I hope that you'll be able to shed some wisdom over my tricky situation.
First of all, I'm not behind with any payments.
I still earn enough to cover my mortgage, bills and other payments.
What am I doing here then? Read on...
I own a flat that is currently worth about 180K and my mortgage on it is just about 150K - call it a good 85% LTV. I also have some Credit Card debt - about 20K, but no loans or store cards. I have savings in few ISAs - which are currently worth about 17K.
Life is nice you say... maybe, but:
The local council did complete major repair works on the block back in 2007 and finally presented us with the bill - about 45K per flat (leaseholder).
Needless to say, we are putting together a legal challenge against the charge, as the amount is absolutely extortionate. I'm sure it could have been done cheaper, but when the works were tendered for and completed between 2003 and 2007, the builders were having a field day with the costs of the works and charged whatever they wished. And the council paid and paid and paid... and now they ask for the money from us. Such is life.
We are hinted that the challenge could produce some savings, but typically these might well be between 5-10% at the most. And it will costs thousands in fees to surveyors and solicitors... so not worth it.
The charge that the council levies is per flat, so it stays with whoever the current owner of the flat is.
If I try selling the flat, the buyer will insist that I cover all of the charge (45K). Same if I put it on auction, and in any case I'm not trying to scam anyone out of their money.
I can only put together some 17K (cash in my ISAs) and perhaps get a loan for another 15K. I will still be about 13K short of the target and no, I cannot borrow more money on the flat, given that my LTV ratio is so high.
If I state to the council that I cannot pay the charge, they will probably sue me and make me sell the flat and pay [part of the charge] that way... And then if I fail to pay the difference between whatever the flat sells for and the 45K - they could sue me again and maybe make me bankrupt.
One way or another, my life will be shattered.
What I'm trying to do is figure how can I stop being the current owner of the flat, without going bankrupt or IVA-ed or whatever.
All I want is to keep my ISAs, keep my credit card debt - which I will continue paying - and somehow dispose of the flat.
Can I 'return' the flat to the bank and let them deal with it any way they want? Without this affecting my ISAs or debt? I'm really relying on the ISAs to bring me some income in my old age, as all the pension plans have proved such a rip-off!
Is there another option?
Thank you very much in advance