Court order

[Stressed150]

Hi guys just need some advice really, basically brought a property some years ago, and as property prices went down and credit crunch kicked in, I had to move back in with my parents oweing to no income, couldn't sell the property as the sale would not have covered the outstanding mortgage and would have left a shortfall, therefore, having no other option I eventually rented the property out, however, as the property was vacant for quite a while there are quite alot of arrears outstanding from last year but payments have been made this year as you can guess, the mortgage is not a buy to let. Basically my mortgage lender is taking me to court, not for reposession but to get a court order to say they will reposess unless I maintain my proposed payments. They are willing to capitalise the arrears after a set amount of monthly payments. I have made all payments this year apart from around 2 months again due to property being vacant. I need some advice on whether I need to come clean and just advise the lender that the property is now rented out as it seems to me that they will find this out anyway, Im worried that Im about to land in some deep Cr4p!!!! I know what I did was wrong however, I feel like I had no other choice, I am in debt already, and this property will eventually be my get out of debt card.

[Stressed150]

bumping

[Stressed150]

Someone... please.

[car2403]

Sorry, I can't help, but I'll see if I can get some for you.

[Ell-enn]

H there, sorry for delay.

 

You are certainly in the horns of a dilemma - on the one hand you have made an effort to service your mortgage payments by letting the property. However you would almost certainly need permission from the lender to put a tenant in the property.

 

The choices are - you tell the lender and hope you can get their agreement to let the property, or - you enter your defence (I'm assuming you have an N11M defence form from the court?) stating you are able to make the payments going forward + an amount each month towards the arrears, without mentioning that it is rented. The choice has to be yours.

 

In any event you need to send your defence in to court before the hearing and we can help you with that - what date is the hearing?

 

Ell

[Stressed150]

Thank you so much for gettin back to me, I really really appreciate it....I have not at this stage recieved any documents from the lender or a hearing date as of yet apart from a 15 day notice to clear the arrears, or legal action will begin. I have however, spoken to them and they have advised me that if i cannot clear the arrears within the 15 days, then their solicitors will be in touch with me and that I will need to put a proposal of payment forward to them so that they can present this to court. After this I need to make six consecutive payments, after which they will consider capitalising the arrears.

 

Thank you so much for getting back once again Ell-enn, I feel relieved already. If I was to file a defense will the solicitors/courts not ask for evidence of income/expenditure etc? I'm sure I will be able to maintain the next 6 monthly payments with a little ontop to cover the arrears, so if I put a proposal of this in the defense, will that stop further action?

[Stressed150]

Today recieved my letter from the solicitors of the bank, I want to make a proposal of payments however, they have attached an income and expenditure sheet and Im not sure quite how to complete it given my situation as mentioned in the post above. Any advice would be greatly appreciated.

[chillinlong]

Personally I would not tell them its rented. Why cause more problems for yourself...

 

It all depends on your mortgage? Has it gone low because of the interest rate?

 

There are different angles you can use with different lenders. Please give some figures and then we ca work out how to go forward.

 

All they want to see is regular payments as long as it covers the mortgage, and then a little extra towards the arrears and then after 6 months some of the lenders will allow you to add the arrears onto the loan and start from scratch, then you can wait until the market gets better before you sell but again depends on figures and lender involved.

 

Most of the time if you tell the judge you are proposing to pay a little towards arrears and the mortgage every month they will give a suspended order as long as you continue. Its all about running your negotiations with them and start off minimally and see what they accept. It is worthwhile sometimes to inform the opposing solicitor beforehand s they tell the judge for you that you have a payment plan ready aswell...

 

Good Luck!

[Ell-enn]

Hi, read your original mortgage contract to see if it specifically mentions anything about renting the property out before you do anything else. If it doesn't say you can't - then you would assume you can

[Stressed150]

Thank you guys for the advice. It does say that I can't do this without the lenders permission. arrears are just under £9000. I have been advised that I can make a proposal which will need to cover the monthly repayment and then a little ontop and provided I don't break this arrangement they will capitalise the arrears. How would I g about filling the income and expenditure? Especially as they have stated that they could possible ask for evidence of the income and expenditure at a later date.

[Ell-enn]

Are you in employment? if so, will your income cover the mortgage and bills? (on paper)

[Stressed150]

Nope I'm a student now. And I am on benefits but obviously not from the property concerned but from my parents home address. I feel like Im in such a mess!!!

[chillinlong]

I am not implying to do anything illegal or of such but you could perhaps do a little expenditure that will fit the amount to pay the mortgage and small arrears. I cannot see them asking for proof, if this does happen then leave a few days and change strategy, ie say you lost your job and revise it. You can get away with not filling it in, they just want to see the regular payments coming in. If it is right at the last minute and they demand this then I would fill it in.

 

Be warned this way it could backfire, I have gone through this a few times but although they were all BTL they have only ever asked for proof of tenancies so its a different scenarios to yours... Sometimes a little white lie just to keep things simple but only do this if you have confidence you will be able to keep up with the payment plan...

 

Please really think about which angle you go down but dont get stressed as it will cloud your judgement, just take your time and be confident whcih route you will try...

 

Good luck!

[pedross]

It may be you have a capital repyment mortgage and one option would be to change it to interest only. The mortgage would not be reducing but you would be able to offer more off the arrears in theory so it would look better for you with regards to your offer.

 

Pedross

[Stressed150]

chillinlong thank you so much for ur advice, can i not just say that I am a student, and that I am getting help with costs and mortgage from father, which was actually true for a few months.

[gustavius rex]

This is my advice and it's based on experience:

Do not let the property out, but, stay in it yourself and then take in lodgers. Make sure your official address is the property you own. Be grateful that you are dealing with a good lender and give him a realistic proposal including your income and expenditure sheet. The income from the lodgers should meet the income from alledged tenants, why, it should be enough to cover mortgage plus whatever you can on top. Ensure you maitain these payments for the period your lender reqires and then agree to re-capitilise. They are giving you a ''get out of jail card'' and not many mortgagoors are that lucky. lf you do not mess this one up, you should be alright and the whole dingaling sorted within a few years.

Best of luck.

GR

[Stressed150]

Gustavius thank you so much for that info, so I will fill out the income and expenditure to say they are lodgers and then work out the gas/electric etc... they do pay me the majority of the amount that would go towards the mortgage, I would have to pay around 150, however, then the bills council tax etc would be paid by me right?

[gustavius rex]

Gustavius thank you so much for that info, so I will fill out the income and expenditure to say they are lodgers and then work out the gas/electric etc... they do pay me the majority of the amount that would go towards the mortgage, I would have to pay around 150, however, then the bills council tax etc would be paid by me right?

 

lt depends how you set it up. Normally you would charge, say £85 per room including bills or £120 to £130 for a double room including bills. You could also lower the rent and charge portions of the bills to the rooms on a weekl/monthly basis. Best, though, is a clean £120 per week for each of the one or two double bedrooms you have available, including bills.

GR

[chillinlong]

Just say whatever you are comfortable with but as long as it shows them some sort of commitment and willingness that you can continue with the payment plan.

 

Good luck and dont stress...

[Stressed150]

HELP!!!! An update on this situation, I have made a proposal of payment to solicitors and they are happy with t, however, I thought that was the end of my bit, untill I discovered the defence form for court which I have just tried to submit online as its due tomoro, however, it's not letting me do it!!!! Why me???!!!! Can sopmeone please tell me what I need to do or can do? I basically have o defence will they reposess my flat?

[chillinlong]

Well if you are going to court and they are trying to repossess. If I understand correctly this is your first court case and you are going?

 

If yes, then arrive earlier and ask usher or clerk to let you know other solicitor arrives before you go in. When you meet solicitor tell them you want a suspended order subject to you keeping to the payment plan already agreed, see if you can get them to agree. They normally agree if it is a reasonable payment plan, then they will explain to the judge that they recommend suspended order as long as payment are made. If they dont agree then explain to judge you are looking to continue with payment plan and you want a suspended order, they normally give you a fair chance to show them you are making an effort.

 

Thats all you need to do, the judge normally takes the time to explain it quickly to you.

 

I hope this helps.

[debtdebtdebt]

Streesed 150,

Did you know you can submit forms to the Court via Fax - it is acceptable.

Call the Court and get their Fax number would do not harm to advise on the situation (short on time).

 

No expert but this is what I did (I was runnig low on time)...it was fine.

All the best DDD

[Stressed150]

Hi guys it's been a while since I updated this, but really wanted to say thank you very much to everyone who helped me out with this, I'm happy to say that I am back on my feet with he flat and have mantained my monthly payments inline with my arrangement via the court. Therefore, my lender has since capitalised the arrears and I still have my flat. Finally feel like I'm getting above board...!

[chillinlong]

Well done stressed 150. Now they have capitalised, it would be good to see if you can get the suspended order removed to protect yourself for future. Maybe one of the other posters should be able to confirm on here.