Jump to content
House Price Crash Forum
Guest The Relaxation Suite

Walking Away From Mortgage

Recommended Posts

Guest The Relaxation Suite

Hi All

Just a quick question about the above. A relative of mine has been booted out the public sector and lost his job, and his wife is possibly facing a similar fate, in which case it is unlikely they will be able to continue servicing their mortgage. What is the procedure for sticking two fingers up at the bank under English law? If is amounts to a declaration of bankruptcy, does this get written off after a while and what are the short and long term consequences?

Grateful as ever,

T

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

When did they buy?

Not 100% sure, I think maybe 2005. They are considering letting it out as that market is quite strong, and then moving to work in another area where they will of course rent. If this cannot happen then they will obviously just go under.

Edited by Tecumseh

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

They will be chased forever, they will never get credit, or a cheque book, nothing.

As it should be.

When the banks lend levels of money they know to be absolutely suicidal, then the guilt is evenly distributed between both creditors and debtors.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

So is that it then? Loose their job and instantly throw in the towel? There must be some other debts etc or why would they instantly consider the nuclear option.

It's the last option, after looking for more work, drawing unemployment money, and letting it out. They want to keep their home. But the wise course is to plan for the worse case scenario. There are no debts other than mortgage.

Share this post


Link to post
Share on other sites

Not 100% sure, I think maybe 2005. They are considering letting it out as that market is quite strong, and then moving to work in another area where they will of course rent. If this cannot happen then they will obviously just go under.

So selling and clearing the mortgage isn't an option?

Share this post


Link to post
Share on other sites

So is that it then? Loose their job and instantly throw in the towel? There must be some other debts etc or why would they instantly consider the nuclear option.

The best place I know for advice on this is on the Motley Fool website, find the dealing with debt board. Advise them to post there, the advice is very good.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

So selling and clearing the mortgage isn't an option?

The difficulty with this is that first houses in this area (rural Wales) are not selling at all, and second, even if it did the debt owed on it is larger than what they could ever hope to get by selling the property. They are in the classic negative equity debt trap.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

The best place I know for advice on this is on the Motley Fool website, find the dealing with debt board. Advise them to post there, the advice is very good.

Will do as advised, thanks leicestersq.

Share this post


Link to post
Share on other sites

They will be chased forever, they will never get credit, or a cheque book, nothing.

As it should be.

Unfortunately, they can file for bankruptcy and their debts will be wiped clean. I believe that they can be discharged in less than a year.

Share this post


Link to post
Share on other sites

The difficulty with this is that first houses in this area (rural Wales) are not selling at all, and second, even if it did the debt owed on it is larger than what they could ever hope to get by selling the property. They are in the classic negative equity debt trap.

They shouldn't have bought it then, should they?

Sux to be them. :lol::lol::lol:

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

Unfortunately, they can file for bankruptcy and their debts will be wiped clean. I believe that they can be discharged in less than a year.

I thought this was the case. The thing is that they are not irresponsible people, and their only crime was to have bought a house in 2005, and a modest one at that. Sweeping statements without knowing the facts as that posted by Harry Monk are an inherent feature of human nature and we are all guilty of it at one time or another.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

They shouldn't have bought it then, should they?

Sux to be them. :lol::lol::lol:

We all behave like you from time to time. I even do it myself. Speaking of things I know nothing about is my worst character flaw in fact.

Share this post


Link to post
Share on other sites

We all behave like you from time to time. I even do it myself. Speaking of things I know nothing about is my worst character flaw in fact.

I responded to your post, in which you gave the necessary information.

What else do you expect me to say?

I have as much sympathy for someone who buys a house they can't afford as I would have for someone who buys a yacht or a Rolls-Royce that they can't afford, simply because they can get the finance to buy it.

Your friends are idiots.

Share this post


Link to post
Share on other sites

Hi All

Just a quick question about the above. A relative of mine has been booted out the public sector and lost his job, and his wife is possibly facing a similar fate, in which case it is unlikely they will be able to continue servicing their mortgage. What is the procedure for sticking two fingers up at the bank under English law? If is amounts to a declaration of bankruptcy, does this get written off after a while and what are the short and long term consequences?

Grateful as ever,

T

This is a reliable advice site (unlike many "ambulance chaser" companies) :

http://www.nationaldebtline.co.uk/england_wales/

If there's any question of bankruptcy (credit card debts, car loans as well??) it is VITAL to do things in the right order - secured debts are NOT necessarily or entirely wiped out by bankruptcy. Get advice from National debtline or the CAB.

Share this post


Link to post
Share on other sites

They will be chased forever, they will never get credit, or a cheque book, nothing.

As it should be.

I don't necessarily agree

Firstly, it is not possible to buy a piece of land and put your own place on it at low cost. The entire planning system is geared against the ordinary person doing this. Thus, the vast majority or our population are landless, urbanised peasants, in effect. Secondly, cheap social housing (eithe private or public) is not available in anything like the volume necessary to meet the demands of low income earners.

Low earners are forced to either pay very high rental prices relative to their income or pay a massive price for a mortgage which they can only afford to pay as long as interest rates are stupidly low. Thus, mortage payments per-month (irrespective of the massive capital debt) are often cheaper for many people. Or, at least they have been to this point. Things may change of course.

However, if interest-rate rises or mass-unemployment hits the country, the knife edge that a lot of people have to live on becomes untenable. This is where a lot of people are now finding themselves. Including this couple, by the sound of it.

Under such circumstances it seems to me that the level of responsibility a person should shoulder for their actions should be directly commensurate with the level of choice underlying those actions. As I have poiinted out, for many people, their level of real choice was limited.

Edited by tallguy

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

I responded to your post, in which you gave the necessary information.

What else do you expect me to say?

I have as much sympathy for someone who buys a house they can't afford as I would have for someone who buys a yacht or a Rolls-Royce that they can't afford, simply because they can get the finance to buy it.

Your friends are idiots.

The problem you have is that you argument is not following any logic. How can one apply a proactive normative evaluation to something that happened in the past? The people in question borrowed sensibly, bought a modest house, and then lost their jobs. For your rather inane logic to work out, they could only be guilty of the idiocy you are so keen to show on your own behalf if they had a time machine, went back in time after the redundancies, and bought the house again.

You, therefore, are the idiot. Clearly so, in fact.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

Whilst its always good to plan for the worst outcome, they should also be making every effort to seek new forms of income and also negotiate with the lender so see if the payment can be reduced in the short term (aim for 5 years period) to buy time whilst looking for employment.

Likewise can they not also look into insurance to cover the loss of jobs (bit late with one gone but its not a done deal for the other job loss yet)?

I'm surprised more people are not or have not taken out insurance to safeguard mortgage payments during these uncertain times.

Thanks trickster

Yes they have insurance as well to cover them if they both lose their jobs. I think this will cover them for one year, so hopefully this will allow further breathing space. As I said above, they under no circumstances want to lose their home. I'm just enquiring on their behalf should things get out of control.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

This is a reliable advice site (unlike many "ambulance chaser" companies) :

http://www.nationaldebtline.co.uk/england_wales/

If there's any question of bankruptcy (credit card debts, car loans as well??) it is VITAL to do things in the right order - secured debts are NOT necessarily or entirely wiped out by bankruptcy. Get advice from National debtline or the CAB.

Thanks for this will pass it along - - just mortgage debt by the way. They don't borrow money except of course for a roof for the reasons made by tallguy.

Edited by Tecumseh

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

I don't necessarily agree

Firstly, it is not possible to buy a piece of land and put your own place on it at low cost. The entire planning system is geared against the ordinary person doing this. Thus, the vast majority or our population are landless, urbanised peasants, in effect. Secondly, cheap social housing (eithe private or public) is not available in anything like the volume necessary to meet the demands of low income earners.

Thus, low earners are forced to either pay very high rental prices relative to their income or pay a massive price for a mortgage which they can only afford to pay as long as interest rates are stupidly low. Thus, mortage payments per-month (irrespective of the massive capital debt) are often cheaper for many people. Or, at least they have been to this point. Things may change of course.

However, if interest rates rises or mass-unemployment hits the country, the knife edge that a lot of people have to live on becomes untenable. This is where a lot of people are now finding themselves. Including this couple, by the sound of it.

Under such circumstances it seems to me that the level of responsibility a person should shoulder for their actions should be directly commensurate with the level of choice underlying those actions. As I have poiinted out, for many people, their level of real choice was limited.

Exactement, monsieur.

Share this post


Link to post
Share on other sites
......The people in question borrowed sensibly, bought a modest house, and then lost their jobs.......

The way I see it, they couldn't afford the house so they borrowed money that they couldn't afford to repay. Loss of earnings insurance would have been sensible, they didn't have it, so they did not borrow sensibly.

Share this post


Link to post
Share on other sites

The problem you have is that you argument is not following any logic. How can one apply a proactive normative evaluation to something that happened in the past? The people in question borrowed sensibly, bought a modest house, and then lost their jobs.

The reason I chose to rent in 2007 is that I could see that I would lose my job in 2010. Did they not think that they might lose their jobs the following year when people doing productive jobs were no longer paying the taxes which paid their wages?

Why didn't they rent?

They are in negative equity due entirely to their stupidity and now you are looking for sympathy. In their case, as far as I am concerned, sympathy is just some word in the dictionary, somewhere between Shit and Syphilis.

The sooner these people get kicked out of their house, the sooner I can buy it for a sensible price.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.