Voluntary Reposession

simpywimpy

Following my posts in IVA board, my friend has now decided to go thr bankruptcy route having checked with HR it won't affect his job.

He wants to hand his house to the mortgage company (Kensington) and add the negative shortfall to the BR which will be about 20-25k.

The plan is then to move into rented accommodation. He has no other large assetts. His car is worth about 1500 but needs it for work and hosp appts. Will this be a good reason to be allowed to hang on to it?

Anyone handed the keys back that could tell us of any pitfalls he may be missing pleasE?

eveie189

I dont know much about bankruptcy but we handed our keys back when we knew there would be negative equity and it was the best thing we could have done. the house was sold by the mortgage company and we had the final settlement figure within 6 months and when they sent the statement there were no outrageous fees added. it worked out better for us than others who were selling on the street at the same time.
HTH

alastairq

The plan is then to move into rented accommodation.

I suggest this is done before the Bankruptcy petition. It will be easier to find a nice rental, without BR on one's records.

Stop paying mortgage send back keys.

Do not sign anything from the mortgagor, especially deeds of acknowledgement [of the shortfall].

If the car is essential for work, it may be exempted-as-an-asset.

The current IS guidelines for values are £1000.....but that may stretch a few hundred over, depending on the Official Receiver concerned. Values should be the lowest that can be found.

He also needs to get bank accounts [basic ] sorted before the petition.

tiggerbodhi

I posted the keys back to ym mortgage company recorded delivery, they sent a form to be filled in but as per previous advice DO NOT sign anything or fill in any forms from the mortgage company, be prepared for phone calls chasing payment, letters threatening all sorts of nasties but if the final shortfall is going into BR they are all hollow threats.

IMHO stop paying the mortgage, use the saved money to move into rented and BR fees, it will be at least three months before the mortgage company really start to chase and at that point post the keys back, ignore all pleadings from them, just let nature take its course over the re-possession, when the final statement arrives from the mortgage company you either go BR at that point or if already BR tell them your BR number, the contact at the OR and they should leave you alone, if they don't tell the OR's office.

When you leave the house you are handing back turn off the gas, electric and water, take final readings and cancel the accounts, you will have to continue to pay buildings insurance and council tax until the mortgage company take formal possession, although some councils will give you a rebate.
The final bill from the mortgage company will probably have lots of "extras" added (dont worry as included in BR anyway)
so if you need to leave rubbish behind you can, but take everything you need from the property that is not part of the building, light bulbs, carpets etc!

simpywimpy

He has a property he can move into from 21st November and has stopped mortgage payments as from the beginning of November along with the IVA and intends to phone both tomorrow and tell them of the situation/plan of action. Thanks for people's views and advice, it really does help

simpywimpy

He has phoned the mortgage company today and has to call again tomorrow to go through an SOA with them. Can he refuse to do this? He doesn't want help from them, he just wants to give the keys back!

tiggerbodhi

simpywimpy wrote: »

He has phoned the mortgage company today and has to call again tomorrow to go through an SOA with them. Can he refuse to do this? He doesn't want help from them, he just wants to give the keys back!

Yes of course he can refuse, no private company has the right to force you to disclose this sort of information, from now on the rule is ignore, don't sign, take control.


They are wasting his and their own time going through a script, once he has left the property send a recorded letter with the keys to them stating they are VR and the property is secure, tell the local police as well so they know it is empty, until he gets a formal letter to say the mortgage company has taken possession pop in every few days to check it is secure and collect post etc.

simpywimpy

He is today sending a recorded delivery letter telling them he is intending to go BR and is handing back the house. How long do you think it will be before they contact again?

tigerfeet2006

You must take last readings and inform utilities and turn off things as you will be responsible for any bills that are run up after the BR if the house hasn't been repo'd.yet. Take photo's of the last meter readings with an phone and email them to yourself the same day you phone the utilities for final bill, so you have double proof with dates on.

simpywimpy

After posted the keys recorded delivery on the wednesday, I went to collect post on saturday to find the locks had been changed and a notice put on the front door from the mortgage company.

I wasnt expecting it to be so quick but that's great. What happens next though? Am I still responsible for the council tax and insurance now they have taken it?

posted on behalf of a friend

CIS

simpywimpy wrote: »

After posted the keys recorded delivery on the wednesday, I went to collect post on saturday to find the locks had been changed and a notice put on the front door from the mortgage company.

I wasnt expecting it to be so quick but that's great. What happens next though? Am I still responsible for the council tax and insurance now they have taken it?

posted on behalf of a friend

They remain liable for the council charge until the property is sold however they can claim a Class L council tax exemption from the date of repossession.