How Do I Get Out of Negativity Equity Hell?

[Veronica]

Hi

I bought a house 4 years ago for £111,000. I currently owe £104,000 to my mortgage company - Alliance and Leicester. The best valuation I can now get for it is £90,000, however all houses on my street for sale are selling at £65,000. I want to get rid of my property as it's costing me a fortune in repairs. I also have to commute somewhere else for work and soon need to relocate. If I rent my house out there is still a significant shortfall on what I will have to cover the mortgage each month. The stress of this is absolutely killing me as I know I'm not ever going to get the money back out of this house that I put in and it's going to be years before it comes back to the value I bought it for.

I want to hand the keys back to the mortgage company, however I will have the remaining debt to pay. I do not have the money for the debt so will have to become bankrupt. What I can't find out is what happens after I become bankrupt in terms of will I still have to pay money back. And also, if I am working (earn £35,000) can I claim bankruptcy as I have no other debts and have disposable income.

Or is there any other way out of this situation that does not involve me having to disappear overseas with no forwarding address or jumping off a bridge!!

This situation is HELL, I'm TRAPPED, and there seems to be no way out.

[ceylon]

depends on what you want to do
i have a friend who gave the keys back and they chased them for 40k they used the letters and apart from the odd letter that was it for them

[boothstowndave]

Hi Veronica,

Remember when you go and hand back the keys, the mortgage company will move quickly to chuck you out. Ask them to reduce the payments or if you can take a payment holiday. This will give you a bit more time to get your head around what you need to do.

[Veronica]

Hi Boothstowndave

Thank you for your reply. My morgage company doesn't seem to want to do payment holidays. But I'm sure I can ask again. I had reduced payments last year when I was made redundant from my job but the shortfall just gets accumulated as arrears which they are now pressuring me to pay off. They won't consider any other options until I've paid the arrears which total around £1000, on top of my monthly normal £589 payment. Apparently they seem to be under the impression that I crap money! I'm moving for my job elsewhere and need to rent out the house, but rent won't cover the mortgage and there will be a letting agent fee to pay as I'm moving too far away to be able to maintain my property myself. I have absolutely no emotional wish to stay in 'my' home and would happily wave good bye to it asap. It's not making me money, only costing me and it isn't going to realise the original price I paid for it for at least another 3 years. In working out the maths, it is cheaper and more cost effective for me to walk away from it now while I still have my sanity - well, just about.

Veronica

[smilingalltheway]

if you're going to do a repayment holiday, you may aswell go down the official offer route.


read the posts in the mortgage section of the forum, it covers the official offer.

[boothstowndave]

I know what you are going through. The FSA does have a set of rules that mortgage companies have to stand by. Look up the FSA's web site or phone them. I spoke to a guy who was in the same sort mind set as me. Once you have done the deed, you can use the DCA letters. It's time to live.