My ex partner and myself bought our house in April 2007. We took out a loan of approx 20k with First Choice secured against the property. In the last 10 months we have split up but continued to live in the house for both financial reasons and for our children. We decided to sell our last towards the end of last year but because of our situation, my ex wanted a quick sale so she put the house up for approx 5k less than purchase. We contacted First Choice to see if we could unsecure the loan as we were happy to continue paying it. We filled all the necessary paperwork and kept them completely informed. Anyway it appears now that they will not unsecure the loan as there is no equity on the property and it looks as though our sale will fall through. I was quite happy to continue making the payment as a personal loan. Now we have a problem where our mortgage is due to increase in May and my ex partner's job is looking very unstable as her company are making cutbacks. Its all a bit of a mess so any advice would be appreciated as it seems the finance company and other people are not showing an awful lot of interest or being very helpful.
Am I correct in my assumption that your house is currently on the market and you have found a buyer who is offering less than the mortgage with First Choice?
If you have a buyer for the property, then as long as the selling price is reasonable, they should be pursuaded to allow the property to be sold. Unfortunately though the decision is theirs to make.
I have had a few clients in this situation, or similar. A solicitor's letter explaining your circumstances and the fact that if the sale is not allowed to continue, you will be unable to maintain the mortgage payments can be a great incentive to make the mortgage company change their mind. It should be pointed out that if the house is subsequently repossessed then you will not admit liablity for the costs of reposession and any shortfall over and above that which there would have been had the sale been allowed to continue. It should be stressed that any such further losses will be their responsibility as they did not help you minimise the total shortfall on the mortgage when you were willing and able to do so.
The solicitor who is acting for you in the sale of the property should be able to help you with this.
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
Thank you kindly for your quick responses. I must point out that our mortgage is with a popular high street lender. The loan is purely from First Choice (secured on our property).
It is a bit of a mess as it looks as though the sale will fall through and due to the current climate, who knows how long it will take to sell. I just wondered if an IVA would be the way to go. I have looked into the pros and cons and to be honest, it would be worth the cons.
It would mean in essence, I could clear the loan and maybe a couple of small things and then maybe look to re-market the property whilst paying the IVA. Is it as straight forward as this?
I assume that you mean you will retain the property, continue to pay the mortgage and secured charge, and from your remaining disposable income offer an IVA to creditors.
If this is the case, how much do you owe on an unsecured basis, and how much do you feel you would be able to offer creditors via an IVA?
