A buy to let being repossessed with a negative equity

hobbyguy · 2 February at 5:19PM

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

MattMattMattUK · 2 February at 5:23PM

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

Yes, they can, and will.

FrugaiMacDugal · 2 February at 5:35PM

How will you finance your 40%?

hobbyguy · 2 February at 5:36PM

Cash from sale of my residential house

hobbyguy · 2 February at 5:38PM

MattMattMattUK said:

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

Yes, they can, and will.

How could they take from something I only have 40% ownership of? Surely they can’t force me to sell my 40% to pay it back?

silvercar · 2 February at 6:12PM

Depends how quickly they work, but the real risk is that they put a charge on the home you are currently selling, so get their money from that before you buy in to your partners home.

They can put a charge on a jointly owned property. Not sure if they could force a sale. If it did go to court and they could show that you used money from the sale of your residential home to buy into another property rather than clear the debts you had on the BtL property, I don’t know what a judge would rule, but it doesn’t look very good.

Normally BTL mortgages are restricted to 70% of the property value, so what has happened that there are mortgage payments owed and negative equity?

MattMattMattUK · 2 February at 6:15PM

hobbyguy said:

MattMattMattUK said:

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

Yes, they can, and will.

MattMattMattUK said:

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

Yes, they can, and will.

How could they take from something I only have 40% ownership of? Surely they can’t force me to sell my 40% to pay it back?

They would place a charging order against the property, they could force a sale through the court if they wanted, though they may be satisfied with a charging order which means that you would need to repay them to be able sell the property.

They may also seek a charging order against your current home before you have sold it if there is a shortfall on the BTL property before you sell yours. The timescale for that is probably two months from when they start the process.

Hoenir · 2 February at 6:25PM

hobbyguy said:

MattMattMattUK said:

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

Yes, they can, and will.

MattMattMattUK said:

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

Yes, they can, and will.

How could they take from something I only have 40% ownership of? Surely they can’t force me to sell my 40% to pay it back?

Yes they can. The Insolvency Acts give the Courts the power to enforce a reversal of transactions. This protects the interests of creditors from the actions of debtors who knowingly attempt to intentionally put assets of reach.

hobbyguy · 2 February at 6:33PM

Has anyone negotiated the final payment to be a lot less? Like a final payment of less than half and it’s paid? I would appreciate any advice on this situation. Thank you

Flugelhorn · 2 February at 6:37PM

hobbyguy said:

Has anyone negotiated the final payment to be a lot less? Like a final payment of less than half and it’s paid? I would appreciate any advice on this situation. Thank you

but you will have the money when you sell the property? why are trying to pay less? - they are unlikely to settle for less if they know you have the money

Hoenir · 2 February at 6:37PM

hobbyguy said:

Has anyone negotiated the final payment to be a lot less? Like a final payment of less than half and it’s paid? I would appreciate any advice on this situation. Thank you

Nothing to stop you asking though. I wouldn't be too hopefull though. As you've the money to repay the debt in full. BTL is a business not a consumer debt. Presumably you pocketed some of the rent even though the mortgage wasn't paid.

A buy to let being repossessed with a negative equity

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