Advice on voluntary repossession

MuddyFunster

Smiddy20 said:

Hi all.
The story is basically i have huge amount of debts so far my credit is in check and missed no payments this is due to change  end of august. The house we bought well  it was done up on the cheap and we fell for it.
It needs huge amount of repairs 
we have a low  income and also we av young children.
My thought process is there  are new build houses  to rent  near us so was thinking rent someone nice why credit is still
in check.
we have tried to sell the house before  bought for 154   Even went to low as 140  but no offers only stupid offers, but the feedback from all viewers was it needs to much repair.
The house is seriously making me so uNhappy its untrue.
I was thinking bankruptcy once rented.
Am i being crazy.

It sounds to me like you're panicking a bit. I suffer from Anxiety and I could really see me writing a post just like yours. 
Just giving the House back to the bank is a way to 'run away' from a difficult problem, but it doesn't sound like a good idea.
Without knowing too many specifics, as long as your house is safe and secure, even if it's a bit rough under the surface I'd live with it for now. 
I don't know what's going to happen to you in August, redundancy? Talk to your bank, they HAVE to listen by law, especially now. I'm sure they can find a way to get you over this rough patch. 
The housing market at the moment is about as far from 'normal' as it's ever going to be. I'd take a deep breath, accept your circumstances and aim to live in it for at least a year. 

Smiddy20

Hi thank you for your reply
so much needs to be done  electrics to  drainage, new  boiler  to new windows   House is freeIn cold in winter   a really could go on ,  hate the neighbours  worst decision of our life's.
From august our  good credit will be gone so hard to to get in a good rental 
property. I really want a fresh start  im 100%
wifes 50/50  still.

sharpe106

Try to find out the apr as that will help people advise you as well. Basically the better information you can give, the better advice you can get. 

Smiddy20

Store creds are 0%
loans r 3.2
4.1
9.9

sharpe106

Have you taken a mortgage holiday? as although over long term will cost you more it might help in getting you back on your feet. Giving the house back will make no real difference in the short term you will still have all the other debt.  

Smiddy20

Hi  ye i have took the holiday
but afford all the payments anymore.
I know my option i think by reading alot of posts.
Really feel give up the house now  and secure rental And apply for bankcrupcy

enthusiasticsaver

I don't think it is the mortgage which is the problem. The problem is the rest of your debt as the monthly repayments are almost twice as much. I also doubt that renting will be cheaper but you could explore that. If you voluntarily surrender your keys your lender will probably only sell at a high enough price to cover the mortgage maybe even less so you would lose the small amount of equity you have. Your credit record would be trashed meaning you would not pass the credit check to rent and you would still have £40k of debt. So effectively you would have made yourself homeless, trashed your credit record and be no better off. 

I think you need to explore a DMP. Contact a free charity like stepchange. Default on those loans, save up an emergency fund and then make an affordable DMP payment. This will affect your credit record for 6 years from the default date. Alternatively sell up, arrange to rent  then go into a DMP but you must be very close to defaulting anyway and I doubt your credit record is good with that amount of debt. Do you have mortgage or loan arrears? How did you get that far in debt? 

I think your your biggest problems are you not living within your income and your high amount of unsecured debt. Wanting to give the keys back because the house needs too much doing to it won't help you. 

sourcrates

Can i just ask you, is there any equity in the property at all ?

Because if there isn`t, then bankrupcy may still be an option, you would need to take advice on this obviously, but you can go bankrupt, and continue to live in your home, as long as you keep up with the mortgage obviously, the OR may not show an interest in the house, if there is no substantial equity, and if its likely to stay that way for three years, National Debtline is the place for advice on this -

https://www.nationaldebtline.org/

Failing that, all your debts are non priority and unsecured, you could go on a token payment plan, at £1 a month each, that would lessen your stress levels, give you some disposable income, and you keep the house.

Never a good move to hand back the keys for unsecured, non priority debt, worst they can do is a CCJ, paid at a rate you can afford, believe it or not, you have the upper hand of choice here, you can choose a way out of this, as all options are open to you.

Smiddy20

Hi thank you for the great advice.
I was going to secure rental before i give the house up and the new builds near me are built for renting and there some available to move in next month.
They valued it at 154 same as i bought it but needs work doing to it
i owe 139
Was on for sale for 6month went low as 140
but house is only worth as much as someone is willing to pay for it a supose.

sharpe106

If you give the house back owing £139K still you will probably end up still owing them some money anyway so is pretty pointless. If you stop paying your unsecured debts you can still afford to pay the mortgage. I think whatever you do you credit record is going to be worthless for awhile.  
The problem you are going to have now is basically how are you going to fix the house as you will not be able to borrow any more and the other main issue is how did you get into so much debt? If you go down the DMP route which is probably a good option long term how are you going to avoid it all happening again.