BR last week - repossession query

ceri123

Myself and my husband went bankrupt last week, had our telephone OR interviews today.

The OR said we now need to let the mortgage company repossess the house (we are 2 months behind). Now due to a crap valuation when we remortgaged last year, there is no equity in the house. Not quite negative equity, pretty much break even. Now my query is... when the bank repossess and presumably resell for several peanuts less than it's worth, are we going to be left with the difference still owing or is that difference included in the bankruptcy?

Tried ringing OR office back when I thought of this, but it's near impossible to get through - usually put in queue for ages then cut off, repeatedly.

Ceri

fermi

Any shortfall will be included in the bankruptcy. Plain and simple.

If the mortgage company at some point asks you to sign a voluntary surrender form then give it a good read through. They will sometimes state that you are liable for legal costs, sale fee's, and shortfall.

You are not liable, but if you cross out those terms on the forms then it can save an argument between the OR and the mortgage company and lots of hassle.

Have a good read through this thread on another site:

http://www.debtquestions.co.uk/debt_forum/viewtopic.php?t=21433

ceri123

Thank you SO much for that. You've put my mind at rest on that one. Any forms, I will be going through with a fine toothed comb.

Ceri

Richard_S

Hi ceri,

What fermi says is spot on and I can't add anything there.

I don't know what you're planning on doing about housing; presumably moving into rented accomodation. Are you aware that if there's little or negative equity you can purchase the O.R's Beneficial Interest in the house for a nominal £1 + O.R's legal costs of £213. The arrears are not significant and you'll be able to come to an agreement with your bank about those.

It's worth considering depending on the cost or renting compared to paying your mortgage.

Regards

Richard

ceri123

My next question is, do I need to just sit and wait for repossession to happen or am I better off contacting the bank and getting the ball rolling quicker myself?

Ceri

silvercar

Are you sure you want to be repossessed? With no equity in the house, provided that the mortgage and other home owning costs are as low as renting, why not stay put?

Richard_S

silvercar wrote: »

Are you sure you want to be repossessed? With no equity in the house, provided that the mortgage and other home owning costs are as low as renting, why not stay put?

Hi silvercar,

That's what I posted, but if you look at Ceri's other post the mortgage is far more than renting would be, and her current house needs a lot of work doing on it and it's not in a particularly desirable area.

Richard

ceri123

OK... so we went bankrupt back early December. We now have letters from HSBC's solicitors re. repossession proceedings. Well, in fact its the threat of proceedings if we don't pay arrears by next Thursday.

Now, we actually want them to repossess. The mortgage repayments were beyond us anyway, there is no equity (possibly even negative equity) in the property.

A few things...

1) Can I just confirm...providing we don't stupidly sign anything containing a clause saying as such, we are not liable for any shortfall due to the bankruptcy? And does the same apply to the legal costs? It's just that the letter threatens that we are liable for both.

2) Will it be beneficial for us to go for voluntary repossession? We are moving into rented accommodation any week anyway.

3) How do we do that? Do I just write saying we want to go for voluntary repossession?

Sorry, am just very jittery about it all. Am terrified we'll have gone through the bankruptcy but still be in the proverbial financial !!!! after the repossession.

Thanks,
Ceri

ceri123

Bump... really stuck as to how to proceed in response to solicitor's letter. Need to respond this week.

tigerfeet2006

Sorry Ceri houses are not my thing. Send a quick pm to debt doctor or Richard and ask them to look at this thread.

fermi

ceri123 wrote: »

1) Can I just confirm...providing we don't stupidly sign anything containing a clause saying as such, we are not liable for any shortfall due to the bankruptcy? And does the same apply to the legal costs? It's just that the letter threatens that we are liable for both.

HSBC can write whatever they like in a letter. That doesn't make it true. You are not liable for the legal costs either.
Just don't sign anything that says you are, or make sure that you cross out any offending bits if you do.
HSBC can bluff and bluster, but the can't change insolvency law.

2) Will it be beneficial for us to go for voluntary repossession? We are moving into rented accommodation any week anyway.

I can't see it would make much difference as far as the OR is concerned, and they are the only ones that matter. I would do whatever is most convenient for you.

Maybe Richard etc can say otherwise, but that is the way I see it.

3) How do we do that? Do I just write saying we want to go for voluntary repossession?

I would presume so.

I'll get Richard_S to have a look when he is about.