My House May Be Repossessed Soon

mightymouse

Hi

Does the six year rule not apply to any action contemplated by the borrower?

petermb_2

Yes the six year rule applies but only when you have discovered the issue exists. In other words, no time limit in theory.

HelpWhereIcan

CAB are correct that you should favour your mortgage over the unsecured commitments. That does not mean however that you should ignore them completely.

For the unsecured debts, have you investigated coming to an arrangement with them through Consumer Credit Counselling Service or Payplan?

If things are very serious, it may even pay to consider an IVA.

That way, you may be able to save enough money each month to make the mortgage affordable enough for you to catch up on the arrears.

Most lenders are unlikley to start proceedings over 2 months arrears, but it is important that you do all you can to make them aware of your situation and to come to arrangement about repaying the arrears. http://www.moneymadeclear.fsa.gov.uk/pdfs/mortgage_cantpay.pdf

They may allow you to have a period of interest only payments in order to make things more affordable while you get back on your feet or sell the house. Much better that the house is affordable or sold in your timeframe than repo'd.

Let's try and be constructive here people. Just saying "sell and rent" is looking at one possible solution without suggesting how it might be achieved.

Oh, but then again I would say that ... I'm a vested interest keen on talking up the market.

Remy_LeBeau

Hi,

Thanks for all the advice, I'll pass it on tomorrow when my Dad's around .

I've had a few ideas: my household all have dual-citizenship with Canada, would it be possible to sell the house, pay back the mortgage in full, and emigrate, leaving the credit card debts behind? I know this is not ethical, but I'm asking what the repercussions would be; would they have legal power to enforce repayment if I lived in Canada?

Another option; could we sell the house, renegotiate affordable payments on the Credit Cards, put the £190k towards a smaller property (the house is estimated at £470k, the mortgage debt is £280k) and then when we're in a position where I'm unable to repay the Credit Cards, have the amounts reduced?

Obviously, neither of these would leave a clean slate.

Any other ideas? (aside the first one that occurred to us; sell the house, pay everyone back, rent until the housing market recovers, and then live off what I have).

Remy_LeBeau

Had another thought. Legally, if a member of the immediate family was to purchase the house for well under market value; the value of the mortgage for instance, leaving my Dad with no assets and no mortgage debt, would he be able to declare bankruptcy/IVA and write off the credit card debt? We could then continue to live there.

poppy10_2

Remy_LeBeau wrote: »

Legally, if a member of the immediate family was to purchase the house for well under market value; the value of the mortgage for instance, leaving my Dad with no assets and no mortgage debt, would he be able to declare bankruptcy/IVA and write off the credit card debt?

No. He'd still be liable as it would be seen as gifting the money away to the family member.

Otherwise, everyone with debts could just give all their assets away into their wife's name and then undergo bankruptcy to get rid of the debts while keeping their assets.

Jennifer_Jane

What I would do is to lengthen the term of the mortgage and if it is not interest-only, make it interest only. Then pay off any debts that are not on 0% interest, and get everyone in the family contributing to sort out the problem.

Of course, the intention must be to repay the mortgage as soon as other debt is cleared as over the lengthened time, the compound interest would be huge, but this might let your father gather his thoughts, work out a plan, and not sell the house as a panic move.

Just what I think I would do - and in fact what I did do when I returned to the UK. So 8 years ago I took out a mortgage interest-only for no fixed term or 40 years or something (I was 53 at the time), and little way of paying it back. Now I only have £19700 of the mortgage to go, because the monthly interest payments are so little, I can afford to spend more repaying the capital.

Good luck, it's a sad situation your family are in.
Jen
x

Remy_LeBeau

poppy10 wrote: »

No. He'd still be liable as it would be seen as gifting the money away to the family member.

Otherwise, everyone with debts could just give all their assets away into their wife's name and then undergo bankruptcy to get rid of the debts while keeping their assets.

This had already occurred to me; I didn't explain my thoughts fully before because I was browsing from my mobile phone on the bus. If we could get a valuation of 280k (the value of the mortgage) from a professionally accredited estate agent, and I purchased the house, as all the debts aside the mortgage are on credit cards - and therefore surely not secured against the house in any way (or is whether a debt is described as secured or not irrelevant?) then with that asset sold, deeds transferred etc, what option aside bankruptcywould be left, aside reduced payments or an IVA. Would the CCCS be able to explain why this wouldn't work? - one of my friends is an Estate Agent, would he risk being charged with professional misconduct/ovent to defraud or the like? Who could bring this charge (only a party to the sale, or the creditors?). I'm trying to find fault, help me out cheers

silvercar

Any major transactions, particularly to family members could be investigated. In bankruptcy, the Official Receiver would look back over 5 years to check there has been no deprivation of assets (ie money that should have gone to creditors).

As to the morals of the estate agent and his risk of getting court, charged and imprisoned.......

poppy10_2

Remy_LeBeau wrote: »

If we could get a valuation of 280k (the value of the mortgage) from a professionally accredited estate agent

You say in your first post that the house is worth £550k. How could you get a professionally accredited estate agent to say it is worth only £280k? That would be fraud. Your dad would be seen as intentionally depriving himself of assets to the tune of £170k and you could be chased for that amount.