When A House Is Reposesed?

[NIOWEN]

I know a girl who bought her house for £160k a few years back, its peak value was £200k or so. She became ill then lost her job so then had to take a low payed job just to get by but she couldnt afford to pay her morgage for over a year. She ended up moving out and the bank has put the house up for sale. Its on the market for £55k (N Ireland is in a real mess). So if it sells she will still owe £105k or so but she has no job so will probably go bankrupt....who pays the bank the other £105k? Do they have insurance or is the dept wrote off as a bad debt?

[izzy]

I know a girl who bought her house for £160k a few years back, its peak value was £200k or so. She became ill then lost her job so then had to take a low payed job just to get by but she couldnt afford to pay her morgage for over a year. She ended up moving out and the bank has put the house up for sale. Its on the market for £55k (N Ireland is in a real mess). So if it sells she will still owe £105k or so but she has no job so will probably go bankrupt....who pays the bank the other £105k? Do they have insurance or is the dept wrote off as a bad debt?

I'm no expert but I'd guess that if she sells the house for 55k, she still owes the bank 105k. Obviously she can't pay that so, as you said, her next step is bankruptcy. The debt should show up as a loss on the bank's balance sheet. However, some banks have reportedly avoided forced sales so as to keep these losses off their balance sheets.

[interestrateripoff]

If they sell for a loss don't they then ring up the friendly Mr Chancellor and ask the taxpayer for a bit of cash to make up the shortfall as they are an essential part of the economy?

[jonb]

I know a girl who bought her house for £160k a few years back, its peak value was £200k or so. She became ill then lost her job so then had to take a low payed job just to get by but she couldnt afford to pay her morgage for over a year. She ended up moving out and the bank has put the house up for sale. Its on the market for £55k (N Ireland is in a real mess). So if it sells she will still owe £105k or so but she has no job so will probably go bankrupt....who pays the bank the other £105k? Do they have insurance or is the dept wrote off as a bad debt?

She still owes the bank the other £105k. In England the debt survives for 12 years rather than the usual 6 for other types of debt. I believe Northern Ireland is the same. She would be advised to go bankrupt now rather than face having to pay it when she gets back on her feet.

[nickincash]

She still owes the bank the other £105k. In England the debt survives for 12 years rather than the usual 6 for other types of debt. I believe Northern Ireland is the same. She would be advised to go bankrupt now rather than face having to pay it when she gets back on her feet.

I think this is incorrect - the lender must persue the debt within 12 years but the debt is for life. This is my understanding.

[Bloo Loo]

I think this is incorrect - the lender must persue the debt within 12 years but the debt is for life. This is my understanding.

close, the statute bar is 12 years....it dies if teh debtor doesnt acknowledge the debt for 12 years.

acknowledge it at 11 years and 11 months and 30 days, and the clock starts again.

[cartimandua51]

I know a girl who bought her house for £160k a few years back, its peak value was £200k or so. She became ill then lost her job so then had to take a low payed job just to get by but she couldnt afford to pay her morgage for over a year. She ended up moving out and the bank has put the house up for sale. Its on the market for £55k (N Ireland is in a real mess). So if it sells she will still owe £105k or so but she has no job so will probably go bankrupt....who pays the bank the other £105k? Do they have insurance or is the dept wrote off as a bad debt?

Bankruptcy does not apply to secured debts so it's vital that the bank repossesses BEFORE she goes bankrupt, otherwise she will still owe it. Advice from National Debtline or CAB essential here.