I am an Australian citizen who was previously employed in the UK, but lost my job when my coy recently went bust. I have returned to Australia but have a house in the UK which is now worth less than the mortgage. I have not yet missed a mortgage payment but have no money to make further payments. What happens if I just hand the keys to the mortgage broker? Will I need to go bankrupt? Will my partner (we are in the process of an amicable seaparation) be affected by any bankruptcy proceedings? thx - liam
You can hand the keys back ( voluntary reposession ) however the mortgage company will have up to 12 years to pursue you ( and your partner IF they are on the mortgage) for any shortfall after the house is sold.
Depending upon the shortfall you may want to look at how to address this shortfall by either :-
1. agreeing a repayment plan with the mortgage company (£X per month for Y years )
2. do nothing ( not recommended )
3. review insolvency possibilities
Again these options will really depend upon your income position and the shortfall after sale. In reality because of the housing position it may be significant.
Paul Johns Assisted Bankruptcy Specialists Reviva UK www.revivauk.com
If you handed back the keys you would effectively be allowing your property to be repossessed by the mortgage company and would go on the Possessions Register for 6 years. You would not, however, get a County Court Judgment. Depending on whether you have other debts you would want to be dealt with bankruptcy might be an option to consider. The whole thing would also depend on whether you might eventually return to the UK.
You can hand the keys back ( voluntary reposession ) however the mortgage company will have up to 12 years to pursue you ( and your partner IF they are on the mortgage) for any shortfall after the house is sold.
Depending upon the shortfall you may want to look at how to address this shortfall by either :-
1. agreeing a repayment plan with the mortgage company (£X per month for Y years )
2. do nothing ( not recommended )
3. review insolvency possibilities
Again these options will really depend upon your income position and the shortfall after sale. In reality because of the housing position it may be significant.
Paul Johns Assisted Bankruptcy Specialists Reviva UK www.revivauk.com
I have an offer on the house at this stage which would leave me with a shortfall of about £4K on the mortgage which I could raise. However, there is also a penalty for discharging the mortgage early which equates to £7K which is beyond me. I have had my solicitors contact the mortgage coy and they have refused to negotiate on this point to date. Obviously this also depends on the sale going through which is tenuous in the current market although there is no chain involved.
My partner was listed as a resident of the above property on the mortgage papers but the mortgage itself was not in her name - what are the implications of this?
My other concern is regarding assets that have been negotiated as part of the dissolution of my marriage. We had a property in Australia which was sold in June and the proceeds divided between us informally - some of the monies involved in the settlement have only recently been transferred to her name as they were in a term deposit account and we agreed that we should hold them there to have the benefit of the interest. My wife is concerned that she could be the target of any bankruptcy proceedings or that they might pursue money given to her as part of the settlement.
Any advice gratefully received. liam
quote:Originally posted by Reviva UK
Hi and welcome to the forum.
You can hand the keys back ( voluntary reposession ) however the mortgage company will have up to 12 years to pursue you ( and your partner IF they are on the mortgage) for any shortfall after the house is sold.
Depending upon the shortfall you may want to look at how to address this shortfall by either :-
1. agreeing a repayment plan with the mortgage company (£X per month for Y years )
2. do nothing ( not recommended )
3. review insolvency possibilities
Again these options will really depend upon your income position and the shortfall after sale. In reality because of the housing position it may be significant.
Paul Johns Assisted Bankruptcy Specialists Reviva UK www.revivauk.com
Hi ]given that you have an offer from someone then the mortgage company would be absolutely CRAZY not to accept.
This would leave you with a deficit but you could review the debt position at that point.
On a negatve note many lenders are taking hard positions regarding this type of situation only to be left with a huge loss should the house get reposessed and a Br occurs.
Paul Johns Assisted Bankruptcy Specialists Reviva UK
For a Free Impartial Review before taking the leap call me @ Reviva UK www.revivauk.com
What happens if I just hand the keys back?
Posted - 23 October 2008 : 08:46:03
