Voluntary Reposession

kentnewbie

Hi Everyone
Hoping someone can help me, I am currently in the process of saving my bankruptcy fee, and plan to go bankrupt in December (all being well) - I have just secured private rented accommodation and plan to hand back the keys to my flat (that's shared ownership and in negative equity) to my mortgage lender. They have just sent me a form to fill in, that states the usual about being liable for any fees and shortfall after the sale of the property.

Am I right in believing that I can sign this, as technically I haven't gone bankrupt yet? I want the sale of the flat done and completed asap and believe that signing this will speed things up, but just want to check I can sign it?

Thanks All xx

sourcrates

Hi,

It may be seen as disposing of assets, i would suggest you run this past National debtline first before you sign anything.

MEM62

kentnewbie wrote: »

Am I right in believing that I can sign this, as technically I haven't gone bankrupt yet?

Generally, the advice in these cases is not to sign anything. The mortgage lender may give you some BS about the repossession not being able to take place without it but that is not the case. At the very least speak to your debt advisor first.

silvercar

General advice is anything you sign before bankruptcy is safe, as the bankruptcy then over arches anything previous.

I would gather some evidence of current value (recent similar sold prices) and outstanding mortgage and any secured debt to prove negative equity and therefore repel any accusation of deprived assets.

jonesy1973

i didnt have to sign anything when i voluntarily surrended my property ( also in massive negative equity with nram) If your intentions are to go bankrupt anyway and you already have rented digs sorted, then i realy would worry about signing anything and let things run their course. all the best to you.

Mollie_Guinness15

Don't sign a thing. They'll do what they need to do eventually. Took about 18 months in my case.

kentnewbie

Surely the OR would understand for me to be allowing the property to be repossessed it's clearly in negative equity?
Issue is my local council only allows 6 weeks exemption on council tax so need to start the procedure prior to bankruptcy as cannot afford Council Tax on two homes!
Such a minefield!

CIS

kentnewbie wrote: »

Surely the OR would understand for me to be allowing the property to be repossessed it's clearly in negative equity?
Issue is my local council only allows 6 weeks exemption on council tax so need to start the procedure prior to bankruptcy as cannot afford Council Tax on two homes!
Such a minefield!

If the property was to be repossessed then it will become Council Tax exempt (i.e. until sold or disposed of).

Craig

Mollie_Guinness15

Yes, you have to pay council tax until it is legally repossessed by the building society.Your liabilty doesn't cease as soon as you return the keys.

CIS

Mollie_Guinness15 wrote: »

Yes, you have to pay council tax until it is legally repossessed by the building society.Your liabilty doesn't cease as soon as you return the keys.

Liability doesn't even end at that point, unfortunatgely - even after the property is repossessed the liability remains with the owner as far as Council Tax is concerned. There is a Class L Council Tax exemption available from the date of repossession but it's still the owners name which remains on the demand notice.

They did write a change in legislation which would move the Council Tax liability to the mortgage company but that pieces has never been full enacted.

mummyofboys1985

I handed my property back in December 2016, sold March 2017 and bankrupt July. Wasn't a problem whatsoever. My property was in negative equity and once sold left over £80,000.