Voluntary Reposession

A question about : Voluntary Reposession

Following my posts in IVA board, my friend has now decided to go thr bankruptcy route having checked with HR it won't affect his job.

He wants to hand his house to the mortgage company (Kensington) and add the negative shortfall to the BR which will be about 20-25k.

The plan is then to move into rented accommodation. He has no other large assetts. His car is worth about 1500 but needs it for work and hosp appts. Will this be a good reason to be allowed to hang on to it?

Anyone handed the keys back that could tell us of any pitfalls he may be missing pleasE?

Best answers:

• I dont know much about bankruptcy but we handed our keys back when we knew there would be negative equity and it was the best thing we could have done. the house was sold by the mortgage company and we had the final settlement figure within 6 months and when they sent the statement there were no outrageous fees added. it worked out better for us than others who were selling on the street at the same time.
  HTH
• I posted the keys back to ym mortgage company recorded delivery, they sent a form to be filled in but as per previous advice DO NOT sign anything or fill in any forms from the mortgage company, be prepared for phone calls chasing payment, letters threatening all sorts of nasties but if the final shortfall is going into BR they are all hollow threats.
  IMHO stop paying the mortgage, use the saved money to move into rented and BR fees, it will be at least three months before the mortgage company really start to chase and at that point post the keys back, ignore all pleadings from them, just let nature take its course over the re-possession, when the final statement arrives from the mortgage company you either go BR at that point or if already BR tell them your BR number, the contact at the OR and they should leave you alone, if they don't tell the OR's office.
  When you leave the house you are handing back turn off the gas, electric and water, take final readings and cancel the accounts, you will have to continue to pay buildings insurance and council tax until the mortgage company take formal possession, although some councils will give you a rebate.
  The final bill from the mortgage company will probably have lots of "extras" added (dont worry as included in BR anyway)
  so if you need to leave rubbish behind you can, but take everything you need from the property that is not part of the building, light bulbs, carpets etc!
• He has a property he can move into from 21st November and has stopped mortgage payments as from the beginning of November along with the IVA and intends to phone both tomorrow and tell them of the situation/plan of action. Thanks for people's views and advice, it really does help
• He has phoned the mortgage company today and has to call again tomorrow to go through an SOA with them. Can he refuse to do this? He doesn't want help from them, he just wants to give the keys back!
• He is today sending a recorded delivery letter telling them he is intending to go BR and is handing back the house. How long do you think it will be before they contact again?
• When I did this, it was about 4 or 5 weeks until they got in touch. I had moved out but had a friend gather the mail about a month later (kept a spare key ) and there was a letter from them, I'm sure it was dated exactly 31 days later (1 sent it 1st may and it was dated 1st June I'm sure)
  I put in the letter that I was giving back the house and would not be responsible for any shortfall as would be going BR anyway but after that it took about 6 months for the house to be sold.
  Incidentally I was told afterwards that I didn't need to physically send the keys back as they would just get a locksmith anyway. But I did like to do it as it was quite symbolic for me. Also as advised above I didn't sign anything.
  I did turn off the water, electricity and gas as well. Not sure why!!
• You must take last readings and inform utilities and turn off things as you will be responsible for any bills that are run up after the BR if the house hasn't been repo'd.yet. Take photo's of the last meter readings with an phone and email them to yourself the same day you phone the utilities for final bill, so you have double proof with dates on.