What do I do?

kgreen84

Hello,

Don't know what to do really, and am feeling really stuck. We've been muddling along for about 18mths now but the situation is getting worse to the point that my marriage is on the brink.

We have 114k in secured debts but the area that we live it has taken a dive (to the point we are now in a regeneration area), the house has severe damp and its literally breaking up my marriage.

We have got to get out of this house but in todays market its only worth 75k-80k max, leaving around 40k shortfall. My husband went self employed but is currently not bringing home enough cash to cover everything and I work pt as I've got a 3yo little one with another on the way.

I also have 11k of unsecured debts that i am struggling to pay also.

Even if i did sell my house it wouldn't cover the mortgate nor the 17k second charge. I've worked out that we have currently about £150 more going out then coming in, thats without car insurance for 2 cars which we will have to pay monthly from July, any clothing, car maintenance, house maintenance allowence or life/income protection. We've talked and talked about it and want the house or at least the £860 we pay for it off our backs even if it means going into rented accommodation.


Do we miss some payments to save for a deposit on rented (there is no way we would save it otherwise), move out then give the keys back. I am presuming the mortgage people would come after us for the balance even though they would be aware that they don't have a cat in hells chance of getting anything. Just wishful thinking that they wouldn't I suppose especially with it being Northern Rock!!

The 2nd charge has the following in the T&Cs (welcome finance)

[FONT=Verdana, Arial, Helvetica]Posted - 01 June 2008 : 19:47:07[/FONT] [URL="javascript:openWindow('pop_mail.asp?id=670')"][/URL] [URL="javascript:openWindow('pop_delete.asp?mode=Reply&REPLY_ID=3515&TOPIC_ID=1122&FORUM_ID=11')"][/URL] [FONT=Verdana, Arial, Helvetica]Hi All,

Thanks for the replies I know deep down that BR is the only option but it almosts seems a faliure to everybody that knows and loves me, but the current person I am is of no benefit to them either.

Do I basically not pay my mortgage and other debts (I would need to do this in order to get a deposit and BR fees saved), move elsewhere and then hand the keys back?

When Northern Rock come to sell the property there is no way the sale would cover the mortgage so do we wait and see if they make us bankrupt or get in there 1st?

The 2nd charge we have with Welcome would therefore not be touched by the sale but having just read their T&C's I'm hoping they won't come after us. Basically I've found this in clause 3:

'The Mortgage Indemnity Fee shall be charged to you by being included in the Total Advance. In return of payment of this fee, we agree that, in the event that is necessary for us to enforce the Security, and the value of the Secured Property upon sale is insufficient to cover all sums then due by you to us under this agreement, we shall not pursue you for such shortfall'
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Would that apply to us giving the keys back to our mortgage provider and them just getting nothing or would they still seek to get something from us?

I'm not sure if speaking to either of them regarding their position on it would help or would it just pre-warn them of any moves we may take?

Many thanks in advance

dalip

Hi and welcome
You need to get some legal advice from a free debt helpline like those below. I am afraid i can not help on houses as never owned one thank goodness. Someone with plenty of advice will be along soon. Goodluck.D

Dez-Titute

Hi KG,
Have you contacted one of the debt charities yet if not this must be your first port of call.

Dez-Titute

Hi KG,
Have you contacted one of the debt charities yet if not this must be your first port of call.
Contact one or all of the following National Debtline - Tel: 0808 808 4000 | The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111 | local Citizens Advice Bureau.
Have you done your Statement of Affairs (income & expenditure) yet, without payments to debts? If you put this up on here then the someone here will be able give further guidance.

zoe2008

:T Hi KG
Well done for taking the step.
I know how you feel about going BR as i felt the same. We are in neg equity with a child and one on the way too. We have decided for the sake of our marriage we are going BR and try to keep the house, but what will be will be.
We have been swimming in debt for around a year now and now the decision has been made we are a lot better ( even laughing sometimes ).
We are just paying our essensials so we can save for the fees.
Chin up, get some good advice and keep posting we are all in the same boat.
This forum is great when you come to filling out the forms you can ask anything and a helpfull bod will respond.
Good luck in your BR and remember we are not the first and we will not be the last.

dodecanese

Hi Kg
I very nearly went down this path- I have a property in negative equity. Can afford the mort/sec loan but did seriously consider handing in the keys. In the end, I didnt, but- from what I understand- if you hand the keys back, the principle lender (Northern Rock), will sell the property and pay off their mortgage. The second charge holder- ie Welcome Finance- will then get what ever is left.

If there is a shortfall- Welcome get nowt/whatever is left- and they will persue you for the shortfall. But- if you have already gone bankrupt/or then declare yourself bankrupt- the shortfall goes into the bankruptcy and is "written off" like your unsec debts are.

Dont worry about "clause 3"- if you are bankrupt- it can be included in the bankruptcy.

I was advised to stop paying mort/sec loan so as to pay 6 months rent upfront- some letting associations are not keen on renting to bankrupts- though I found some were not bothered as long as you pay the rent. Private landlords can be more lenient. I would advise to be ready to maybe pay extra upfront.

If you decide on bankruptcy- I would not tell the lender you are planning this- they will probably chase you harder while they can. Do not sign any paperwork if you do hand the keys back. Read Scarletts thread ( sorry, cant find link- bit rubbish at that sort of thing)- this gives you loads of info re giving up a house/going into rental/bankruptcy.
Also speak to the debt charities- CCCS, CAB and National Debtline for free, impartial advice.

kgreen84

I have spoken to one of the debt agencies that suggested BR. Mentioning to quit paying everything for a couple of months and then moving out to hand back the keys. I may give them another call tomorrow just to talk over a couple of other things

I have read all 14 pages of scarletts BR and found it very informative. We are in a hole whereby the house prices will never at least for a good period of time get anywhere near what we owe and with mortgage payments getting higher its a case of now or further down the line.

Is it best to miss a couple of payments in order to get deposits and BR fee saved or not pay and hang in for a bit longer? Really not sure on any of this!!

Thanks for all the advise so far

Merry_Gentry

kgreen84 wrote: »

Is it best to miss a couple of payments in order to get deposits and BR fee saved or not pay and hang in for a bit longer? Really not sure on any of this!!

Thanks for all the advise so far

Hiya, if you have already sought advice from one of the debt counsellors, and they recommend bankruptcy then once you make the decision to go BR stop making payments. Pay for your utlities and council tax, and put everything else into finding somewhere to rent and getting together your BR fees. Basically that's what H and I have done, and we are moving into rented accommodation a couple of days after our scheduled BR hearing. Yes, we have had lots of phone calls from our creditors, but to be honest once we told them that we are going BR they have just asked us to keep them informed and left us alone :eek: Not the reaction I was expecting, but a bit of a relief.

dalip

If you have been advised to go bc then you need to ring your local court and find out if they operate a drop in or appointment system for bc hearings. Also check with them how many copies of your SOA you need as again this varies from 1-3 depending on the court. Good luck with it all.D

kgreen84

sorry what is an soa?

2nd question i've got is. One of the unsecured debts is a 7k loan with lloyds tsb, this is also who our have our main bank account with. My worry here is if I cancel the dd and they still take the cash as it mentions in the T+C that they can take payments/fees from savings accounts I have with them.

Not sure if its worth moving to another bank even if its for a couple of months until I go bankrupt so that its a complete clean account if you get what I mean?

philnicandamy

SOA (statement of affairs) its a list of your cash coming in & what you spend each month listed have a look here
http://forums.moneysavingexpert.com/showthread.html?t=806277


be worth looking at one of the "basic" bank accounts they could take cash from your other account to pay the debt...its called off setting
http://forums.moneysavingexpert.com/showthread.html?t=474254