Severe negative equity

Irishgal_2

Hi all

Not sure if this should be here or in bankruptcy.

We bought our house in the height of the market, just before the crash.

We paid £175k for the house on a 100% interest only mortgage.

We just had our house valued and it is worth £89k.

When we bought our mortgage was £850 a month when interest rates were 5.75%.

It dropped as the interest rate subsequently dropped but since it dropped to 0.5% the bank has increased our rate a number of times, so now on an interest only mortgage we are paying £850 again!

We are massively struggling to pay bills each month. We have credit card debt from having to use it to afford oil and diesel essentials. We are even struggling to pay this and have missed payments.

Clearly we can't switch mortgages and can't sell.

Does anyone have any advice? I'm not even clear if bankruptcy is an option as we are still massively in negative equity!

Any help appreciated

Thrugelmir

Do you live in Eire or NI?

Irishgal_2

Northern Ireland

Thrugelmir

Suggest you speak to

http://www.nationaldebtline.co.uk/


A free telephone service.

There's unlikely to be any easy answers I'm afraid to say.

Irishgal_2

Have consulted with a solicitor briefly but we are in unchartered territory as I'm not sure if they have seen anything as severe as this. There doesn't seem to be a precendent

piglet74

Have you spoke to your lender?

I live in NI, and I have just sold my home via the assisted voluntary sale scheme, where the lender writes off a % of the shortfall

I now rent a home for 1/3 of what my mortgage, secured loan and rates come to

Good luck with whatever you decide to do

Thrugelmir

Irishgal wrote: »

Have consulted with a solicitor briefly but we are in unchartered territory as I'm not sure if they have seen anything as severe as this. There doesn't seem to be a precendent

Precedent for what? Why the need to consult a solicitor?

Going bankrupt is sometimes the only way. Clear the debts. Start afresh. No disgrace. Just learn from the experience. Which most people do.

piglet74

Also have you posted in the NI section here, someone else may also be in the same boat

From my experience... I would say walk away, sell up (if you can get a buyer) and go

I was in the same situation this time last year, near in heart failure if I run out of oil, or the car needed taxed.. It is just not worth all the sleepless nights, worried over money and making ends meet, just to own your own home

For me, it got to the stage where struggling was no longer an option.

Its a horrible situation to be in, but I hope it all works out for you, for me... It was the best thing I ever done.

_Andy_

" sell up (if you can get a buyer)" - they can't, they wouldn't be able to redeem the mortgage

Irishgal_2

piglet74 wrote: »

Also have you posted in the NI section here, someone else may also be in the same boat

From my experience... I would say walk away, sell up (if you can get a buyer) and go

I was in the same situation this time last year, near in heart failure if I run out of oil, or the car needed taxed.. It is just not worth all the sleepless nights, worried over money and making ends meet, just to own your own home

For me, it got to the stage where struggling was no longer an option.

Its a horrible situation to be in, but I hope it all works out for you, for me... It was the best thing I ever done.

Thanks Piglet

Can I ask how much the bank wrote off for you.

My problem is not just about handing back the keys - it is the extent of the shortfall if I was able to sell my home.

And I'm not sure even bankruptcy will mean just walking away

Thrugelmir

Irishgal wrote: »

And I'm not sure even bankruptcy will mean just walking away

It more or less it is. Though you will live with the consequences through your credit record. Later on when you complete any application form which asks have you ever been made bankrupt. You may find business unwilling to deal with you.

For some people it also loses them their professional status.