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Voluntary Surrender of property

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  • 06-01-2013 12:51pm
    #1
    sept09baby
    Registered Users Posts: 689 ✭✭✭


    Was talking to an advisor yesterday and came away thinking the best option for me would be a voluntary surrender of my house/handing the keys back.

    The gist is bought in 2006, currently about €170k in negative equity. Myself and my husband have separated and I am living in a small village with no family etc nearby. I work and have a young child and it's just not manageable any more. I'm trapped here and life is total misery for me and my child. There is no rental market

    I'm not looking to run away from them debt - I know I'll still be liable for the amount the bank don't recover. The lady I spoke to yesterday suggested that if I rented somewhere I could offer to initially pay €200 a month off the outstanding mortgage. Then when other debts are cleared in a few years I could increase the payments.

    I just want to know if anyone here has done this, is there anywhere I could get more information etc


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    #2
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Have you at least explored the rental market? Weak as it might be in your area, its definitely worth a try, and a far better option than just handing back the keys to the bank.


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    #3
    Procrastastudy
    Closed Accounts Posts: 6,224 ✭✭✭Procrastastudy


    sept09baby wrote: »
    Was talking to an advisor yesterday and came away thinking the best option for me would be a voluntary surrender of my house/handing the keys back.

    The gist is bought in 2006, currently about €170k in negative equity. Myself and my husband have separated and I am living in a small village with no family etc nearby. I work and have a young child and it's just not manageable any more. I'm trapped here and life is total misery for me and my child. There is no rental market

    I'm not looking to run away from them debt - I know I'll still be liable for the amount the bank don't recover. The lady I spoke to yesterday suggested that if I rented somewhere I could offer to initially pay €200 a month off the outstanding mortgage. Then when other debts are cleared in a few years I could increase the payments.

    I just want to know if anyone here has done this, is there anywhere I could get more information etc

    The current organisations (New beginnings being one) are now charging a fee for their services due to the massive demand. I personally don't see what handing the keys back gets you a repossession wont - but I am more than open to correction on that point. The bank will be in a similar position to you - I'd follow the advice you've been given - rent it out for what you can and pass that money on to the bank. Obviously you need to discuss it with them first but I'd be playing relatively polite hard ball with them in all honesty.

    EDIT: You've the added dimension of a separation - you really need to seek legal advice.


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    #4
    sept09baby
    Registered Users Posts: 689 ✭✭✭sept09baby


    Yeah have looked at the rental market but it's non existent. Estate agent advised that even if we could find a tennant we'd be lucky to get 40% of the mortgage covered in this manner. When you add in tax implications, ongoing maintenance, loss of TRS etc we'd come out with nothing which would mean we'd be paying the full mortgage and rent and that's just not viable.


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    #5
    MOC1972
    Registered Users Posts: 84 ✭✭MOC1972


    Procrastastudy wrote: »
    The current organisations (New beginnings being one) are now charging a fee for their services due to the massive demand. I personally don't see what handing the keys back gets you a repossession wont - but I am more than open to correction on that point. The bank will be in a similar position to you - I'd follow the advice you've been given - rent it out for what you can and pass that money on to the bank. Obviously you need to discuss it with them first but I'd be playing relatively polite hard ball with them in all honesty.

    Good advice above if you hand back the keys what's to stop the bank having a fire sale unload the house and you are stuck with the loss.
    Try renting it out.


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    #6
    the_syco
    Registered Users Posts: 37,300 ✭✭✭✭the_syco


    sept09baby wrote: »
    The gist is bought in 2006, currently about €170k in negative equity. Myself and my husband have separated
    If you owe €170k, and bank sells it for €50k, you'll still owe the bank the €120k balance.

    Was the house bought 50-50 with the ex? If so, he'll owe a percentage as well. Get LEGAL advice, as the "advisor" sounds like an Estate Agent looking for another house to sell.


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    #7
    sept09baby
    Registered Users Posts: 689 ✭✭✭sept09baby


    I'm aware we'll still owe the money and spoke to the ex yesterday to tell him I was considering it. We owe 264k - would be lucky to get 95k for it

    The advisor works with a different bank and deals with problem mortgages etc. She said that she's not able to advise her own clients to do it but in some cases it's the best solution for people to regain some sort of quality of life etc. Again she recommended I research it more and get independant advice - she isn't going to get any business out of the situation.

    I'll be speaking to a solicitor this week - have had a few recommendations so just need to decide which to go with. Was really just interested if anyone here has been through it. I only know one person who has done it but they were in different circumstances and going to emigrate.


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    #8
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    The most important thing is your child. House / paying back mortgage is secondary. What is your income etc ? Do you have other assets. If its a hopeless case then the bank should see that and work with you. But thats a large negative equity to have if there is no rental market. Its only money and you shouldn't let it dominate the rest of your life. There are options that you can take it would be best to speak with an independent financial adviser and also a solicitor with regards to your ex partners share.


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    #9
    NIMAN
    Registered Users Posts: 33,610 ✭✭✭✭NIMAN


    When you say its 'not manageable any more' do you mean that you can no longer afford to make the repayments on the mortgage or that you would prefer to pack it all in and move out?

    If its the latter then the bank may just see it as a case of "can pay but won't pay" and may not be as understanding.

    Good luck with whatever you do anyway, its a difficult position to be in.


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    #10
    sept09baby
    Registered Users Posts: 689 ✭✭✭sept09baby


    NIMAN wrote: »
    When you say its 'not manageable any more' do you mean that you can no longer afford to make the repayments on the mortgage or that you would prefer to pack it all in and move out?

    It's both really. After the mortgage, loan, childcare and utilities are paid I literally have nothing left. It's a struggle to find money for petrol, groceries etc and up to now I've been making do and borrowing from family etc. There are loads of issues with the house (plumbing & electrics) that I can't afford to fix. The bath needs to be replaced, the washing machine doesn't work and the list goes on and on. I just don't have a penny spare to even consider it.

    Then when you add in being on your own with a child, working and commuting and being far away from everyone the isolation would drive you over the edge. I've tried to do it all but I just can't cope


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    #11
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    sept09baby wrote: »
    It's both really. After the mortgage, loan, childcare and utilities are paid I literally have nothing left. It's a struggle to find money for petrol, groceries etc and up to now I've been making do and borrowing from family etc. There are loads of issues with the house (plumbing & electrics) that I can't afford to fix. The bath needs to be replaced, the washing machine doesn't work and the list goes on and on. I just don't have a penny spare to even consider it.

    Then when you add in being on your own with a child, working and commuting and being far away from everyone the isolation would drive you over the edge. I've tried to do it all but I just can't cope

    I think this is the crux of your issue. The way the banks look at what you describe is that you would fit into the category of can afford. They dont care if that means it's beans on toast and no social life.

    Harsh but thats it unfortunatly. defo also sounds like its worth strongly pusing for a term increase or interest only on the mortgage for a while. Your clearly somebody the banks should be doing eveything to work with as their is light at the end of the tunnel for you if an intelligent amicable deal can be down with your lender.

    By the sounds of your situation Id think getting an Au Pair in might be a good idea. By all accounts its cheaper than childcare so might free up some cash for you. Every little counts.

    id also strongly suggest pursuing a term increase or interest only. There is light at the end of the tunnel in your situation and the bank should be aware of this and try and work with you to both your benefits.

    Good luck with how it turns out.


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