Interest only mortgage with mortgage term ending and struggling to sell, thinking of going bankrupt.

Iansellers

enthusiasticsaver said:

I can see why you are overwhelmed but taking the nuclear action of handing the keys back, going bankrupt, giving up your job and moving in with family is one option but not the only one.  You say that approaching your current lender is not an option presumably due to the length of the lease? They may be flexible on this given your interest only mortgage is already with them and these days repossession is very much a last resort.

As your other debt is manageable  I would not rush to hand keys back and jump straight to handing back keys. Why would you need to give your job up? To avoid an attachment of earnings?  What will you live off given you will be resigning so unlikely to get much in the way of benefits or is your family offering to support you with living expenses as well as housing you? 

Staying put is another option and making an agreement with your current lender may be the less stressful in the end for you.  How much is the mortgage and what is the value of the flat as it stands with the short lease?  

None of this will be quick so it may well be a lot longer than 6 years and bankruptcy has all sorts of other implications not just on credit applications but renting applications should you decide living with family doesn't work and on future jobs. Also as sourcrates says you should hold off on bankruptcy until the property is actually repossessed or surrendered and the presumed negative equity is a reality. The charging order comes after the mortgage in priority. The negative equity and any other unsecured debt comes last. 

 I am not saying you should not do it but it is something you should carefully consider.  

Thanks for your replay, I really appreciate the ideas and exactly the reason why I'm pleased to have found this website.

When you say it could be a lot longer than 6 years, what do you mean by this? I was under the impression if I went bankrupt, all debt outstanding would be dated the day of my bankruptcy date and then drop off my credit file on the 6th anniversary of the date of my bankruptcy date? Could the bankruptcy and all the bad debt be showing for many years after the 6th anniversary of bankruptcy date?

I understand the possible implications on potential future jobs and renting places, it's not good but something I'll have to accept. I do have a very supportive family that I can rely on to live with indefinitely.

The flat is effectively worth very little at the moment as only cash buyers will buy it and they want everything for a bargain, figures I've been offered as a ball park figure isn't a figure I can work with to clear both my charging order and mortgage.

silvercar

Iansellers said:

enthusiasticsaver said:

I can see why you are overwhelmed but taking the nuclear action of handing the keys back, going bankrupt, giving up your job and moving in with family is one option but not the only one.  You say that approaching your current lender is not an option presumably due to the length of the lease? They may be flexible on this given your interest only mortgage is already with them and these days repossession is very much a last resort.

As your other debt is manageable  I would not rush to hand keys back and jump straight to handing back keys. Why would you need to give your job up? To avoid an attachment of earnings?  What will you live off given you will be resigning so unlikely to get much in the way of benefits or is your family offering to support you with living expenses as well as housing you? 

Staying put is another option and making an agreement with your current lender may be the less stressful in the end for you.  How much is the mortgage and what is the value of the flat as it stands with the short lease?  

None of this will be quick so it may well be a lot longer than 6 years and bankruptcy has all sorts of other implications not just on credit applications but renting applications should you decide living with family doesn't work and on future jobs. Also as sourcrates says you should hold off on bankruptcy until the property is actually repossessed or surrendered and the presumed negative equity is a reality. The charging order comes after the mortgage in priority. The negative equity and any other unsecured debt comes last. 

 I am not saying you should not do it but it is something you should carefully consider.  

Thanks for your replay, I really appreciate the ideas and exactly the reason why I'm pleased to have found this website.

When you say it could be a lot longer than 6 years, what do you mean by this? I was under the impression if I went bankrupt, all debt outstanding would be dated the day of my bankruptcy date and then drop off my credit file on the 6th anniversary of the date of my bankruptcy date? Could the bankruptcy and all the bad debt be showing for many years after the 6th anniversary of bankruptcy date?

I understand the possible implications on potential future jobs and renting places, it's not good but something I'll have to accept. I do have a very supportive family that I can rely on to live with indefinitely.

The flat is effectively worth very little at the moment as only cash buyers will buy it and they want everything for a bargain, figures I've been offered as a ball park figure isn't a figure I can work with to clear both my charging order and mortgage.

According to citizens advice it would be 12 years for the debt on the property as that is secured: 

For most debts, the time limit is 6 years since you last wrote to them or made a payment.

The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

Source:

Iansellers

silvercar said:

Iansellers said:

enthusiasticsaver said:

I can see why you are overwhelmed but taking the nuclear action of handing the keys back, going bankrupt, giving up your job and moving in with family is one option but not the only one.  You say that approaching your current lender is not an option presumably due to the length of the lease? They may be flexible on this given your interest only mortgage is already with them and these days repossession is very much a last resort.

As your other debt is manageable  I would not rush to hand keys back and jump straight to handing back keys. Why would you need to give your job up? To avoid an attachment of earnings?  What will you live off given you will be resigning so unlikely to get much in the way of benefits or is your family offering to support you with living expenses as well as housing you? 

Staying put is another option and making an agreement with your current lender may be the less stressful in the end for you.  How much is the mortgage and what is the value of the flat as it stands with the short lease?  

None of this will be quick so it may well be a lot longer than 6 years and bankruptcy has all sorts of other implications not just on credit applications but renting applications should you decide living with family doesn't work and on future jobs. Also as sourcrates says you should hold off on bankruptcy until the property is actually repossessed or surrendered and the presumed negative equity is a reality. The charging order comes after the mortgage in priority. The negative equity and any other unsecured debt comes last. 

 I am not saying you should not do it but it is something you should carefully consider.  

Thanks for your replay, I really appreciate the ideas and exactly the reason why I'm pleased to have found this website.

When you say it could be a lot longer than 6 years, what do you mean by this? I was under the impression if I went bankrupt, all debt outstanding would be dated the day of my bankruptcy date and then drop off my credit file on the 6th anniversary of the date of my bankruptcy date? Could the bankruptcy and all the bad debt be showing for many years after the 6th anniversary of bankruptcy date?

I understand the possible implications on potential future jobs and renting places, it's not good but something I'll have to accept. I do have a very supportive family that I can rely on to live with indefinitely.

The flat is effectively worth very little at the moment as only cash buyers will buy it and they want everything for a bargain, figures I've been offered as a ball park figure isn't a figure I can work with to clear both my charging order and mortgage.

According to citizens advice it would be 12 years for the debt on the property as that is secured: 

For most debts, the time limit is 6 years since you last wrote to them or made a payment.

The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

Source:

Oh, 12 years on my credit file is a long time. I wasn't aware of that, thank you for that piece of information.

Iansellers

Iansellers said:

silvercar said:

Iansellers said:

enthusiasticsaver said:

I can see why you are overwhelmed but taking the nuclear action of handing the keys back, going bankrupt, giving up your job and moving in with family is one option but not the only one.  You say that approaching your current lender is not an option presumably due to the length of the lease? They may be flexible on this given your interest only mortgage is already with them and these days repossession is very much a last resort.

As your other debt is manageable  I would not rush to hand keys back and jump straight to handing back keys. Why would you need to give your job up? To avoid an attachment of earnings?  What will you live off given you will be resigning so unlikely to get much in the way of benefits or is your family offering to support you with living expenses as well as housing you? 

Staying put is another option and making an agreement with your current lender may be the less stressful in the end for you.  How much is the mortgage and what is the value of the flat as it stands with the short lease?  

None of this will be quick so it may well be a lot longer than 6 years and bankruptcy has all sorts of other implications not just on credit applications but renting applications should you decide living with family doesn't work and on future jobs. Also as sourcrates says you should hold off on bankruptcy until the property is actually repossessed or surrendered and the presumed negative equity is a reality. The charging order comes after the mortgage in priority. The negative equity and any other unsecured debt comes last. 

 I am not saying you should not do it but it is something you should carefully consider.  

Thanks for your replay, I really appreciate the ideas and exactly the reason why I'm pleased to have found this website.

When you say it could be a lot longer than 6 years, what do you mean by this? I was under the impression if I went bankrupt, all debt outstanding would be dated the day of my bankruptcy date and then drop off my credit file on the 6th anniversary of the date of my bankruptcy date? Could the bankruptcy and all the bad debt be showing for many years after the 6th anniversary of bankruptcy date?

I understand the possible implications on potential future jobs and renting places, it's not good but something I'll have to accept. I do have a very supportive family that I can rely on to live with indefinitely.

The flat is effectively worth very little at the moment as only cash buyers will buy it and they want everything for a bargain, figures I've been offered as a ball park figure isn't a figure I can work with to clear both my charging order and mortgage.

According to citizens advice it would be 12 years for the debt on the property as that is secured: 

For most debts, the time limit is 6 years since you last wrote to them or made a payment.

The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

Source:

Oh, 12 years on my credit file is a long time. I wasn't aware of that, thank you for that piece of information.

I've just checked that information on citizens advice website. I'm not sure if it relates to bankruptcy.....For most debts, if you’re liable your creditor has to take action against you within a certain time limit. Taking action means they send you court papers telling you they’re going to take you to court.

Can anyone clarify?

Thanks

JCS1

The 12 years relates to statue of limitations for secured debt, not to do with credit file reporting 

JCS1

silvercar said:

Iansellers said:

enthusiasticsaver said:

I can see why you are overwhelmed but taking the nuclear action of handing the keys back, going bankrupt, giving up your job and moving in with family is one option but not the only one.  You say that approaching your current lender is not an option presumably due to the length of the lease? They may be flexible on this given your interest only mortgage is already with them and these days repossession is very much a last resort.

As your other debt is manageable  I would not rush to hand keys back and jump straight to handing back keys. Why would you need to give your job up? To avoid an attachment of earnings?  What will you live off given you will be resigning so unlikely to get much in the way of benefits or is your family offering to support you with living expenses as well as housing you? 

Staying put is another option and making an agreement with your current lender may be the less stressful in the end for you.  How much is the mortgage and what is the value of the flat as it stands with the short lease?  

None of this will be quick so it may well be a lot longer than 6 years and bankruptcy has all sorts of other implications not just on credit applications but renting applications should you decide living with family doesn't work and on future jobs. Also as sourcrates says you should hold off on bankruptcy until the property is actually repossessed or surrendered and the presumed negative equity is a reality. The charging order comes after the mortgage in priority. The negative equity and any other unsecured debt comes last. 

 I am not saying you should not do it but it is something you should carefully consider.  

Thanks for your replay, I really appreciate the ideas and exactly the reason why I'm pleased to have found this website.

When you say it could be a lot longer than 6 years, what do you mean by this? I was under the impression if I went bankrupt, all debt outstanding would be dated the day of my bankruptcy date and then drop off my credit file on the 6th anniversary of the date of my bankruptcy date? Could the bankruptcy and all the bad debt be showing for many years after the 6th anniversary of bankruptcy date?

I understand the possible implications on potential future jobs and renting places, it's not good but something I'll have to accept. I do have a very supportive family that I can rely on to live with indefinitely.

The flat is effectively worth very little at the moment as only cash buyers will buy it and they want everything for a bargain, figures I've been offered as a ball park figure isn't a figure I can work with to clear both my charging order and mortgage.

According to citizens advice it would be 12 years for the debt on the property as that is secured: 

For most debts, the time limit is 6 years since you last wrote to them or made a payment.

The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

Source:

That relates to statue of limitations, not credit file reporting

Iansellers

JCS1 said:

silvercar said:

Iansellers said:

enthusiasticsaver said:

I can see why you are overwhelmed but taking the nuclear action of handing the keys back, going bankrupt, giving up your job and moving in with family is one option but not the only one.  You say that approaching your current lender is not an option presumably due to the length of the lease? They may be flexible on this given your interest only mortgage is already with them and these days repossession is very much a last resort.

As your other debt is manageable  I would not rush to hand keys back and jump straight to handing back keys. Why would you need to give your job up? To avoid an attachment of earnings?  What will you live off given you will be resigning so unlikely to get much in the way of benefits or is your family offering to support you with living expenses as well as housing you? 

Staying put is another option and making an agreement with your current lender may be the less stressful in the end for you.  How much is the mortgage and what is the value of the flat as it stands with the short lease?  

None of this will be quick so it may well be a lot longer than 6 years and bankruptcy has all sorts of other implications not just on credit applications but renting applications should you decide living with family doesn't work and on future jobs. Also as sourcrates says you should hold off on bankruptcy until the property is actually repossessed or surrendered and the presumed negative equity is a reality. The charging order comes after the mortgage in priority. The negative equity and any other unsecured debt comes last. 

 I am not saying you should not do it but it is something you should carefully consider.  

Thanks for your replay, I really appreciate the ideas and exactly the reason why I'm pleased to have found this website.

When you say it could be a lot longer than 6 years, what do you mean by this? I was under the impression if I went bankrupt, all debt outstanding would be dated the day of my bankruptcy date and then drop off my credit file on the 6th anniversary of the date of my bankruptcy date? Could the bankruptcy and all the bad debt be showing for many years after the 6th anniversary of bankruptcy date?

I understand the possible implications on potential future jobs and renting places, it's not good but something I'll have to accept. I do have a very supportive family that I can rely on to live with indefinitely.

The flat is effectively worth very little at the moment as only cash buyers will buy it and they want everything for a bargain, figures I've been offered as a ball park figure isn't a figure I can work with to clear both my charging order and mortgage.

According to citizens advice it would be 12 years for the debt on the property as that is secured: 

For most debts, the time limit is 6 years since you last wrote to them or made a payment.

The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

Source:

That relates to statue of limitations, not credit file reporting

Thanks, I wasn't sure.

Sonic101

Hi there 

First things first, if you are sure you want to go for voluntary repossession make sure you have secured somewhere else to live first, as renting with adverse credit can be very difficult. 

Also bear in mind that until the property is repossessed and sold you will be still be liable for the council tax and utilities (you can get council tax  exception but only for limited time).

If you do go the voluntary surrender route, whatever you do do not sign a ‘deed of acknowledgment’ as this would make you liable for any mortgage shortfall even if you go bankrupt - there is some very useful information on this (and debt in general) on the Debt Camel website - https://debtcamel.co.uk/repossession-deed-of-acknowledgement/

I was in a position of being stuck with unsellable property, handed the keys back and was very lucky in that the lender was very helpful, repossessed the property immediately and to my immense surprise, manage to sell it and make enough to clear the mortgage and other costs (although not enough to clear my other debts).  So I was very lucky, BUT as others have pointed out, this is not always the case; repossession can be a slow and painful process and my example probably shouldn’t be taken as typical.

Last but not least, I wouldn’t do anything before speaking to a reputable organisation such as National Debtline, StepChange or the CAB (details of all of them are in Sourcrates’ signature, see posts above). You could also try speaking to your mortgage lender to ask (hypothetically) what would happen if you were to voluntarily surrender the property.

Good luck!