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frosie90
Junior Member
285 Posts |
 Posted - 24 February 2009 : 21:00:35
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Hi, I have decided to file for BR. I have a house which is in negative equity so will include that in the BR. I am just getting bit lost in all the order of things. The CCCS has advised me that if I am going BR to maintain my mortgage payments until I have found somewhere to rent as after BR renting may be more difficult. I have stopped paying my numerous credit cards and loan but have written to them saying I am in consultation with the CCCS.
Some of the letting agencies I have approached as a "currently solvent person as they are unaware of my intentions" have said that I have to pay one month's rent in advance plus a sizeable deposit, 1.5 of rent in some cases. I havent ever missed any mortgage payments and this month is the first time that I have not paid anything against my credit cards and loans. I am just getting worried that I am going to have to, somehow, get the deposit and upfront payments for my rent plus the £500 I will have to pay for filing for BR, knowing that I should not stop paying mortgage yet until I have a property. One letting agency also said I have to pay £100 for applying to rent. A couple of the letting agencies have asked if I have a house to which I have replied yes but i am unsure of what to say regarding what I am doing with it?? Once I stop paying my mortgage I will have approx £200 extra a month once I start renting.
Basically what I am asking is for someone who has been in similar situation, i.e. huges debts, house in negative equity, not intending to want to stay in house (as it needs so much doing to it and mortgage fixed rate finishes in 3 years), looked for rental property before or after BR? Lots of questions but I am looking to get perspectives from similar experiences? |
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got there
Junior Member
United Kingdom
461 Posts |
Posted - 24 February 2009 : 21:11:13
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| We stopped paying mortgage in august 2008, filed BR in October 2008. Court action is just starting now Feb 09 but we are moving out this week into rented. We were completely up front with agents and we just had to provide them with a guarantor, we didnt find this house until Jan 09, so credit files were shot to pieces. HTH GT |
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frosie90
Junior Member
285 Posts |
Posted - 24 February 2009 : 21:22:06
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| Thanks for response Got There. I think this is what I am so confused about because I dont know whether it would be better to stop paying my mortgage now because if I carry on and find rented house then stop I have to time it right between mortgage payments and rental plus the upfront. Also I dont know whether once I have started renting whether then to file could jeopardise my new tenancy? When you say you were upfront, did they ask you for 6 months in advance or anything because that was my first plan to file for BR, then be upfront with Letting Agencies etc., and use the time my mortgage provider allowed me to stay in my home prior to eviction to save up? Just getting really confused. I have days where it all seems clear but others not so. |
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Jane.l
Average Member
511 Posts |
Posted - 25 February 2009 : 10:40:11
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I will just tell you what we did, it may help:
We stopped paying the mortgage and secured loan (and other debts) in January 2007. In March 2007, we found a rental house, had to have a credit check ( I was told that these check are not that probing and only CCJs, etc would show up ) and we passed it ok. I told the letting agent that our mortgaged house was sold (little fib, but they are not likely to bother checking, are they?  )
We had to pay one months rent as deposit and a month's rent in advance, we had to pay a bit of a higher deposit as we have cats and the house did not allow pets but I asked about this and the landlord agreed. I checked the rental agreement before we signed it and there was nothing mentioned in it about bankruptcy. We went bankrupt in August 2007. At our OR interview we asked if the landlord would be informed and the OR said no, whether he did tell or not, I do not know, as the landlord never mentioned it.
I don't see any point in you continuing to pay the mortgage if you are giving the house up |
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Melanie.n
forum expert
United Kingdom
1282 Posts |
Posted - 25 February 2009 : 12:28:35
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My advice to clients in your situation is this - if you are accepting of the fact that the property is to be handed back and any shortfall to be included in the bankruptcy, stop paying your mortgage use the funds to secured alternative accommodation prior to filing your petition (even if they want 6 months upfront). It is far better to do things this way as you can then rent a property in an area of choice rather than having to accept what ever is available due to your situation and possible credit check.
In answer to another post on this thread the OR will always automatically send out a letter to the landlord, but this ususal;y doea not cause a problem, as log as you pay your rent on time the landlord will not be too concerned.
Melanie Nicholas
28 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
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frosie90
Junior Member
285 Posts |
Posted - 25 February 2009 : 19:49:59
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Thank you both for your replies. Feels much better. Yes I think I should stop paying mortgage as I will then be able to save money for the deposits and up front rent. I had better contact my bank to cancel the DD as it is due on Monday. Obviously I will continue to pay the utilities etc. Presumably the mortgage provider will write to me when they realise the next payment is not forthcoming. Should I just ignore these or just say experiencing problems etc.? Also if it takes them ages to sell the house after re-possession, or if I hand the keys back once I have found a place, the shortfall created by the negative equity and arrears can still be included in the BR?
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frosie90
Junior Member
285 Posts |
Posted - 26 February 2009 : 20:47:05
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quote:
Originally posted by Melanie.n
My advice to clients in your situation is this - if you are accepting of the fact that the property is to be handed back and any shortfall to be included in the bankruptcy, stop paying your mortgage use the funds to secured alternative accommodation prior to filing your petition (even if they want 6 months upfront). It is far better to do things this way as you can then rent a property in an area of choice rather than having to accept what ever is available due to your situation and possible credit check.
In answer to another post on this thread the OR will always automatically send out a letter to the landlord, but this ususal;y doea not cause a problem, as log as you pay your rent on time the landlord will not be too concerned.
Melanie Nicholas
28 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
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frosie90
Junior Member
285 Posts |
Posted - 26 February 2009 : 21:09:19
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Sorry, accidentally posted last post without any message!!!
Went to see house today, fell in love with it, mainly because they accept cats and there is already a cat flap. Just have couple of questions?
They have asked me to fill in two forms, one which is the Letting Agency forms which is pretty straightforward. The other is a Tenancy Referencing Service which one of the questions asks about Bank Accounts. Again pretty straightforward but asks for Bank details.
First question, How many Credit cards held? (What do I answer if this month is the first month that I have not paid money to these accounts but have sent a letter saying "currently experiencing difficulties ... in communication with advice company ... etc) Shall I still say 4 cards held?
Second question, name of Bank and account number? (When I was originally contemplating an IVA I was advised to open a new bank account and leave my longterm bank account with its unpaid overdraft and loans associated to that bank outstanding) I have only held the new account for one month so no problems with them,but I have to send in 2/3 months bank accounts to Letting agency. I had no problem with my previous bank other than religiously using by massive overdraft but always paid my bills on time including my mortgage.But now I have decided on filing for BR sometime soon I have stopped paying this banks loan and the overdraft as my salary goes now into my new account. Also should I be upfront with the Letting Agency about my future plans for BR?
Third question not relating to the forms but with the way forward. If all goes well with the house I like to rent then I anticipate defaulting on my mortgage for my current house, using that money for my rent, moving in over a period of a few weeks as my mortgage provider wont have taken my current house off me at that point, and then filing for BR. As the rent is considerably cheaper than my mortgage and the house is smaller so utilities will be cheaper I will, when I do my SOA, appear to have a reasonable disposable income. Certainly more than I have had for a long time. I know they will sort out an IPA if I file but could they turn round and say No to BR because I could, in effect in their eyes, afford an IVA?
Sorry a lot of questions in one posting but these finer points are niggling me.
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Order of things prior to BR
