, when do I do this?? Before or after the house is repossessed? I'm fairly certain now that a voluntary repossession is my only answer, but if I do this I will move abroad straight away to be with my husband. How does affect how I deal with the debt or bankruptcy?
Can I include the secured loan as I'm assuming the house will take a while to sell?
I don't want to bury my head in the sand over this, but I just don't know which way to turn!!!

Please, if anyone can help..............
J

National_Debtline

Hi jace65

We're sorry that you didn't get all the advice that you needed when contacting a debt advice charity.

It is indeed possible to petition for bankruptcy before the house has been sold/repossessed. Details of the mortgage and secured loan would be given in the secured debt section of your bankruptcy Statement of Affairs. Any shortfall subsequently arising from the property's sale, regardless of timing, would be "provable" in the bankruptcy.

Hope this helps

NDL

Depth_Charge

jace65 wrote: »

Hi All,

This is my first post and not sure if I'm in the right place, but hopefully someone will be able to help.

I have a mortgage with a balance of £161,000 and a secured loan (with Firstplus!!) with a balance of £49,000. I am self employed, but am getting less and less work.

The secured loan is our biggest problem, so for the past year and a half I have been trying to sell the house. Have had no offers despite reducing the price several times. At the moment the house is up for £208,500 but is still not getting any offers!!! Total unsecured debts are: Personal £5000, Credit cards £4000 and rising.

Credit cards are now being used just to survive and as of next month I won't have enough to pay the mortgage and secured loan as I have no work this month!! My husband is in remission from cancer and has had to move in with his parents in Spain, because the stress of trying to juggle everything was getting too much. We have used up all our savings just to survive the last year. I've been looking for a permanent job, but again no luck on that front!!

So far I haven't missed any payments and have never defaulted, but that will all change next month and from there on it will get worse! The house isn't selling (not helped by the neighbours from hell!!) and the only option seems repossession as it's just not worth my or my husbands health to try and hang on.

What can I do? What are my options..............I know this doesn't sound too bad, but my health is suffering from this and I don't want my husband under any more stress. I can see no way out. All that is in front of us now is more debt.

I don't want to just walk away from any responsibility, but I'm getting to the point of having no money and no assets and I'd really like to be with my husband. At least living with his parents will help us get on our feet.

Any suggestions please??
J

Hi jace

Could you put up your full Statement of Affairs?

Is your husband joint on the mortgage & secured loans and has he non-priority debts, joint with you or otherwise?

Are you using credit of any form to keep your self -employment going?

Shelter information link below on handing back the keys

http://england.shelter.org.uk/get_advice/debt_and_arrears/mortgage_arrears/handing_back_the_keys

Bankruptcy could be the best long term option but difficult to say given the information so far

Which charity have you spoken to?

Have a look through the CAB & CCCS debt remedy tools & information resources below, they might give you some pointers

https://debtremedy.cccs.co.uk/start.aspx

http://mymoney.nedcab.org.uk/moneyadvice/

A word of support is that debt problems can always be sorted?