I want to hand over the house and rent

[whiskey]

Just about to go bankrupt, almost finished filling in my forms. A couple of questions regarding my home. I have decided to give up my home as the mortgage is too expensive and we have no way of finishing it before we retire. My questions are?

Can I start to rent now before I have gone into bankruptcy and not pay the mortgage and pay the rent instead, or should I hand over the property which has about 10,000 negative equity to the official receiver when the time comes. I am afraid I will be in arears with the mortgage by then and nobody I know wants to buy the interest in it. Or should I just go into 3 months arrears and have the house re-possessed. Can the house be re-possessed whilst in the hands of the OR?

What I am trying to say really is that I want to hand over the house and rent but I don't know what order to do it in. There would be more money for an IPO if I did't have the house, but if I hand it to the OR whilst paying the mortgage and I went into arrears, they would re-possess it anyway and then would I be paying less on my IPO. Can an IPO be altered to include further payments? and I wonder if this allowed?

Please can you help. The whole of my salary is used in mortgage money and at last we have admitted defeat and are letting go of the house. I have not been able to find a post with the answer to this, if it has been discussed before, please direct me?

[Soulgrowth]

Hi Whiskey ... just wanted to say hello and welcome to the Forum ... one of the experts will be along soon with some sound advice [:)]

Debbie

www.babynamings.co.uk

www.soulgrowth.co.uk

[Adam Davies]

Hi
If you are sure of bankruptcy then it is time to look after yourself regarding housing.
I would find a rented property and then stop paying my mortgage to fund my rented property.I would then petition for my bankruptcy.Be sure that your new landlord will be happy that you are going bankrupt.
An IPO will be made following a meeting with the OR and will be a maximum of 70% of your disposible income.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Soulgrowth]

From an emotional point of view, I would agree with Andy. Following Andy's suggestions would put you much more in control of the situation Whiskey ... And feeling as if you are on top of things is important at a time like this.

In my mind, it is much better to actively give something up than to have it taken away from you and it shows that you are addressing the situation responsibly.

Also, if you organised the rental before the bankruptcy you may be in the position where you don't have to pay a huge deposit up front?

Debbie

www.babynamings.co.uk

www.soulgrowth.co.uk

[wen]

Can I ask a similar question?

If I find myself in the same position as Whiskey, is it better to send the keys to the Mortgage company on day 1, rather than wait for 3 mortgage payments to bounce and then get a court order for repo?

[mikebdomain]

I am in total agreement with Andy on this one, better to deal with it now.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[coco]

Hi,

I went BR in March, as i had no-one to buy my BI i decided that i would do a voulentary repossession in July i did not make the last 2 payments of my mortgage and then let the mortgage company do the sale etc. I am now in temp accommodation by the council waiting to be housed. I believe all cost will be deducted from the sale and monies that are left are to be handed over to the OR. Judging by the sale there would be approx 15k for the OR. I recieved a letter from the mortgage company over the weekend regarding the outstanding arrears i am due to speak to them this morning so i will let you know what the score is on arrears.

view my blog http://coco.blogs.iva.co.uk

[mish1953]

Whiskey,

I dont want to be a killjoy but feel that you need to consider this with great care.
You say you want to rent , is that privately of from from a local authority/ housing assc ?
If renting privately you may have difficulty renting if you are BR , once BR most letting agents wont touch you or will require a huge deposit ( circa 6 months rent ) and possibly a guarantor.
If renting from a council they may well say that you have voluntarily made yourself homeless in which case they have no legal requirement to house you immediately .
If you have dependant children if school age that can make a difference .

Have you considered asking your m/gage company if you can go onto an intrest only m/gage ? It would be cheaper than a repayment m/gage.

Im am BR, have my own house with £20 positive equity, am a single parent with a 14yr old , work full time and am paying an intrest only m/gage, have no one to buy my equity . My hous e will be taken off me eventually and I will have to make sure that the OR gets a possession order so that I can apply to the council as homeless as I cant afford the £3000 deposit that I would need to rent privately.

Good luck
Mish

[whiskey]

Thank you for your help. I am inclined to follow Andy with the process I will undertake. Does anyone know how long I will have to vacate my home after I have handed over the keys?

Mish, I do not have any other option than this one. My husband is 60 and I am 58, I cannot even consider undertaking another mortgage if we have no way of paying it in our working lives. I intend to rent privately with a guarantor and references. I will need to find a landlord that can understand. I will have quite a generous amount to give to the OR for three years once this is accomplished. I just feel that I need to be prepared at my time of life for either not being able to work, being made redundant or retirement. Its best for us both that we do this now. I still feel dreadfully guilty about giving up the house with negative equity.

[Adam Davies]

Hi
I would vacate your home on the day that you hand back the keys.
Do not feel guilty as you have tried to look for other solutions.At the end of the day your quotr "the whole of my wages is used to pay the mortgage" says it all.
Get your rented property sorted and when you move in hand back the keys,do not make anymore payments on the secured loans once you are sure that you have secured your rented property.
Then petition for your own bankruptcy
Good luck
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Sadsack]

Hi whiskey

I am in a similar position - have gone BR and have decided to give up the "bricks and mortar". Fortunately, I have no children and therefore cannot see the sense in holding on to the house when I am going to lose it anyway. Mish is correct, estate agents are extremely reluctant to help you so it would be in your best interests to find alternative accommodation now and then petition for BR.

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[whiskey]

I have been looking at rental properties and most of them say that they use a professional referencing agency. I don't know what sort of stuff they will look at, does anybody know? but will any of the unsecured creditors I have that have not had a payment from me whilst I have been sorting things out (the question of IVA or BR) (about 3 months) have put me on any 'bad' lists yet. I am sure these people will be able to find out my current situation, or can they?

[Andrew Graveson]

Hi Whiskey,
There is likely to be a credit check. If there are missed payments (though not necessarily really recent ones), defaults, or CCJ's they will probably show up.
I'm not aware of any other kind of list that you could be placed on.

Andrew Graveson
Independent Mortgage Broker & MD Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[ray_a]

Sorry late getting to this due to work!

Don't forget you will need a sizeable deposit to put down on the rented property!

[whiskey]

In my area, pre bankruptcy the trend seems to be a months rent in advance,returnable and £600 per month will get you a 3 bedroom unfurnished property. Do you think I would be so lucky? I am hoping I get through the credit checks first.

If I do manage to rent before I submit my bankruptcy forms, do I change the forms to show a rented accommodation and wipe the mortgage part and secured loan off the BR form. It will make a hell of a difference to my disposable income and it may look like a don't need to be bankrupt at first glance, but handing my house back will leave a shortfall for the second charge that will need to go to the bankruptcy won't it? How can I communicate to the court what I have done. Do they go into written explanations on the day?