WWYD? Is repossession our only option?

[KneeDeepInLaundry]

We brought at the end of 2006 - paid a lot. The house was revalued last september and had dropped £15k.

We are now on SVR after coming off our fixed rate, due to a drop in DH hours we cannot afford the increase and are paying intrest only. No other bank willtouch us due to lack of equity in the house.

We hate where we live.

If we sell we will probably not make enough to pay estate agents fees, solicitors and clear the mortgage.

We owe about £6000 on a credit card and have a £400 loan and about £500 o/d.

We are stressed, unhappy and its slowly destroying our relationship if I'm complelty honest.

Is repossesion the answer, how awful is it?What does it mean for our future? Can we rent if we get repossed?

WWYD?

Ok It would seem that you have other debts along side the mortgage and are in negative equity ?

If the debt is more than £30k go bankrupt, don't struggle for years or bother with an IVA for £500 you can make all this go away and rent somewhere nice and start again.
You'll be clear in less than 3 years to start again and buy another house if you want, but learn a lesson from this please.
House prices go down as well as up if you can't afford something without over time etc then you can't afford it at all so sit back and wait for the next turn in the cycle because they always go up and they always come down, timing is the key.
Good luck.

Sorry just read it's about £20k ?

I'd still go bankrupt and get it over with as you hate where you live, you can start again in peace.

But if her credit rating is shot to pieces by a bankruptcy, it will be very difficult to find somewhere to rent. All lettings agents and most diy landlords are going to credit check any potential tenant and a recent bankruptcy will make them run a mile. The urgent debts aren't the ones on the house but the credit card, loan and overdraft and those only total about £7,000 and could be reduced to something manageable quite easily. Bankruptcy does seem extreme given the circumstances.

I disagree if £400 is the difference between keeping the house or not then she's in too deep.
She could struggle for 2 years or start again within 2 years her credit rating will be back to normal and basically you get the credit checks done for the rental property the week before you go bankrupt don't you

Plus the £15k negative equity remember so £22k in total, plus in all honesty if the neighbours are that bad who is going to buy the house at the moment anyway ?

i would go to cab and speak to a devt management advisor and see what your options are.

i wouldn't screw my chances of buying another house in the future if at all possible

we had a house reposessed in the early 90's when intrest rates went sky high we didn't buy again until last year. - then the bank chased us for the money that we still owed after they couldnt sell the house and then sold it cheap.

you said that paying intrest only will mean that you have to stay therelonger becuase you are not paying off the mortgage.

but thats not true, becuase you can sell it in the future when the prices go up.

1. go to cab, speak to a finance bod, prioritise your debts and get the cab to give you a debt management pack - you can often send letters to creditors - pro forma in the pack - and they will accept a minimum amount.

2)anti social behaviour. do your neighbours rent? who from? contact your police community police officer. make official complaint to landlord in writing. phone the police every single time there is even a small amount of trouble. complain IN WRITING even at the slightest bit of trouble.

3. your housing decision. if the asb stops and the debtors are satiated for now, will that make things better? will life be better? can you ride out intrest only for 18 months. then move to a better area?

CAB help with debt

But she's not in negative equity yet - she has about £6,000 equity still.

I agree that things look pretty desperate for the OP at the moment but I understand that bankruptcy stays on your records for six years (and often more although, officially, this is frowned upon). Much as I admire your tip on getting your references checked before the bankruptcy goes through, that means staying in the same rented property for several years effectively trapped.

Sorry, x-posted with custardo - good advice.

from CAB site

the name and address of the creditor
the account or reference number
the amount you owe
a copy of the original loan agreement you signed.
It?s a good idea to keep the latest letter or statement for each debt together in one place so that you can easily find them if you need them.

Priority debts
Priority debts include:

mortgage or rent arrears.
fuel arrears.
council tax arrears.
court fines such as magistrates' court fines for traffic offences.
arrears of maintenance payable to an ex-partner or children. This includes Child Support you owe to the Child Support Agency. income tax or VAT arrears.
TV licence or TV licence arrears.

Non-priority debts include:

benefits overpayments
credit debts such as overdrafts, loans, hire purchase, credit card accounts and catalogues
student loans
money borrowed from friends or family
parking penalties issued by local authorities.

Step Two - work out your budget
List all the income and expenses for your household. Be honest and make sure that the amounts are realistic.

Under income, include:

wages or salaries for your partner and yourself. Put in your net earnings, that is, after deductions. This should be the amount you regularly receive. If the amounts are different each month, average them over three or six months
any benefits you are paid, including Child Benefit and tax credits
maintenance from an ex-partner for you or your children. Include any Child Support from the Child Support Agency
contributions from other members of your family and any lodgers.

Under expenses, include:

housekeeping. Include realistic amounts for what you spend on food, toiletries, school dinners and meals at work, cleaning materials, cigarettes, sweets, children's pocket money and pet food.
housing costs. This should include mortgage or rent, a second mortgage or secured loan, buildings and contents insurance, service charges and life or endowment insurance cover attached to your mortgage
council tax
fuel and water charges
telephone charges
travel expenses. Include both public transport and the cost of running a car such as road tax, insurance, and maintenance
insurance that is not part of your housing costs (see above)
childcare costs
TV licence and any TV rental costs
clothes
any other essential expenses, such as medical and dental expenses or support for an elderly relative
money you should set aside for unexpected events and contingencies. This includes saving for things like the replacement of essential household goods when they break down.

When you've added up all the figures, you'll see if you have any money left over to pay your debts.

An advice agency such as your local Citizens Advice Bureau can help you write to your creditors

If you can?t afford to pay anything to your priority creditors and your situation isn?t likely to get better, the outcome may be very serious. Get advice straight away.

IF YOU HAVE MONEY LEFT OVER SHARE BETWEEN YOUR CREDITORS

Example:

You have total debts of £15,000. You have available income of £200 a month. You owe £10,000 to credit card company A and £5,000 to credit card company B.

Credit company A

Multiply £10,000 (debt to company A) by £200 (your available income). This equals £2,000,000.
Divide this by £15,000 (your total debt). This gives you the sum of £133 per month to offer to company A.

Credit company B

Multiply £5,000 (debt to company B) by £200 (your available income). This equals £1,000,000.
Divide this by £15,000 (your total debt). This gives you the sum of £66 per month to offer company B.

This is the system used by the courts for working out what you can reasonably afford to pay and it is accepted by most creditors.

You will need to write to each creditor. Send them a copy of your personal budget and a list of your other creditors to show them how you have worked out your offers. Make sure you keep a copy of everything you send to your creditors.

Creditors don?t have to accept your offers but usually they will accept them if the amount you offer is fair

OP sorry I feel like i'm talking about you whilst your not here.

But I seriously doubt she has £6k left in equity the way things are at the moment and that'll cover the EA's fees, legal fees at best.

OP sorry I feel like i'm talking about you whilst your not here.

But I seriously doubt she has £6k left in equity the way things are at the moment and that'll cover the EA's fees, legal fees at best.
Flogging a dead horse is not good for your mental health.

shelter finding a home after reposession

The reason I would get on with it sooner rather than later is that things are expected to get very very bad in the Autumn, the CAB waiting times have doubled in the last fortnight, the courts backlogs are getting bigger and bigger in the meantime people are being chased and bullied by debt collectors.
I have recently told people to give the debt collectors my mobile number and the illegal threats are breathtaking but if somebody is on your doorstep shouting at you it's hard to deal with correctly.

Sorrento - You may doubt it but you don't know. Re-reading the thread, she may have £16,000 of equity due to spring bounce.

OP - I refer you to my earlier post: put the house on the market as your first strategy. If it doesn't sell, then start to explore other routes. It's not a great situation to be in and I can completely understand why you are feeling so stressed but people have come back from much, much worse.

I think it is unwise to hang around though waiting for prices to rise.tThis week the IMF have said the uk is in the depths of a long recession with a long way to go and unlikely to see house prices recover to 2007 levels for anything up to 15 yrs!!!Anyone who bought in the last 2 yrs will have to stay put or risk negative equity.there is a tiny bounce atm so you could give it a go if you have a particularly seelable house.By the time you can buy again your credit record will be clear and prices probably at least another 30% .I agree with sorrento if 400 pounds puts your whole livelihood at risk better to cut and run and start again

sellable

Just got in from work and read this thread. Great advice, I do love MN!

Thank you to everyone who has taken the time to respond, it does mean a lot at a time when I feel like I'm staring down a big dark hole with no way out.

lalalonglegs you are right,people have come back from much worse and hearing how people have been in similar/worse situations and come out the other end helps to remind me that it wont always be this way for us.

I think after reading this thread and speaking to DH bankruptcy has to be the last resort.

We have phoned the EA and the house is now on the market, Noddy and lalalonglegs I think you were spot on about selling it so fingers crossed.

Custardo they was really helpful links (and if I could hug you I would ) Thank you. Over the weekend, DH and I plan to sit down and work through our budget and list of creditors using the C&P from CAB to see what we can achieve.

I am going to book an appointment with CAB on Monday, although DH isnt convinced we need them. He says as we are not actually defaulting there is no point. But I will still go and see them.

As far as awful neighbours go, we have done the whole police, council thing. They have had more visits from the council than I can count and the police cannot do anything without evidence (witnesses) Its like banging your head against a brick wall TBH. None of the other neighbours are willing to do the same and after a while it just becomes so tiring, like you fighting a constant battle.

Sorrento I completely understand what you are saying, I'm just hoping we have a few more options before bankruptcy becomes an issue

That all sounds really positive!We had to sell our first house years ago (am old) because I was ill an we couldn't pay the mortgage but things turned round a few years later and we are now in a lovely home mortgage free!So things do change xxHope you sell i am putting my house on in 2 weeks so will keep an eye out for you on teh property page

Knee deep go through everything and I hope it balances but just don't drag it out, if the figures don't work don't keep trying to swim up hill.
Bankruptsy isn't the worse thing you could do, becoming ill with worry is.
Good luck.

It sounds as if you feel a bit more in control - I really hope it works out for you.

yay, really happy for you. grabbing it by the balls - thats the way to do it

xxx