Mortgage with Sub prime lender, we are now considering our options

S

Samwise1

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Personal and income details
Net (i.e. after tax) Income self: nature of income e.g. self-employed/public servant etc :Both me and my husband on Social welfare €372.40 per week (Joint)

Income history: e.g. "I was made redundant in June 2011 and have not had any work since..." :My Husband just finished a degree in Business computing & digital Media on the Back to education scheme. I was made redundant in 2010, no work since.

number of children :2
Amount of Mortgage Interest Supplement received :€74 per week

 Home loan
Lender: Start Mortgages
Amount outstanding: €292,343.
Value of home: :€160,000
Interest rate: specify whether tracker or SVR or fixed rate :4.10000% Variable
Monthly repayment :should be €1,334.39 per month but on an arrangement through MARP at €129.31 per week
Amount in arrears :€25,000

Summary of discussions and agreements with the banke.g. in Marp since Jan 2011 . Have been on interest only since then. : Have been in full contact with them from the beginning and worked through the MARP process, came to an arrangement on reduced payment. As above



Other loans and creditors - delete those which don't apply to you

No other Debts

Other savings and investments : None


How important is retaining the family home to you?
Which of the following best describes your situation?
I would like to keep it, but will get rid of it if it means I can get rid of the mortgage associated with it.

Any other relevant information: For the sake of our sanity as a family we feel maybe bankruptcy in the UK is our only option. We would be sad to see our house go, but cannot go on for another X amount of years like we have for the last 5 years.

What is your preferred realistic outcome?
For example: "I will never be in a position to repay the home loan. So I want to sell the house and deal with the shortfall" : We will never be in a position to repay the home loan, We cannot sell due to NE, To get on with our lives we feel maybe bankruptcy in the UK ( and we may even stay there as we are originally from the UK). This at the minute is an idea, as we are trying to see what our options are.
 
Sub Prime

Hi Samwise1,

Would Start consider an "Assisted Voluntary Sale" Pepper are offering this, although they are in the driving seat after buying the GE book at a huge discount. Would be worth a shot!
 
A few thoughts

1) If you are under no pressure from Start, then staying in the house seems like a good idea. The interest on the mortgage is around €12,000 a year. You are paying around €5,000 a year, so your mortgage is increasing by around €7,000 a year.

But so what? It does not look as if you will ever be in a position to pay it, so it doesn't really matter whether your negative equity is €130,000 or €137,000.

Over time, house prices might increase and eliminate your negative equity.

2) If Start agree to write off the shortfall, then an agreed sale might be the way to do. Then when you or your spouse start earning again, you will retain your savings rather than give them to Start Mortgages.

3) If you are planning on returning to the UK, you should defintely do an agreed sale first. It makes your bankruptcy a lot easier to deal with

4) If you are planning to stay here, go for an agreed sale. If Start don't agree to write off the shortfall, go for a one year Debt Settlement Arrangement.
 
A Debt Settlement Arrangement will normally have a term of five years. It could possibly be shorter than that where a PIP sucessfully proposes a dividend to creditors coming from the sale of assets rather than from income but I don't anything here to suggest that would be the case in this situation.
 
Hi DebtCert

The legislation says that the maximum term permitted is 5 years. But there is nothing to say that it could not be one year or one month. Obviously the creditors have to approve it.

But why would anyone go for a DSA of 5 years, when they could opt for 3 year bankruptcy.

In the current case where both parties are unemployed, there is nothing available for creditors, so it is pointless having a long term DSA.
 
I think that the legislation sets the maximum term of a DSA at 6 years and the usual term at 5 as I said earlier. I also noted, and you reiterate, that the term may be shorter. I would expect a shorter term to apply where assets are to be sold. I cannot see it being agreed purely on the basis that the applicants are not currently employed. The potential for abuse is too great and creditors will almost certainly be unwilling to write off unsecured debts while at the same time voluntarily waiving any claim against future income should the debtor subsequently gain employment. Why would any creditor agree to such a proposal?
 
DebtCert said:
Why would any creditor agree to such a proposal?
Click to expand...

Loads of reasons

You can't get blood out of a stone, so why spend a lot of time and money trying?

It costs the banks a lot of money and time to repossess a home. They might agree to write off debts in exchange for a voluntary surrender.

If the person has been in the MARP for a few years, why add 5 years to it?
 
Agreed that you can't get blood from a stone. You can, however, get repayments from someone who goes from unemployed to employed. My question was why agree to give up this possibility for no gain whatsoever?

The issues of home repossession, voluntary surrender and MARP do not arise in respect of a DSA which deals exclusively with unsecured debt.
 
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