They will not being doing writeoffs on family homes, but once the house is sold, what is left is unsecured debt, therefore they can do write downs on unsecured debt.
I believe thast they can ony chase you for 6 years on unsecured debt, but they can chase you for 12 years on secured.
If the bank will not let you sell the property then they can extract money from you for as long as they want.
I think you would be better off getting agreement to sell it, then either negotiating or defaulting on the unsecured debt.
So, it is my opinion, that you are better off converting your mortgage debt into an unsecured debt. If they ask you to sign some document accepting responsiblity for the shortfall, go right ahead. This does not increase your liabilities.
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Anyone any experience of attempting to negotiate potential shortfall prior to a sale? Is it worth talking to them? My bank refused saying they would only go this once an offer is made.
Also, On a purely ethical note, I think it would be very bad form to sign a document taking responsibility for the negative equity portion of your loan when you have no intention of doing anything of the sort.
Has our society become so screwed up that people are willing to lie at will and tell mistruths on legal documents as long as its in their own interests. If this is true and nobody can trust anyone else, then we're all doomed.
I know of a few cases where houses have been sold and the banks have soon afterwards obtained a judgment on the unsecured portion. It's really only the extreme and desperate cases that have any hope of write offs.
Make no mistake, secured or unsecured, banks will be fighting to get their money back regardless of what they say.
Bronte
I think you're giving terrible advice there, presumably unintentionally.
Accepting responsibility for the negative equity portion of the house in any written legal document is a very bad idea. Why on earth would you do that ??????
Recovering the negative equity portion of a distressed home loan puts the bank in a very weak position legally. Getting you to accept the negative equity portion of the loan
in a separate legal document helps to strengthen their hand and weakens yours. Don't do it or don't do it lightly.
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I still also cannot understand why buy to let investors are getting write downs left, right and centre yet those with just the one family home are unable to seem to secure any writedown.
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