Negative equity and a few other questions

hButterflyH

Hi, I have only recently discovered this site. Wish I had found it sooner, its great.

I made myself bankrupt in July 2012 and am currently paying into an IPA.

My house is in negative equity and so the OR is not interested in it.

However I have been burgled twice, firework through the door, window smashed etc etc and no do not feel safe living here, alone with my 3 year old daughter.

I am considering surrendering the property and from what I understand any shortfull will be included in my bankruptcy.

How long will it take to be reposessed if I stop paying my mortgage payments? I need to be able to save up for a deposit in order to rent. If I stop paying the mortgage will I need to tell the OR for the purposes of my IPA? Will they want me to pay the money to them?

I am so torn as to what to do. I dont want to struggle to pay the mortgage on a house that has caused me nothing but problems and then find down the line that it is still in negative equity and regret not getting rid of it while I had the chance. I want this to be the end of debt for me.

Also want to add that although I had debt it was all up to date with no missed payments until my husband decided to leave and not pay anything towards the house or debts.

Many thanks

sniggings

hButterflyH wrote: »

Hi, I have only recently discovered this site. Wish I had found it sooner, its great.

I made myself bankrupt in July 2012 and am currently paying into an IPA.

My house is in negative equity and so the OR is not interested in it.

However I have been burgled twice, firework through the door, window smashed etc etc and no do not feel safe living here, alone with my 3 year old daughter.

I am considering surrendering the property and from what I understand any shortfull will be included in my bankruptcy.

How long will it take to be reposessed if I stop paying my mortgage payments? months, so you will have time to saveI need to be able to save up for a deposit in order to rent. If I stop paying the mortgage will I need to tell the OR for the purposes of my IPA? yes you need to tell the OR, you really need to keep your OR informed from the start Will they want me to pay the money to them? depends if the rent is the same as the mortgage payment, all excess is paid into an IPA so if rent is less and other expenses stay the sam e then, yes but travel costs etc may go up with a move, so it all depends.

I am so torn as to what to do. I dont want to struggle to pay the mortgage on a house that has caused me nothing but problems and then find down the line that it is still in negative equity and regret not getting rid of it while I had the chance. I want this to be the end of debt for me. you need to work out if a rental property will give you what you are looking for, don't think a rental is trouble free, they too have issues, but it's up to you to work which will be the best option for you.

Also want to add that although I had debt it was all up to date with no missed payments until my husband decided to leave and not pay anything towards the house or debts.

Many thanks

remember not to sign anything from the mortage company to say you will pay the short fall, they have been know to trick people into signing, as once you sign the debt is then a new debt and can not go into the BR.

hButterflyH

Thanks sniggings,

What I mean is if I stop paying the mortgage, I will obviously have that money 'spare' to put aside for rent. Do I need to tell them I am not paying the mortgage while I save a deposit and will they want the money for my IPA (thus not allowing me to save it). Sorry if that wasnt clear the first time

sniggings

it was clear, that's why I said you really need to tell your OR what you intend to do.

You have signed a legal agreement that you will inform the OR of any changes of income.

Your OR will work with you to allow you to save for a deposit etc so don't be worried about that, remember an IPA is an agreement so unless you are happy with it, don't sign a new one, until you are.

Deposits etc are reasonable living expenses, so no reason why the OR would not allow you to save for a deposit on a rental property.

PippaGirl_2

I would just say that renting isn't a bed of roses. I was moved on by landlords twice in two years through no fault of my own and the stress and financial cost of that pushed me towards BR. The first LL wanted to change agency to cheaper fees which meant I had to leave, the second unexpectedly had to return to their house to live. I was homeless twice. The insecurity was more than I could cope with. Each has to a certain extent has different contents needs, all finance costs too. Neighbours at times haven't been great either. I say this because if your payments are currently up to date where you are, the OR isn't interested in your prooerty due to no equity and the main problem seems to be the area, be aware that your area and neighbours may not be any better and even if your first move means an inprovement when renting you can be moved on at any time. Something to think about anyway.

sort_me_own_yard_out

I second what Pippa says, I have moved 3 times within as many years due to being in rental properties. The second was like a show home absolutely beautiful but I wasn't even allowed to put anything on the wall this included towel rails, loo roll holder and pictures. Unless you get social housing (which even with two young children 5yr old & 4mth old) an eviction notice from my military housing i was unable to get) there is very little security with renting. Please consider if renting would let you move to an area that would let you feel safe in your own home again. Would you need your children to change schools etc? You may also need a guarantor I needed one with a decent credit rating and working but they said my income wasn't sufficient and my poor parents had to come to the rescue!

I hope you come to a decision I cant imagine it being an easy one bless you!

sort_me_own_yard_out

sorry just seen your child is 3yr old so school wouldnt be an issue!!

Lou67

Hi Butterfly. My two cents..... You could just stop paying your mortgage for a short while and then go for voluntary surrender. And obviously, the amount of time it will take you to save the first month's rent and deposit on another property depends on how much the rent and deposit is on another place. (And don't forget to tailor in removal fees and admin fees for a property agent : should you use one.)

So I guess if your rental property is £550 a month and your mortgage is £600, then you need to stop paying for say 3 or 4 months, and then you should have enough money to could go for voluntary surrender and get private let. We went for voluntary surrender when we realised that 6 months after our bankruptcy; the house was still in our name and had not been repossessed. (We were mistakenly informed by the OR that we need do nothing else, as they will take the property. But that is another story!) Once we put the voluntary surrender form in, it took 2 weeks for them to repossess.

Another thing you must remember is that landlords and property agents do credit checks, so you will need to seek out a very understanding one, who will be OK with your bad credit record.

I must admit that I didn't know it was possible to keep living in the house and paying the mortgage after bankruptcy. You learn something new every day!

Despite what a few others have said on here; I must say that although private rent has a lack of security to it, there are many landlords and property agents that can offer places that are long term, and I think that the posters on here, have been unlucky, and what happened to them, isn't necessarily going to happen to you. One of my pals has rented a house privately for 8 years in Plymouth and her other sister rents privately in Southampton - and she has had the same flat with her partner for 11 years.

We have been in this house now for 2 years, since the bankruptcy, and the landlady is happy to keep renting it out. Also, many social landlords are not offering permanent tenancies now (although they will probably be more secure than private let.) I have had a few repairs issues with the landlady, and this house isn't brilliant, but it is in decent condition, and I know a number of people who have council properties, that are in much worse condition, and the council are rarely in a rush to repair things! On the whole, the landlady is fine, and we do eventually get things sorted. And if the repair has been urgent, it has been done reasonably quick.

The insecurity of 'private let' is well worth it to us to be free of our debts. We may not have a secure tenancy, but we also have no mortgage, no insurances (apart from home contents,) no gas contract to pay for, no repairs to fork out for, and we are not tied to this property if we get fed up or get crap neighbours. We want to move out of here in the springtime when the tenancy ends, and don't think that moving is a big deal (although I get that it is for some.) We may even move out of the area, as our daughter goes to uni next year, and my hubby has a job where he can transfer to another town within a few weeks if he needed to.

Since we went bankrupt and got rid of our house and went into private let, we have never been happier with our debt free life and total freedom. The 'insecurity' of private let, is a minuscule price to pay, and is literally the only drawback of going bankrupt and letting our house go. I would not for one nanosecond have kept our old home, for all the tea in China; even if the OR had offered it to us. The idea was to be free of all our debts and ties. But that's just us. We were tied up with debts and mortgages and insurances and high repair and maintenance bills for almost 20 years, and nothing would make me go back. I would not buy a property again if you paid me.

hButterflyH

Thank you so much for taking the time to reply. I have an appointment with a housing officer in a couple of weeks to talk it through with somebody. I have had so many problems living here. I would prefer to find a long term rent but I am willing to take the risk of having to move again to get away from where I am now. I will hopefull be able to move to an area where there is a good school for my daughter.
I think this decision is actually harder then the decision to go bankrupt in the first instance! I will let you know how I get on.

Thanks again

sniggings

Thanks for updating us.

Hope it all works out for you :beer:

Maizy

Hi Butterfly

I really feel for your situation, there is nothing worse than not feeling safe and having bad neighbours etc. Like Lou we went BR and needed to be rid of all the burdens, the house included. Negative equity and repairs hanging over our heads just wasn't what we needed having gone through all of this. We rented for a year which was fab & were then offered social housing (been on the list for years) and we couldn't be happier (neighbours the best too).

Its important to remember that everyone has a different experience and we cannot mirror other people's but certainly don't rule any option out.

Really what I think I'm posting for is to say I understand the turmoil that you may be going through. Not exactly a nice feeling paying a mortgage for years then having to give it all up and the stress having children in the mix can add sometimes cannot be explained. Coming through the other side and being able to move on with your life is a different story and we are glad to be in that position.

As advised, have a chat with your OR asap I'm sure something can be worked out with regards to saving for rent/bond etc and you may find peace for you and your child once you move. We were also willing to risk the 'rental issues' simply to free ourselves from many a thing so do what is right for you on a personal level.