Questions and Info relating to Property Issues inc, Charging Orders and Repossession

Moderators: TalbotWoods, JaneClack

By Enoughisenough
#314253 Hi All,

I have been looking at the forums for a number of days and thought it was about time I joined up and started to contribute!

I live in the North West and need some advice/sense checking. Some of you may think that what I am going to ask is irresponsible and unethical, but please let me know what you would do in my situation....

I am in my early thirties, earning an 'ok' salary but i am by no means affluent. In 2006 I purchased a new build, tiny, three bed semi in Manchester. I was given a gifted deposit of 5% from the developer. Very stupidly took out a secured loan at a stupid interest rate and I stopped paying this over two years ago.

The secured loan company send the odd letter but are not harassing me or phoning.

My mortgage was initially interest only, but i switched to repayment about a year ago. I am in negative equity to the tune of circa £30,000

Do I sit tight, keep paying the mortgage in the hope that property prices pick up (don't think this is going to happen any time soon)

What about the secured loan? Even if prices do creep up the are going to want their money at some point! (I am investigating a number of issues with the agreement and the legal charge, but not sure what the outcome will be.). Am I just delaying the inevitable?

The most drastic option..... My partners credit file is not linked to mine. My partner has been provisionally accepted on a government rent to buy scheme, vastly below market rent for two years with no commitment to buy a house with what is saved. I know unethical.... But is handing the keys backs and not linking myself to the rented property an option? Effectivly I wold go off the radar.

My head is in a funny place with the stress of this, I just don't know what to do!

Advice please!
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By TalbotWoods
#314383 Hi Enoughisenough

OK first things first, what does you gut feeling tell you to do?

I ask this as if you walk away from a debt of what will be significantly in excess of £30K, they are going to chase it, big style, and they will go for it every way they can.

Have you though about how you will deal with it, are you in a job that pays enough that you can afford repayments for a long time, would you consider bankruptcy to clear it?

Also as you ave rightly pointed out, the housing market must pick up eventually, but are we really at the bottom yet?

What sort of rental income could you get for you property, if in fact you are allowed to rent it under the terms of your mortgage?

Whichever way you choose to turn with this there are advantages and disadvantages, some more drastic than others.

So it still comes down to the orignal question, from which we can suggest possible routes for you, what is your gut feeling?
By Enoughisenough
#314423 Thank you so much for your kind reply.

My gut feeling is basically of feeling overwhelmed with the negative equity and I know that in say six to ten years time I will have paid more off the mortgage, but it feels like a sinking ship.

The way I see it is that I am in such a negative, I will be ploughing more and more money into a property which may be worth even less for the foreseeable future.

One option I potentially thought of, and I know it's going to be frowned on and unethical, is for my partner to rent a property in sole name. I move in but don't register on electoral roll, thus no link between addresses.

I set up a mailing address service and redirect my old mail to it (again not linking new property) all my mail is received at this address.

Once house is sold the debt I owe the mortgage comany and the secured loa company will in effect be unsecured along with a few other unsecured debts. Could then look at an IVA or payment plan.

Does the above sound plausible?

I will approach my mortgage company and ask about consent to let, but I am not sure how they will view the secured loan and the negative equity? Theoretically. If they would let me rent out I could probably top up the rent by the £200 each month to repay the mortgage.

I just feel I need a simpler way of life, not constantly worried about the economy and housing market.
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By DuffNCustard
#314503 So in a nutshell you've got a property you want shot of and you want to vapourise the outstanding mortgages on it.

Rental incomes down here in the London area are rising and look set to keep doing so ad infinitum. Manchester not sure what the market is like - if rental incomes are like they are down here then renting out is something you should check out - a 3 bed semi down here would get around £700 a month. Might cover your mortgage? Long term (very) house prices will rise - all a matter of supply and demand - and the UK is not building enough property to house all its people. If the morgage prohibits you from letting (probably will) that could instigate a discussion about 'handing in the keys' - try to sell it and/or let them repossess it.

You'll find it hard to 'disappear' especially owing £30k should you actually sell the property, and you'd need to be 'disappeared' for 12 years before the balance owing became statute barred.

Bankruptcy? as you are paying the mortgages now then you sound solvent, however were you to sell the property then you probably wouldn't be. So an option would be to sell the house and then declare bankruptcy - but I'd strongly advise that you take advice.