Abandoning Credit Card debt, consequences?

sourcrates

There are obvious costs associated with a re-possession, re-possessed houses typically sell for around 25/30% lower than market value, as usually the bank requires a quick sale and will accept the first reasonable offer, it depends on the sale price, how much you owe in charges, fee`s and missed payments, and how much equity there is left in the property, so its hard to give a quantifiable figure beforehand.

If it gets to that stage, then any mortgage shortfall after sale, will become an issue for you both, as you would both have joint and several liability for it.

The only upside to that is these kind of debts are usually quite large, and creditors realise that those who have just been through a repossession don`t normally have large sums of cash at their disposal, so collection activity is not that aggressive, and if what they are asking is unaffordable, they will usually back off and leave you alone, or concentrate on the party that can pay.

moneytorques

sourcrates said:

There are obvious costs associated with a re-possession, re-possessed houses typically sell for around 25/30% lower than market value, as usually the bank requires a quick sale and will accept the first reasonable offer, it depends on the sale price, how much you owe in charges, fee`s and missed payments, and how much equity there is left in the property, so its hard to give a quantifiable figure beforehand.

If it gets to that stage, then any mortgage shortfall after sale, will become an issue for you both, as you would both have joint and several liability for it.

The only upside to that is these kind of debts are usually quite large, and creditors realise that those who have just been through a repossession don`t normally have large sums of cash at their disposal, so collection activity is not that aggressive, and if what they are asking is unaffordable, they will usually back off and leave you alone, or concentrate on the party that can pay.

And just to add we have a second mortgage through the Govs Help to Buy scheme which is 20% of the Value at Sale/valuation.
That would be defaulted as well.

sourcrates

moneytorques said:

sourcrates said:

There are obvious costs associated with a re-possession, re-possessed houses typically sell for around 25/30% lower than market value, as usually the bank requires a quick sale and will accept the first reasonable offer, it depends on the sale price, how much you owe in charges, fee`s and missed payments, and how much equity there is left in the property, so its hard to give a quantifiable figure beforehand.

If it gets to that stage, then any mortgage shortfall after sale, will become an issue for you both, as you would both have joint and several liability for it.

The only upside to that is these kind of debts are usually quite large, and creditors realise that those who have just been through a repossession don`t normally have large sums of cash at their disposal, so collection activity is not that aggressive, and if what they are asking is unaffordable, they will usually back off and leave you alone, or concentrate on the party that can pay.

And just to add we have a second mortgage through the Govs Help to Buy scheme which is 20% of the Value at Sale/valuation.
That would be defaulted as well.

Secured debts are paid first, outstanding mortgage, second mortgage, then secured loans, finally any other charge or fee, and if the sale price doesn't cover the debt, then what I said in my last post applies.