Hi There - We are about to undertake a voluntary repossesison - we think a shortfall figure will be around £85,000 + 2 loans and a credit card totalling a further £9,000. We have been advised to enter into an IVA soon - BUT, we will not know what the shortfall is for a very long time (until the house is sold) - What do we do?
The shortfall can be estimated, but please try and get your IP to be realistic about the figures used. Mortgage shortfalls have a habit of getting much bigger than they may originally seem - and in my practice we generally over-calculate rather than under-calculate.
Your IP should also hold discussions with the mortgageee prior to presenting the proposals, given that the shortfall is such a high proportion of your aggregate debt.
Hi Melanie - the thing is we have not moved out of the property yet - great concern - awaiting confirmation of our rental accommodation. Should we hold tight on all processes until after we have moved as correspondance will come to the house we are handed back... Also the loans are with our current banks (1 each) - so if they get wind they will freeze the accounts?
It is all a real mess at the mo - as you prob gather...
I just do not know which way to move us forward to do 'the right thing'
I assume that you have already consulted an IP, so am wondering what they have advised you on these points?
If you have made the decision to move out, and hand the keys back to the mortgagee, then I would be happy to put an IVA forward on the basis of the aready known current shortfall, plus a provision built in for selling at a lower price and costs.
If you are talking about entering into an IVA, you do need to be getting a new current account sorted out with a bank to whom you are not indebted. Did your own IP not advise this at an early stage of the process?
No - our IP has been an early stage contact only - They have said that we should complete their forms and post it all back within 14 days... I did explain to them our situation in full and they said that we should 'consider' another bank account - We cannot set up a bank account in the new address as the rental property is not confirmed as yet - so that seems to be difficult - If we close our banks down, and they freeze the money will be tighter! I am currently using the overdraft to survive until my first pay day (start a new job Monday), so we need all of our money in the banks live at present - My partner's money in the account is to be used for the rental monies - So scared about doing anything until the accounts have been used up of monies. Bascially, advice on the stages (right stages) to follow would be good. Our IP has not been very helpful so far - they just seem interested in getting us signed up - We need a few more weeks I think?
Just use your current address for the new bank account, and then change it over when you have moved. And then you can safely get all of your salaries and standing orders/direct debits transferred across to the new account.
At this stage, you should not be scared and should be getting a lot of ongoing support from the IP you have chosen to represent you. If you have an uneasy feeling about them at this stage, is this a recipe for a good working relationship moving forward? If not, then you may wish to speak to another couple of practitioners - it doesn't cost anything and may be interesting to compare the quality of advice and service levels.
There is nothing complicated about your case, but your IP should be currently sharing some of the burden of this with you.
Have a chat with Melanie's Office before you go any further - Melanie takes all the worries and concerns on board and goes far beyond what she is paid to do - you will not regret it - that I can promise you from experience - her "after service" is first rate too. J
Hi Melanie - Thanks for the information so far - real helpful - So we will run the accounts at present then once new bank account set up, transfer the Direct Debits to the new account - A tight time during this transition I guess. As the monies will be frozen in one account, but at that stage we hould have spent the overdraft and maxed out our credit card
As you know we do not know what the shortfall figure will be - So does the IP deal with this if we notify the Mortgage company when we return the keys that we have a management company (IP) dealing with our finances - would this be the right way forward?
The IP also has asked what our monies will be in the new property (expenditure) - This is difficult to sumise without having it fully secured - any ideas on this one? I think we may just be changing IP from the sounds of it - as they have not really answered my questions so far...
Your IP shoud deal directly with your mortgage company as soon as you provide instructions to them. You will need to provide best estimates of the amounts your are likely to be paying for rent and utilities in the new property, as this sets the level of your disposable income hence IVA payments. I would start looking at rental properties in your area right now, and once you have addresses the local council and water authorities can give you ideas of the countil tax and water rates. You can then base your electricity and gas usage on your previous experience, making allowances if the property is larger or smaller, and build in any additional travelling costs you may incur if it is further away from work and schools.
Not difficult to do, but you do need the support of an IP to help with these questions - which are actually quite normal given your circumstances and not strange.
Your situation is similar to mine a year or so back...being repossessed and entering into an IVA at the same time. Nightmare scenario all round!!
We changed bank accounts while still in our old home and changed the address details when we moved. As Melanie says, we used previous usage for the I&E form re utility usage etc and found out what the council tax was.
It all seems daunting, but it can be done and we are now 13 months down the line a lot happier and stress free.
Was there much difference in your actual figures to the estimates you intially made, Angelrainbow, and if so how did you manage to fund any difference?
Hi Melanie, the actual figures for the new home were actually pretty similar to our estimate, not too surprising given it was a similar size home and we used figures from the old home.
