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A buy to let being repossessed with a negative equity

hobbyguy
hobbyguy Posts: 17 Forumite
10 Posts Second Anniversary
in Mortgages & endowments
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
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Comments

  • MattMattMattUK
    MattMattMattUK Posts: 11,776 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 2 February at 4:23PM
    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
    FrugaiMacDugal Posts: 452 Forumite
    100 Posts Photogenic First Anniversary Name Dropper
    How will you finance your 40%?
  • hobbyguy
    hobbyguy Posts: 17 Forumite
    10 Posts Second Anniversary
    edited 2 February at 4:36PM
    Cash from sale of my residential house
  • hobbyguy
    hobbyguy Posts: 17 Forumite
    10 Posts Second Anniversary
    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?
  • silvercar
    silvercar Posts: 50,047 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    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?
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  • MattMattMattUK
    MattMattMattUK Posts: 11,776 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    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
    Hoenir Posts: 7,742 Forumite
    1,000 Posts First Anniversary Name Dropper
    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
    hobbyguy Posts: 17 Forumite
    10 Posts Second Anniversary
    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
    Flugelhorn Posts: 7,475 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    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
    Hoenir Posts: 7,742 Forumite
    1,000 Posts First Anniversary Name Dropper
    edited 2 February at 5:38PM
    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. 
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