UK mortgage shortfall

[hannahhelp]

hi are any of u still around can u tell me what u did, me and my boyfriend are in a flat with 40000 negative equity we now have 2 children and see no way out, considering moving to australia, have lived and worked there before in our youth and have 2 possible employee visas. But the flat? we cant rent it out as would leave a monthly shortfall of £400. no other debts just blasted home what did u guys do? would b e grateful to know x

[hannahhelp]

hi i am facing a similar problem to you. sorry to butt in on ur thread, bt would love some info our home is in £40000 negative equity, and a 1 bedroom apartment, rent each month would leave us £400 to add, been offered jobs in Oz and considering going with the kids, but what to do with the house can we leave it??? can we be chased??

[cerberusalert]

I've copied one of your posts and created a new thread for you so that you don't get lost in other peoples.

[cerberusalert]

Is the mortgage in joint names and are there any other debts such as credit cards, loans, overdrafts etc?

[hannahhelp]

the mortgage is in both our names no other debt, have always been good payers. I hate the thought of just leaving but we dont know what to do, love austailia hate four of us living in one bedroom feels like we're trapped here now ;-(

[hannahhelp]

sorry for moaning but any advice gratefully accepted, has anyone left there debt/mortgage? would i hand keys back or await repossession? northern rock are not helping

me atall and have only suggested perhaps a payment holiday for 5 months which i dont need have not told them of my plans to relocate x

[cerberusalert]

For that amount of shortfall + the other costs which they'll add it is highly likely that they'll try & pursue. Have you looked into bankruptcy before you emigrate then at least you will be able to start with a clean slate.

 

I'm not saying that it is the only option and hopefully others will be able to add some input.

[hannahhelp]

how would we go bankrupt when can afford the bills at mo? or can we even? a clean slate would be good tho have just rang and suggested us putting on market for £80k but they said no as owe so much more

[cerberusalert]

IIRC you can apply for bankruptcy in the UK up to 3 years after you leave, so there would be nothing stopping you doing so at a later date if you manage to save enough to do so... which would be around £1500 for both of you.

 

With the mortgage being joint you would be both jointly and severally liable for any shortfall if they managed to trace you. You are under no legal obligation to inform creditors of your whereabouts but they would be likely to use tracing agents to try and find you. This would probably mean that they will contact neighbours and relatives trying to find information.

[hannahhelp]

So ur advising me to just leave??? and consider applying for bankrupcy from australia? totally new to all this sorry if appear dense need some considerate advice as we clueless have just paid mortgage monthly and hoped for the best. what has happened from your experience on these sites to anyone who has done this??

[hannahhelp]

Iirc?

[hannahhelp]

if i remember correctly thanks x

[cerberusalert]

So ur advising me to just leave??? and consider applying for bankrupcy from australia? totally new to all this sorry if appear dense need some considerate advice as we clueless have just paid mortgage monthly and hoped for the best. what has happened from your experience on these sites to anyone who has done this??

 

Obviously I cannot advise you to avoid paying any debt but what I can do is tell you what options you have. Basically if you decide to go bankrupt but you can't afford it you will need some breathing space to be able to save to do so. I also said that you were under no legal obligation to inform anyone of your whereabouts.

 

You would need to look into the implications of bankruptcy in Oz, whether it would affect any immigration application etc or whether it would be better to do it after you have settled. Also bankruptcy can have certain implications on certain jobs, i.e if you work in the finance industry etc.

[hannahhelp]

thanks we are both nurses so no implications, strangley looking better to just leave (altho aware very irrresponsible i know ) have you heard from anyone who has done this? bet im the unlucky bugger who gets caught x

[cerberusalert]

There's one or two who have just handed the keys in the day they left.

 

It's a catch 22 situation, people are lumbered with property which has a massive shortfall due to the recession with no outlook of the situation improving, if anything property is likely to depreciate even more... but that's a worldwide phenomena thanks to sub-prime lending.

[cerberusalert]

bet im the unlucky bugger who gets caught

There's nothing they can do, debt is a civil matter not a criminal one. 99.9% of the time people just need a breathing space to get their lives back on track but some financial leeches won't let them. The worse they could possibly do is apply to make you bankrupt which would cost you nothing in the long run. they are unlikely to do that as it will cost them & it would be throwing good money after bad as you have no remaining assets so nothing can be taken from you.

[Michael at BFA]

Hi Hannah-not too sure if anyone has given you some advice on this subject so thought I would post a reply. Don't let the flat stand in your way of moving overseas-you do have some options.

Unfortunately you are in negative equity so at some point you are going to owe some money if you get rid of the property and move to Australia.

One option is to hand the property back to the mortgage company. If you take this action the mortgage company will sell the property for the best price possible but there will be a shortfall and you will owe some money. At this point you need to consider your options based on the current circumstances you find yourself in.

You may be able to enter into a repayment agreement with regards to the shortfall or maybe even a full and final settlement if you have a lump sum of money.

If not, you can consider declaring bankruptcy from Australia in the UK. This will clear the debt and not affect your credit in Australia. As long as you do not have any assets or disposable income the bankruptcy from abroad will have hardly any affect on you. Please note that if you are in the UK (or return to the UK) you will feel the impact of the bankruptcy on your credit record-it is shown for 6 years from the start date and does make things hard with regards to obtaining credit, rental property and even things like a mobile phone contract.

Hope this helps!

[cerberusalert]

Hi Hannah-not too sure if anyone has given you some advice on this subject so thought I would post a reply. Don't let the flat stand in your way of moving overseas-you do have some options.

Unfortunately you are in negative equity so at some point you are going to owe some money if you get rid of the property and move to Australia.

One option is to hand the property back to the mortgage company. If you take this action the mortgage company will sell the property for the best price possible but there will be a shortfall and you will owe some money. At this point you need to consider your options based on the current circumstances you find yourself in.

You may be able to enter into a repayment agreement with regards to the shortfall or maybe even a full and final settlement if you have a lump sum of money.

If not, you can consider declaring bankruptcy from Australia in the UK. This will clear the debt and not affect your credit in Australia. As long as you do not have any assets or disposable income the bankruptcy from abroad will have hardly any affect on you. Please note that if you are in the UK (or return to the UK) you will feel the impact of the bankruptcy on your credit record-it is shown for 6 years from the start date and does make things hard with regards to obtaining credit, rental property and even things like a mobile phone contract.

Hope this helps!

 

Post moved into hannahhelp's thread.

[unclebulgaria67]

In your first post you mentioned not being able to rent out the flat as it would leave a £400 per month shortfall. Have you written to Northern Rock to register any complaint about your current situation. Although it is not NR's fault that the flat is in negative equity, perhaps they should be doing more to help, other than offer you a 5 month payment holiday. Are they willing to look at the mortgage rate that you are paying, reduce to interest only mortgage if you are not on that and also consider option for you to rent out the flat ? Apparently getting NR to agree consent to let, when you don't have much equity, can be difficult.

 

I am just thinking that it would not hurt you, if you had a letter on NR's file, advising them of your situation. At a later date, this might help you. You don't have to mention about moving to Australia and looking to hand back the keys, just that you are not happy with the current situation and are looking for options of a better life for your family.