Repossession

Alfiemoon75 · 17 January 2020 at 8:07PM

Hi my partner and I are about to have a buy to let property get repossessed. Just to give you the background
- the property was mine originally, when we bought our current house the market crashed in just before we moved in which meant that we were left holding my house so we decided to rent it out
- The mortgage on the rented property is buy to let, and ends in about 8 years
- we always had tenants and then covered the shortfall and the rates ourselves
- last tenant left last year and we tried to keep up payments but have not been able to. We are low earners so not much surplus cash
- We don't owe much money, about 2000 in on credit cards and that is it. We have about 25,000 equity in our own home (market still not great where we are)

So now this is happening, very stressed and worried about the whole situation and would just like some of your opinions on what will happen. I now there will be a shortfall if the repossession team manage to sell the property so what will happen after that. Will the bank make us sell our home? Well they accept a payment plan, will the debt continue to incur interest rate charges. I have an appointment with a debt specialist on the 30th but wanted to reach out..

fatbelly · 17 January 2020 at 8:22PM

So you are going to lose your buy-to-let property and believe it is in negative equity.

How much is the balance of the mortgage? How much are the arrears?

How much is the house worth at a market price?

What stage is the repossession at? Have you had your court hearing date?

The worst case here is that you are going to have a non-priority debt, similar to your credit card debt. But nothing's going to happen quickly.

Who is your debt specialist? Citizens Advice?

Here's a factsheet to be going on with.

https://www.nationaldebtline.org/EW/factsheets/Pages/mortgage-shortfalls/mortgage-debt.aspx

sourcrates · 17 January 2020 at 8:29PM

Shortfall debts are usually quite large, and creditors know not many people have that much cash sitting around doing nothing, hence why they are not chased as relentlessly as say someone who owes a couple of hundred quid on a defaulted payday loan.

Usually only a small portion of these types of debt get repaid, payment plans are readily agreed with creditors, make sure any advice you get is from a reputable not for profit organisation such as CAB or Stepchange.

Alfiemoon75 · 18 January 2020 at 4:55PM

The balance on the mortgage is 113000, market value is hard to judge originally to estate agent put it on the market at 118000 but after a few months we requested it drop to 111000. I imagine it might get 105000 for quick sale. We are 2500 in arrears

I have an appointment with citizens advice. My main worry is that they will force us to sell our family home for the little equity that is in it. I don’t mind some sort of payment plan but worry that the debt would then be incurring interest. As I said we are not high earners and we are heading to 50! I also have been diagnosed with a lung disease which makes the prospect of ever getting a mortgage again very low.

tallyhoh · 18 January 2020 at 5:17PM

Alfiemoon75 wrote: »

The balance on the mortgage is 113000, market value is hard to judge originally to estate agent put it on the market at 118000 but after a few months we requested it drop to 111000. I imagine it might get 105000 for quick sale. We are 2500 in arrears

I have an appointment with citizens advice. My main worry is that they will force us to sell our family home for the little equity that is in it. I don’t mind some sort of payment plan but worry that the debt would then be incurring interest. As I said we are not high earners and we are heading to 50! I also have been diagnosed with a lung disease which makes the prospect of ever getting a mortgage again very low.

Have you checked whether you are entitled to PIP for your health problems?

Alfiemoon75 · 18 January 2020 at 5:31PM

What is PIP.

fatbelly · 18 January 2020 at 6:28PM

Personal Independence Payments - the replacement for Disability Living Allowance

tallyhoh · 19 January 2020 at 12:03AM

https://www.gov.uk/pip

You may be entitled to help, please read the information on the link

Repossession

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