Goodbye UK - Hoping for better in Canada

[energysolutions]

Hi Guys,

 

Ive just stumbled across your forum and after a quick scan I decided it would be a good place to air some questions about my predicament

 

A little background - I got married in late 2006 and, like most couples, shortly after we purchased our first house (early 2007), the mortgage advisor sorted us with a mortgage and as the house was in need of some TLC he suggested that after a few months we could remortgage and use the additional funds to do the work. We began the fairly extensive work (roof space conversion and a full modernisation) using our own cash thinking that in a short space of time we could drum up the cash to finish it by remortgaging

 

Then the banking crisis hit. Our funds were pretty well exhausted and house prices have been sinking ever since with no sign of the tide turning so the house has sat static with us paying an interest only mortgage on it - we've never even spent a night in it - we cant sell as its in massive negative equity (probably worth a third of what we paid based on what other properties in the locality are selling for now) and we cant rent as its still essentially a building site

 

On the upside we have always managed to pay the mortgage (as well as everything else - just about) so our credit ratings are "excellent" (I checked at the weekend) but we cant keep doing this - I genuinely feel like its hurting my health (cant sleep for worry, cant concentrate for worry, dont eat a lot of the time, tight chest etc etc) and so we have decieded to emigrate, luckily my skill set is in demand and I was made an offer fairly quickly but that leaves the question of what to do with our property - to clarify - Ive lost a fortune between deposits, mortgage costs and building works but I simply want out - Ive had enough

 

The following solutions have been suggested to me:

 

Option 1 - Full bankruptcy before I leave - obviously our (good) credit ratings will be obliterated and I dont know how that will affect our planned move from the perspective of selling our vehicles to release some cash to start afresh in a new country - we have basically nothing of value apart from whatever cash the car (11 years old) and my work van (9 years old) generate, out of that I have to ship our belongings (approximately half of a 20ft container) to the other side of the world which will cost approximately £3500 and my wifes air ticket (around £500). Obviously once we get there I will have to pay rents, put down deposits etc so I need some cash to fund this

 

Option 2 - My accountant has suggested I allow him to hand back the keys - he has given me a statement basically outlining that he has had a look at my affairs and that in his opinion I cannot sustain paying for the property and that he advises handing it back to the mortgage company. He is adamant that he has successfully done this for several of his clients (one handed back eleven houses) and that was the end of it. I`m not convinced - from the limited research I have done it seems that while everything is quiet now there will be a day of reckoning after the bank sells the property, at that point they will tally up their losses and try to reclaim them from the former owners, OK, so I will have emigrated which makes it a little trickier but it seems that in that instance the mortgage company sells the debt to a debt recovery service in whichever locality you are then in

 

Option 3 - Keep on paying, hope that I make enough cash to keep up the payments or better still enough to finish the building works wherby it could then be rented out to help pay for itself, one suggestion Ive heard was that I should approach the mortgage company and try to work something out (i.e. they sacrifice something so I keep on paying, like writing off some of the debt) - if everything went well this may work but, honestly, Ive lost heart in it and would prefer to get rid

 

I cant stress how bitter I feel about it all - I feel like we did everything right and have paid everything on time and in full which has left us quite stretched on occasion, our only crime was buying our first house which turned out to be a HUGE mistake and one that we now cant seem to recover from - it honestly feels like its gonna hound us forever and its slowly killing me through stress & worry, I can honestly see how people can consider suicide over all this

 

Any comments/opinions welcome

 

Thanks in advance

[unclebulgaria67]

Focus on everything that helps you obtain the better life you are looking for in Canada. So don't wreck (default on credit repayments) your UK credit records until after you have left. This in on the basis that Canadian credit providers, letting companies or employers may ask to see your UK credit record. If you have been paying the mortgage for awhile, ask whether the mortgage company allow a short payment holiday. Even if it for a couple of months, it may help free up some money to help you make the move.

 

Don't hand over the keys or decide what you will do, until you are set up in Canada. If the UK house is going to be in negative equity for years to come, I would question whether continuing to pay the mortgage is worth it. It might be worth it, if you could get the house renovated over say 2 years and then sell it at least to cover any loans/fees. But if there is going to be negative equity, this won't be written off. At some point the mortgage company or debt collector will chase for the relevant amount. The house will be sold at auction for a reduced price and with all the various fees, any debt is likely to be substantial.

 

A UK company trying to enforce a debt in Canada is not going to find it easy. They should really serve UK court papers to your Canadian address (if you told them) and upon receiving a UK court judgement, they would then approach a Canadian court. Long winded and expensive, so may not bother beyond sending threatening letters. The danger of not telling creditors of a foreign address is that to a court it looks like you have run away, so trying to get a default CCJ set aside would not be that easy. Also they could go for bankruptcy in the UK in your absence. Once they found you in Canada, they might then try to enforce in the Canadian Courts. If UK creditors knew your Canadian address, there is no excuse for them not writing to you and sending any court claims, so you could deal with them at the appropriate time. Now in Canada it depends on which state you are living in, as to what the rules are for courts to accept UK debts being transfered to them. You would have search for information where you intending to move to.

[energysolutions]

Thanks unclebulgaria67 for the reply

 

Ive battled with the property for long enough, even if it was renovated tomorrow I doubt it would be worth half of what I paid in 2007 (so a £70K negative equity shortfall at best) so I feel like Ive lost enough and cant sustain this any longer

 

Ive since asked the mortgage advisor about the possibility of the bank writing off a percentage of the mortgage debt for a lump sum but he believes that the institution in question are the least likely to do that as they are the most tenacious of everyone that he deals with

 

Pretty sure that it wont impact me where I`m headed (Alberta) - everyone starts with zero credit rating so past conduct (good or bad) counts for nothing - the company that I will be working for actually have a preferred bank that they take their new foreign workers to open accounts

 

Does anyone know for sure if its possible to go bankrupt in Northern Ireland from Canada by using a "power of attorney" or similar? My company want me there on 14th of August and the courts here are in summer recess so I doubt I can get a date before then

 

Between various people being off on holiday and court recesses its been a total nightmare (just my luck) and I definitely dont want to mess my new employers around and lose my job over there

[unclebulgaria67]

Think you can apply for UK bankruptcy up to 3 years after leaving the UK. There is a specialist company if you seach for them 'bankruptcy from abroad'. Others who have posted on CAG have phoned them for general advice and they have been quite helpful.

[energysolutions]

Think you can apply for UK bankruptcy up to 3 years after leaving the UK. There is a specialist company if you seach for them 'bankruptcy from abroad'. Others who have posted on CAG have phoned them for general advice and they have been quite helpful.

 

They are VERY helpful - I spoke with Michael just this morning, problem is he doesnt cover Northern Ireland

[unclebulgaria67]

They are VERY helpful - I spoke with Michael just this morning, problem is he doesnt cover Northern Ireland

 

There are a few debt registered charities in NI who might have some info on this.

 

e.g http://www.debtaction-ni.net/

[energysolutions]

There are a few debt registered charities in NI who might have some info on this.

 

e.g http://www.debtaction-ni.net/

 

Cheers for the link, looks like theres a branch relatively close to me so I will try them tomorrow, thats if they arent on holiday too (like everyone else over here at the minute it seems)

[energysolutions]

Has anyone came into contact with a company called Debt Release Direct? I ask as I have contacted them regarding my options and I cant decide if they are a good bet or not

 

They seem helpful (but the cynic in me thinks thats to extract the fee) and, as I`m bricking myself with it all, I do feel like I need some guidance

 

When we first spoke they indicated that my best course of action was bankruptcy (which I think is correct as I will be rid of the property forever) and that they could handle it no problem, I explained that I would be off to Canada soon and even that was no problem it seemed (which was different to most of the advice I had already received which suggested that you need to be in the country to become bankrupt and also at least for a short time afterwards to deal with the official receiver unless you can give power of attorney to someone to handle it for you which I`m not sure will work/is even possible in my locality - Northern Ireland) - they could still handle that no problem

 

I spoke with them again today and their stance had changed a little, they now tell me that they cant/wont appear at the bankruptcy hearing for me, I have to do that myself, which is no problem (I feel that Ive done everything correct but the property crash and subsequent recession has wiped me out) except the courts in Northern Ireland are currently in summer recess and although there are a few dates they are generally reserved for bigger cases so there is no way I can appear in person before I leave due to that. There is a date on the 12th August but I guess that even if I could get that and am made bankrupt I couldnt leave on the 14th (when I`m supposed to leave) as I need to give the official receiver more time to investigate my affairs - is this accurate? I asked Debt Release Direct about this and they said it was no problem - once the bankruptcy order is made I can head off no problem, I asked about what actions the Official Receiver may take against me (IPO or IPAs) and explained that I have zero assets but look like I am getting a new job, they stated that once I had been through the bankruptcy and had made my position clear to the Official Receiver that would be the end of it - I would love this to be true but once again this is different to other advice I have received

 

They said they would look at the options and call me tomorrow with the best way to proceed but I feel that this company are simply gonna take a handful of cash to help me fill in some forms and if it doesnt work out like they promised I`ll be left high and dry with it to sort out

 

Opinions? Thanks in advance

[unclebulgaria67]

I think you have talked to people who may not be fully qualified to offer the advice they have. You should contact someone in Northern Ireland who deals with bankruptcy there. I would suggest that if bankrupty is the best option, that you use a local debt/insolvency practioner to help with this. The debt advice centre linked to in an earlier post may be able to assist or the debt registered charity StepChange can help as well.

 

http://www.stepchange.org/Debtadviceinnorthernireland.aspx

If you apply for bankruptcy before you leave the UK, I believe the process can take a few months and you would need to be available. Given that you plan to leave shortly, you may have to apply from abroad presumably using a slightly different process to reflect that you are not in the UK to attend a court here.

 

Remember to check whether a UK bankruptcy will affect you in Canada, before you apply for it.

[energysolutions]

I think you have talked to people who may not be fully qualified to offer the advice they have. You should contact someone in Northern Ireland who deals with bankruptcy there. I would suggest that if bankrupty is the best option, that you use a local debt/insolvency practioner to help with this. The debt advice centre linked to in an earlier post may be able to assist or the debt registered charity StepChange can help as well.

 

http://www.stepchange.org/Debtadviceinnorthernireland.aspx

If you apply for bankruptcy before you leave the UK, I believe the process can take a few months and you would need to be available. Given that you plan to leave shortly, you may have to apply from abroad presumably using a slightly different process to reflect that you are not in the UK to attend a court here.

 

Remember to check whether a UK bankruptcy will affect you in Canada, before you apply for it.

 

Yep, it very much wreaks of "Too good to be true" and the advisor I`m dealing with seems to be a nice enough guy but a large part of me suspects he either doesnt know the process or is simply telling me what I would like to hear, either way they could easily steer me into a mess which would then be my problem to sort out