BR and negative equity (again)

Bella_Smythe

hiya sorry if i sound repetitive its just im having trouble getting my head around some stuff. we are almost certainly going to have to declare BR in the new year, and have probably 30-40 k negative equity in our home.
we dont like where we live, its too big for us now anyway with a big unmanageable garden and have had trouble in the past from rowdy drinking youngsters. its not terrible, but we definately dont want to be stuck here. although ideally we'd like to move on our own timescale maybe 2 1/2 or 3 years, but im not sure if that would be possible.
talking to friends last night who went BR four years ago, they said they kept there house as neg equity and been paying interest-only all this time. as their financial situation has just (this month) improved they now intend to start making repayments again. but as theyre 52 and probably owe £150000 ish that seems difficult to me? anyway, they seemed to think we'll have a choice whether to put our house and mortgage into the 'pot' and include it all in the br, in which case the OR would take it regardless of the neg eq. or hope to hang on to it, keep paying interest, but then if we eventually started trying to make repayments again we could again be responsible for the neg eq.
sorry this is long winded? and sorry if i sound thick? i cant seem to get it straight. the worse-case scenario, the one we want to avoid at all costs, is being stuck with this house.
thanks Bella

Bella_Smythe

anybody? help and actual hard facts really appreciated?

SteveABC

I think it depends on whether you want to keep the house or not.

If you leave the property (and rent, for example) and go BR, then the negative equity is usually included in your BR (as long as you declare the secured debt in your SOA).

If you want to keep the house, you can still go BR, but you must keep paying any debt secured on the property. In this case, I believe the OR will have an interest in your property for a specified period of time, and may want the beneficial interest if it returns to equity in that period.

I'm no expert, but this is what I believe the rules to be. I'm sure someone will correct me if I'm wrong. Whatever you do, you need to get professional, impartial advice.

Bella_Smythe

we definately dont want to keep the house long term. if its our only option, we'll move into rented. but we'd prefer to move on our own timescale. if thats not possible, how long will we get to find somewhere else?

doseduk

i wanted to reply to show im not ignoring but have no experience with home equity and so on in bankruptcy - however - the nature of your question about timescales does sound like something in particular that the I.S. might be able to answer better... if you make it clear you are speaking hypothetically and know each case would be looked at on its own merits, they could probably give some idea based on the hypothetical situation you describe, of how long an O.R. might give you to sort it out..

0845 602 9848 - Insolvency Service (Insolvency Enquiries) 8am-5pm
or online form: http://www.insolvencydirect.bis.gov.uk/contactus/general.htm

I know it might seem a cop out, or stating the obvious, but it is one of those things I think they'd be particularly useful for (specifics, guidelines of timescales etc).. while I'm sure the rest of what you're wanting to know others here, or indeed a chat with an advisor at the CAB perhaps, would better clarify.

Good luck - the good thing I guess is that while the property thing does create this dilemma, at least it isnt the other way around and you desperately and lovingly want to keep the property, but are struggling to figure out how... I hope you aren't left hanging for answers for too long, and as has been discussed a bit today (by me!) and mentioned earlier, do try to get an appointment to speak to an advisor with a free service like the CAB.

Good luck x

tigerfeet2006

OK if you decide not to move out of your house while BR but want to move out and put it into your BR at a later date then it is possible. But you have to stay on the same deal as you are on with the mortgage company now. You can't sign a new deal or go with a different mortgage company. If you stay on the same deal then you can move out and include any shortfall, fees etc. in the BR even if you are discharged.

You don't have to answer this on open forum but can I just ask why you want to keep the property for the moment and go BR and move out at an unspecified later date?

Bella_Smythe

its ok its not a secret. we dont like where we live, have had trouble with neighbourhood teens etc and its too big for us now anyway. but it is convenient. and my husband is at uni so we might want to move to a completely different area when he finishes. it's just easier to stay where we are for now, less upheaval, but we would move now rather than face being stuck with this and its neg equity if that was the only choices.
(i have a number of chronic health problesm, which is part of the reason for our problems with moneym coz i cant work full time and nights and overtime any more like i used to)
thanks for the info how would we actually go about 'putting it in later' to the br i am having a lot of trouble grasping this, sorry?
Bellla