we did a joint bankruptcy in july - have no equity in our house,we have now moved into rented accomodation. We want to do a voluntary key hand back but have been told by our lender that we will still be liable for any shortfall once the house is sold, is this correct? I assumed it would be included in the bankruptcy
No, you won't be liable for any shortfall however mortgage companies like to say you are. They normally ask you to sign a voluntary repossession form and this includes a shortfall clause so if you do sign the form make sure you check for this clause and tell the mortgage company that you won't sign with this clause in the form.
If the mortgage company refuse to accept the keys without you signing a form with a shortfall clause in it then refuse to sign the form and they will have to go through the courts to repossess the house. This will cost them money so expect them to hassle you with phone calls and will probably take 6 months or so for the process to be completed.
You will receive a notification of the court date for the repossession but, unless you are contesting the case, there is no need to attend the hearing.
a lot of mortgage providers try to make you believe that you will still be liable for shortfall even in BR and lots more try to get you to sign a form accepting responsibility of the shortfall. In a nutshell the shortfall if listed on the SOA in BR is covered (even if you have signed to say otherwise, if addressed properly) Don't worry , give them the keys back, send by Special delivery if they won't accept them personally and don't sign any forms accepting any shortfall liability.
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman) RevivaUK helped me through it all i can't recommend them enough!!
I know you probably want to draw a line under things but for some reason the Mortgage Companies don't want to make life easy for themselves.
If they don't want to accept the keys back without you signing a form then let them take you to court. It will just cost them more money and you don't have to attend.
The only issue is that when they repossess they will insist on sticking a big sign up in the window announcing that you that have been repossessed (well saying to contact them if you want to to retrieve any of your belongings even if you left the house empty and asked them not to). Obviously your neighbours will put 2&2 together but if this doesn't bother you (I didn't bother me but upset my wife) there is no issue.
we did a joint bankruptcy in july - have no equity
Posted - 13 October 2009 : 11:44:12
