I have a buy to let property which is a part of my debt problem. I have borrowed on it to keep myself above water, It has a terrible damp problem and I have spent £1000's trying to solve the problem with no joy. One winter and any tenant wants to move on at end of their lease. I have been paying over £250 PER month above what the mortgage is since Northern Rock put me on there standard variable in Dec. Also it was empty for six month last year, I was paying full mortgage with no income. It is also now in negative equity. I am renting at the moment so I have a roof over my head. It has now broke my back. I have other huge debts and my only option is BR. My Question is when do I hand the keys back to Northern Rock, before I make myself BR or after. I have no interest in keeping flat. Thanks DAVE
Hand they keys back before you go BR. In a reposession, the lender has to try and sell the property on the open market first. If it doesn't sell, then it goes to auction where it typically achieves "red book value" which is circa 75% of the market value. Any shortfall will become a new unsecured debt, and hence written off in BR.
Hi Julian, I'm a little confused here as we are in a mortgaged property with approx £15,000 equity but rapidly falling due to the current market. We are planning to go bankrupt the week before we move into a private rented property and have informed the Northern Rock of our intentions as we cannot afford the mortgage increase anyway. Do we hand the keys back to the northern rock once we have moved or do we hang onto them and let the Official receiver add the property into our bankruptcy order and will this cover any shortfall incurred if the property doesn'tmeet what we owe on the mortgage/arrears incurred to save money for the BR petition and the rent/deposit on the cheaper rented property?
If there is equity in the property you should most certainly not hand the keys back to Northern Rock until the Official Reciever is in office and can direct what he/she decides will happen.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com
Ensure you list your mortgage/secured loans in the unsecured section of your SOA with "?" in the amount and "shortfall" in the purpose column. By doing this, you will ensure that any shortfall from reposession/sale will be included and written off in your BR. However, it is always safest to try and deal with the property prior to BR.
I told my building society I wanted to hand the keys back and they said they won’t accept the keys, there is no such a thing and that I have to fill out a voluntary surrender form and return it to them and ensure the property is empty. My issue is that the property has a tenant that has to vacate property and will I cause myself any future problems by signing a voluntary surrender form or is it standard procedure when handing back keys. Also can I go BR the day after handing the keys back. Had enough of having to deal with the phone calls...Thanks Dave
The situation will not affect your tenant, assuming that he is in occupation under a short term assured tenancy, however any rent that is received after the date of surrender will have to be handed to the mortgage company.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com
In a nutshell david, yes you can, but as others have said it is safer to do it prior yo going BR. It will be ok though, just a little more explaining to the OR.
If there is a shortfall on your mortgage, then you need to include the full amount on the secured creditor section and bring forward the shortfall to the unsecured section.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com
Hi when you mean shortfall do you mean arrears. As i dont really understand what you mean by shortfall as at present we are a payment behind. Sorry for the dumb question. Please advise
Thanks for that no at the moment we are ok, the house is estimated at 165000 the mortgage 153000 so when it goes to BK we should still be in the secured part with no shortfall, that is until they sell and depends on what they get for it, but from what you said before any shortfall after that once the BK is in place we are not liable for its covered under the BK notice. Thats how i understand it from you. Cheers Melanie
Hi me again how on earth do you give the keys back to the mortgage co before bk as i would love to do that but how do we stand in bk then, how do we get on with getting accomodation then. I have 3 children and need to consider all things firstly. The car is going back and i would love to say to the C&G Take the house back but what do we do and what will the OR say or even the council and housing associations if we just go There you go have it we dont want it. Surely then we have intentionally made ourselves homeless Should i just wait and let the OR do all that and let the BK cover the rest of the debt on the house Cheers
Handing back the keys.
Posted - 30 June 2008 : 17:57:18
