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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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My interest only mortgage of £400,000 expired in July 2013

Resolved Question:

My interest only mortgage of £400,000 expired in July 2013 and I havent got the money to repay the lender. I was attacked by masked men at the property 3 years ago and haven't lived there since.I paid the mortgage until it expired and the council tax until April 2014. I rang the lender twice and they told me to put the property for sale which I have done. I am a pensioner and can't afford to live there so I am staying with relatives. I want them to repossess the house as I cant afford to continue paying the council tax and any bills. Can you suggest what I should do?
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts :

Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Did you not have an endowment policy to cover the final figure please?

Customer:

No I don't

Alex Watts :

Have they said whether or not they will take the house back?

Customer:

They just said to put it up for sale, but its been up for sale for 6 months and it was valued less than the mortgage amount.

Alex Watts :

Yes. Sadly it is bad news. Generally they will not take a house back unless there is an Order for possession.

Alex Watts :

If you can not afford it then you have a number of options:

Alex Watts :

1) Post the keys back and ask them to take it back

Alex Watts :

2) Stop paying any more and they will seek an Order for possession

Alex Watts :

3) Once they have that then you can show the Council and you may be entitled to Council Housing

Alex Watts :

4) As there is a large debt you could consider going bankrupt if you have no assets

Alex Watts :

This will in effect wipe off any debt and you will be free after 12 months

Alex Watts :

I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

I haven't paid anything since July 2013 but they haven't sent or done anything further

Alex Watts :

Ok - I understand. I would hope they would act fairly soon to repossess.

Customer:

Do you think sending the keys back to them is the best way to proceed? Will they send me bankrupt and if so what happens? I only have a small amount of savings, around £2000 in the bank and my pension of £150 a week.

Alex Watts :

I would write to them first and say you want them to voluntary repossess.

Alex Watts :

If you go bankrupt the Official Receiver takes control of your assets.

Alex Watts :

But if you have nothing or very little then creditors will hardly get anything.

Alex Watts :

Then after 12 months generally you are discharged.

Alex Watts :

Can I clarify anything else for you?

Customer:

Will they definitely send me bankrupt if I ask them to voluntary repossess? If they do then how long does the bankruptcy proceedure take?

Alex Watts :

Not necessarily. If they know you do not have any assets they may not bother. You can make yourself bankrupt.

Alex Watts :

The process is there is a Court hearing and the Judge makes you bankrupt.

Alex Watts :

The process it quite quick, a few months.

Customer:

How much does it cost to make yourself bankrupt?

Alex Watts :

£175 but you may get fee remission. There may also be the Official Receivers deposit which I think is about £600.

Customer:

Finally, the council tax will be due in April what do I do about that?

Alex Watts :

That can also be included if you are bankrupt.

Alex Watts :

But wait as long as possible - ask the mortgage company to repossess.

Alex Watts :

Once they do then Council Tax becomes their responsibility

Alex Watts :

Then you can decide whether you want to go bankrupt or not.

Customer:

I shall write and ask the lender to voluntary repossess then and leave the bankruptcy for later. Just concerned that the council tax people will be on my back for payment as everything takes so long to get further, and what if the lender doesn't answer me, they are not helpful when i've phoned them.

Alex Watts :

Yes, but make sure everything is in writing.

Alex Watts :

Can I clarify anything else?

Customer:

Thank you for your help with this.

Alex Watts :

All the very best.

Alex Watts :

If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.


Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.


 


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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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