Falling into mortgage arrears AFTER discharge from BR?

watcher27

Hi,

I have just been discharged on 16th Jan, so :j for that!

However, things at work arnt going to well, and there is a chance the company may fold, resulting in me being made redundant.

Does anyone know what the situation is with falling into mortgage arrears after BR? The house wasnt touched in BR as we are in around £30K worth of negative equity.

It's a £172K mortgage with NRAM over 25 years & we pay £975 a month @ 4.77%

Cheers

droiderm

Are you in arrears now ?

watcher27

droiderm wrote: »

Are you in arrears now ?

No, never have been!

But just thinking about the future and preparing for the possible out come if im made redundant

As you can imagine, we have no savings and just scrape by every month so I have no buffer to fall back on if it comes to the worst.

I take home £1714 a month and my wife £630, so you can imagine the panic if i loose my job

droiderm

Instead of looking what might happen if and when, would it be worth looking at what you can do in the meantime to mitigate the risk?
i.e. is it worth looking for another job? Will you get any redundancy pay? How much?

laurel48

I have to agree with Drioderm, until it happens you can only really plan. If the company folds what kind of redundancy amount would you be looking at to get? Have you done a SOA to see if any savings can be made each to month to try and put some savings away as both your combined wages aren't too bad at the moment.

Have a current CV and covering letter ready to apply for jobs and just keep an eye out on the market to see what is there but if you are going to get redundancy it would be better to wait for that IMHO as it is tax free and can be used as a monthly income for the bills whilst you look for a job.

Another important thing to do is talk to NRAM if the worse does happen. I know a lot of people have said they are a nightmare to deal with but having had them as my mortgage provider when my relationship broke down they offered payment holidays, interest only and all sorts of other options to avoid repossession, despite me pleading to as the ex refused to sell or communicate and it took 11 months of not paying a penny to get to the repo stage.

I certainly wouldn't panic, just try and plan in case it does happen and then seek advice if it does.

watcher27

Cheers for your advice guys its appreciated, but I am planning. Hence asking what would happen if one of the outcomes would be me falling behind with mortgage payments.

I'm just trying to find out what the standard practice is if arrears occur after BR. I.e I take it Im still legally responsible for them etc?
For instance if after 6 months of missed payments we give up and hand the keys back, I know im not responsible for the negative equity, but i would still be for the arrears? Bit confused is all

I have already updated my CV and have been actively applying for jobs for the last few months.

And no, nothing can be saved a month. We have only just had our AD from BR with these salaries and no BRO was set up as OR agreed there was nothing left after bills & food.

Unfortunately I've only been here just under 2 years years after being made redundant from last job (which was a major contributor to my BR) so no redundancy pay.

mysterio_2

you are correct, ANY debt after discharge is your responsibility i'm sorry to say

alastairq

since the mortgage was/is in fact a 'prior-acquired debt [and currently secured]....should the OP decide to opt for the re-possession route...[ceasing mortgage payments]....are not any arrears combined with any shortfall, thus falling into the BR?

luvchocolate

Yes that is correct as far as I know.

laurel48

I think the arrears still fall into the BR but it would probably be worth getting some advice from the CAB or other debt charities just to make sure.

The important thing to remember as you are BR is do not sign any paperwork from NRAM should you cease payments and voluntary surrender. Although I wouldn't surrender either as I think you are still liable for the council tax until they decide to sell the house unless a formal repossession order is granted and a lot of councils no longer offer such big discounts on empty properties these days.

From personal experience with them though if there is negative equity in the house they are very much keener it seems to come to a repayment arrangement as I am sure they would much rather you keep paying something towards the mortgage rather than losing a lot more if they had to repossess.

I am sure others on here may have much better advice though as I can only give my experience with NRAM whilst I have not yet gone through any bankruptcy process.