What would you do?

A question about : What would you do?

Hi,

I am looking for some advice please. I am unsure of the best course of action for our current circumstances and I am worried dilly dallying will leave us with fewer options. Here it is...

I partner and I have had one of our houses repossessed. It was a buy to let and was handed over to an LPA reciever when we had Ј700 of arrears. They stated our poor payment history as the reason for this. I offered to pay the arrears in full but they wanted all of the Ј5K fees that had been added over the previous 8 years and threy wanted them within 3 days. Obviously we couldn't pay. The reciever didn't collect any rent from the tenant, gave him notice and handed possession back to the lender. It is currently on the market for Ј40K less than we owe. They have not taken good pics and the listing appears to show all of the bad bits so I am not hopeful of a sale. It will probably go for much less than that.

We have another house that we rent out, it has about Ј20K of equity. We also have our home that we live in, with about Ј10K of equity. We have no other assets.

We have about Ј25K of unsecured debt and owe family a further Ј25K.

I am worried that when the house sells the lender will force us to sell our other houses to recover the Ј40K plus shortfall and we will have no chance of repaying our family and have nowhere to live. Can they do that?

I would like to pay all of my debts and we have been chipping away at them but I would rather pay my family back than allow the lender to force us to sell everything and take our money because we owed Ј700 on the mortgage. There is no doubt we made a bad investment and things have not worked out as we would like but we want to try to make the best of our situation.

I don't know what to do for the best! I am wondering whether we should sell our other house and use any money to pay our family back, or wait and see how it plays out. What would happen to our house?

My question is what would you do? Please no moral judgement!

Thanks

K

Best answers:

• As I see it, the only way the mortgagor could compel the sale of your other two properties, would be to petition your bankruptcies.....as once the property sells, the shortfall will be an unsecured debt.
  They would then have to share the bankruptcy estate with the Official Receiver [BAnkruptcy charges]...and every other unsecured creditor you may have.
  Were both you & your partner jointly on the mortgages?
  With a repossession on your records, acquiring a new mortgage in the future might prove quite difficult.
  So you may find yourselves having to rely upon the rental market too.
  Selling up to pay family may well prove awkward...what will be done to deal with the other debts?
  [As this is a bankruptcy forum, I will add, paying one creditor more favourably compared to others is a no-no with regards to Bankruptcy...and can be reversed as soon as it comes to light.]
  There are various options open to you, contacting NDL or Stepchange is a start.
  Or, to get an idea about the different debt remedies available, why not see below?
  https://debtcamel.co.uk/
• Thanks for the reply...the mess is all joint! Both our names on all of our debt. I will contact Stepchage tomorrow.