Secured to unsecured?

Slackcote

Hi,

Can ask for some advice please? I had a secured loan against my house. I voluntarily handed my house back to the mortgage company due to my horrendous financial difficulties during a relationship break-up. I had applied for a shortfall decision from the secured loan lender as there would not be enough equity in the house when it was sold by the mortgage company. This was declined. The house was sold after about 7 months which cleared the outstanding mortgage and gave the loan lender about £26k. However there was still a substantial amount still outstanding. My question is how is the loan considered now? as a secured one or unsecured one? I have other debts with credit cards and wondered are they more, less or of the same importance to the loan company who I guess can't threaten me with repossession of a house that has now long gone!

Thanks in advance for your views on this.

Tixy

It has now become unsecured so in terms of priority would rank alongside other unsecured credit debts such as credit cards.

As you say nothing left of their security to reposess.
You don't own any other properties presumably (that they may consider seeking court action to try to get a charging order against)?

Slackcote

Many thanks for reply Tixy. No I have no other properties and probably never will again! I have a fixed rate repayment plan in place with them BUT they will only do this a year at a time. They will then come "calling" again at year end to try and get higher repayments...in the region of £720! Unfortunately the original loan was NOT on a fixed interest rate and they are saying the original T&C's are still in place so will not agree to a long term FIXED rate repayment plan. This is very worrying as there seems no end to the loan and you cannot plan financially long term as you don't know what they are going to ask for at year end!

poppasmurf_bewdley

Would you qualify for a Debt Relief Order?

As you have already lost so much, I think a DRO may help you to start over with a clean slate.

http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx

Slackcote

Hi......Many thanks for that....Unfortunately my debts are a lot over £15k!....but thanks for the advice.

Tixy

Have you considered/ taken advice on bankruptcy even?

poppasmurf_bewdley

Slackcote wrote: »

Hi......Many thanks for that....Unfortunately my debts are a lot over £15k!....but thanks for the advice.

Maybe bankruptcy may be a possibility for you? Frequently, you could be out of bankruptcy with 12 months or so and your credit file will be clear in six years.

It would be a pity to have lost so much already and still not be able to wipe the slate clean.