Where do I go from here... advice desperately needed.

xxemmaxx_2

Hi Everyone.

Im at an absolute dead end and I really really need help.

Im sorry for the long background, I promise to keep it as short as I can but i do feel its required if theres any hope at all....

When I was 20 in 2006 myself and my ex partner both worked in seperate high street banks. It was the height of the boom and we really wanted to get on the property ladder. Mortgage was easy got as long as we got a gaurantor ( for our age as we were made to believe then) so my sister at the time being single, no responsibilities financial or otherwise decided to do us a good turn.

2 months later after completely the property crash happened.
The next year we fell pregnant with our son and asked for the mortgage to be changed to interest only to allow us to get on our feet for a few months... 18 months later in 2009 we split our seperate ways. I moved out of the home and in with my parents, but he also decided to do the same. The house was lying empty and he refused to pay his half of the mortgage, this is where our bank suggested renting it out to make sure the payments were covered. This was working well... for a year.

We had a letter come through the door in 2010 stating that the full payment was due back as it was a bridging loan... to cut a long story short in this part.. we felt missold as we wanted the same original product but changed to interest only, at no point did we want a bridging loan, but as this was done in my ex partners work place they must of saw it as the best option at the time for the lowest payment, and I stupidly enough signed. I would just like to point out my sister was never made aware of change of product.

It went on for a few months with the ombudsman involved and they said a higher monthly payment was due. So the rent came in at 460 a month and they needed us between us all to bring it up to 700 a month. that was 120 pounds a month each and we agreed.

fast forward.. I continued to keep up with my end for over a year or so but nothing was coming of the statements due to the fact my ex had completely walked away from the property and wouldnt put a penny towards it.

I continued on the best i could to try and keep them of my sisters back as she was gaurantor... but earning £70 a week self employed and renting a property of my own at £500 a week and no financial support from my sons father im sure you can see i had hit a break wall! Ive done everything in my power to keep it up but its just mounting up and up and up and i saw no way out.

In march/april of this year I handed the keys back to the bank after discussions with them on the phone they agreed it was ok to do as i really didnt have any hope of keeping 120 up a month.

I had also found out that in decemeber the tennants had already moved out and i wasnt aware until i got my quaterly statement showing me their portion wasnt coming in.

I told my sister I handed the keys back as she has a right to know if her name being on the papers, and well... she has now disowned me, wont speak to me etc...

I now do not know where to turn... the property has been on the market since april, we paid 145k for it our mortgage is now sitting at 140k and its on the market for 45k :( it doesnt look to be selling any time soon and i really cant live with this on my shoulders any longer, i made a mistake at a very young age but try to rectify it as much as i could but being on such a low income and no other help from ex partner theres no way i can do this myself, i have never had any other debts, loans credit cards etc im so careful so this isnt me

My sister since the time she signed gaurantor circumstances have changed alot, she is in a well paid job but owns her own home and has alot of loans etdc, which is now also in negative equity and naturally she is worried sick that they will try and come after her for payments she cant make or put a hold onto her house.

Please what do i do??

I dont know where to go from here after handing in the keys..

My life has came on so much, Im expecting my 2nd baby and i am getting married in 2013 so i really want this to be sorted before then so i can have a new begining, i really dont want to drag my fiance into this when its nothing to do with him at the moment, he knows about it all though.

Im so stressed and its not good for my mental health or the baby and its affecting my home life as its all that takes over my mind. My sister wont even come to my wedding and its heartbreaking when theres nothing i can do and my ex just walks away with a big smile on his face...

Most people say bankrupsy is the route to go, but without the property being sold etc the deeds would still be in my name and im worried that ill file bankrupsy and then they can still come after money which i dont have! Esp being self employed and now staying at home to raise my new born soon..

Please any insight would be helpful, a point in the right direction, im lost and im sure that really shows through the rambleing of this, so sorry its long.
Theres so much more detail about it all but it just seems not relevant now the keys have been handed back.

Please please... dreaming so bad of a new start

debtinfo

ok so first and most importantly, you need to go to the bank and get all documents for the bridging loan (BL), you need to know how much was lent under the BL, if that paid of the whole of the original mortgage, who signed the BL and who was liable under it. Without that it is hard to move forward

Mouse1812

Agree with DI, BL paperwork a must with transaction trail to see happened to original mortgage.

You also need to get a copy of the guarantee signed by your sister. In addition did she receive any legal advice about the consequences of signing it?

Don’t worry about the property being unsold if you go bankrupt, they won’t be able to chase you for any shortfall after it is sold.

xxemmaxx_2

Thanks for your replies

To be honest i have all the paperwork requested and sent through already, as i had to look into all this before i got the ombudsman involved, im not too concerned about this anymore as we did come up with an agreement with the bank afterwards and it was sent to debt management. The bridging loan documents are signed only by my ex and I but as my sis gaurantored the sum as apposed to the product she is liable, and she she did seek legal advise at the time but like anyone you never think this is going to happen to you, so we were both niave in that sense. I was just giving this part as background info, as i said we came up with an agreement since this, but it was left to me to pay by myself as i said my ex has completely brushed his hands of it and walked away, i could only do this for so long.

Really what im looking help on now is where do i go from here, how do i get the wheels in motion i really am clueless and my bank hasnt spoken to me since april time after leaving in the keys. Im really concerned as to what happens then to my sister if i file for bankrupsy.

I bought the property for 145k its now on the market for 45k and looks like its going to take ages to get sold, if it ever does! So what happens if i file for bankrupsy now and then i come up to my discharge and the property is still not sold and the deeds are still in my name, is there anyway at all do you think the bank would see i have no available finance and my ex has walked away and doesnt even pay maintance for his child never mind a mortgage payment - could they write it off without going for my sister, or if they do go for my sister see that she is also in negative equity and debt up to her eyeballs, i know this is a long shot im just looking the best outcome of a real bad situation.

I feel so awful that my sister basically hates me that much now because of all of this, if i could of sorted it myself i would continue too but i really cant..

Whats the stage of bankrupsy - i need talked to like a toddler for this subject as I really am clueless and the info im researching sounds conflicting in my mind, Im from northern ireland if anyone could point me in the right direction for here!

I look forward to your replies.

Mouse1812

OK, some very very basic stuff to start you off.

Bankruptcy is a process for dealing with your debts which prevents your creditors from taking any action against you. On bankruptcy the Official Receiver (OR) is appointed to take control of the situation.

If you have any assets (other than everyday household stuff) these may be taken and sold. The most likely loss would be your car, but not always. The OR does not visit you, they just ask if you have anything of value.

While you are bankrupt there are some things you are not allowed to do, like borrowing money without telling the lender you are bankrupt.

You may be required to make a financial contribution to the bankruptcy for three years if you have a surplus of income over basic and necessary living costs.

After a year you are usually discharged from bankruptcy and your pre bankruptcy debts are written off.

So in your case it might pan out like this:

You go bankrupt, the bank will sell the property.

It does not matter if they sell it before or after bankruptcy. The shortfall from the sale will become part of your bankruptcy debts. This shortfall will not be paid by the OR as you do not have sufficient assets or surplus income.

The bank will then look to the guarantor to pay. Your sister will either have to pay, strike a deal or go bankrupt herself.

She has a house with negative equity. The OR will not take the house and may allow her to buy back her beneficial interest in it (cost about £1,300 including fees), She may then be able to continue living there and carry on paying her mortgage. My wife and I have done just that.

As you say she has a good income she may have pay into her bankruptcy for three years, but the amount will be calculated after deducting her reasonable living expenses.

Any unsecured debts will be written off.


Before all this happens you need to take advice and plan. Read this thread and please please please call the National Debt Line 0808 808 4000 as soon as possible, its free and they can talk through your options in more detail faster than we can exchange messages here.

Make sure you have no joint accounts with you fiancee and open a basic bank account with the Co Op or Barclays.

Above all do come back and ask any questions you want.