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Bankruptcy in US/ Mortgage in UK
Time for a bit of a vent, mostly at ourselves but here's the story (and reason for trying to get the 401k money in the thread below).
We bought our house in 2004/5 and instantly had problems. It was towards the top end of our price range. I didn't want it, honest, but was talked into it as it was a "great town, great schools......" all true "houses in this town always sell quickly...." not true! As I said it was on the verge of being too expensive but then the roof needed replacement and meant we had to spend a ton on new roof, kitchen reno and we needed other bits and pieces too. To cut a long story short it's now on the market for less than we paid before we did work on it but I had saved and put a lot of money down so we're about breaking even. Having said this my work transfer home is happening now, any renters would be paying less than our mortgage and the place doesn't look like selling even at the price it's at. We're going to go lower and are doing our best to get out of trouble, I am not trying to wheedle out of any debts but we are facing the prospect of giving our house back to the bank. If this happened and in the future we try for a mortgage again how much impact does it have in the UK? I'm guessing you have to disclose a previous bankruptcy but what is the best thing to do? Thanks in advance. |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by smarshall
(Post 8788076)
Hi, I am an Expat Mortgage Specialist in United Kingdom; I am a new member of this forum. Any British Expatriates and Foreign Nationals looking for UK and Overseas Mortgages can seek advice from me!
Post gone in 3.......2.........:lol: |
Re: Bankruptcy in US/ Mortgage in UK
Somebody must be on a tea break because the post is still here!
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Re: Bankruptcy in US/ Mortgage in UK
To the OP, well I was under the impression that is does not count in the UK, ( ducking in case of anything flying my way) only from what i have read on here, in the thread 50s 60s I do know there are a couple of people who had to just give back the keys.....couldnt sell couldnt stay....... many many of us here are in the same boat with regard to property, we paid $273.000 10 years ago, one sold 5 houses down the road, this week after being empty for 2 years exact same style with finished attic etc for 200,000 very sad indeed. We did not have much to put down just enough to get by...........I was like you got talked into it by my husband though, i had kinda given up by then.....
I am sure you will get advice soon from those who have been there done it...... |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by Pauljarv
(Post 8783743)
Time for a bit of a vent, mostly at ourselves but here's the story (and reason for trying to get the 401k money in the thread below).
We bought our house in 2004/5 and instantly had problems. It was towards the top end of our price range. I didn't want it, honest, but was talked into it as it was a "great town, great schools......" all true "houses in this town always sell quickly...." not true! As I said it was on the verge of being too expensive but then the roof needed replacement and meant we had to spend a ton on new roof, kitchen reno and we needed other bits and pieces too. To cut a long story short it's now on the market for less than we paid before we did work on it but I had saved and put a lot of money down so we're about breaking even. Having said this my work transfer home is happening now, any renters would be paying less than our mortgage and the place doesn't look like selling even at the price it's at. We're going to go lower and are doing our best to get out of trouble, I am not trying to wheedle out of any debts but we are facing the prospect of giving our house back to the bank. If this happened and in the future we try for a mortgage again how much impact does it have in the UK? I'm guessing you have to disclose a previous bankruptcy but what is the best thing to do? Thanks in advance. |
Re: Bankruptcy in US/ Mortgage in UK
Weird that the mortgage broker posted without answering the question :rofl:
Originally Posted by Pauljarv
(Post 8783743)
If this happened and in the future we try for a mortgage again how much impact does it have in the UK?
So I'd assume your walking away would hurt you with those lenders because your US credit history would be trashed. But I don't know what would happen if you rented for a few years, built up a UK credit history and then applied for a mortgage with a UK lender. They might not check your US credit history at all - it's worth asking an expert. |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by DDL
(Post 8788462)
Somebody must be on a tea break because the post is still here!
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Re: Bankruptcy in US/ Mortgage in UK
So can you really 'just hand back the keys' because seriously if our place hasn't sold by next spring I'd be happy to give it back to them. Wouldn't you still owe them, can't see how you could just walk away seems too easy.
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Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by the davis family
(Post 8788885)
So can you really 'just hand back the keys' because seriously if our place hasn't sold by next spring I'd be happy to give it back to them. Wouldn't you still owe them, can't see how you could just walk away seems too easy.
... if you do that, you still owe the debt in full and the bank can still pursue you for the difference on the sale. The only way around that is to either declare bankruptcy or make a formal, written arrangement with the bank to accept the sale of the property and in return, write-off your remaining debt. If your property is worth more than the mortgage, you need to price it realistically in order to sell it. If you owe more than your house is worth, then your next steps depend on what other assets and income you have. Get professional advice where you live. Back in the early 1990s, many British homes were repossessed (or the "keys handed in") and the borrowers did not either declare bankruptcy or make a formal arrangement with their creditors. As a result, the debts remained in place with interest and penalties piling up and then some years later, when people had got their lives together, the banks came after them for the outstanding debt. Bankruptcy, or the alternative of an arrangement with creditors, is never an ideal solution. Generally it leaves the individual with little or no assets, a bad credit record and can have consequences for one's employment in some occupations in future - but may still be preferable to a debt mountain that can never be paid off. |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by JAJ
(Post 8789032)
All this in detail depends on national/state/province laws that vary, but in general:
... if you do that, you still owe the debt in full and the bank can still pursue you for the difference on the sale. The only way around that is to either declare bankruptcy or make a formal, written arrangement with the bank to accept the sale of the property and in return, write-off your remaining debt. If your property is worth more than the mortgage, you need to price it realistically in order to sell it. If you owe more than your house is worth, then your next steps depend on what other assets and income you have. Get professional advice where you live. Back in the early 1990s, many British homes were repossessed (or the "keys handed in") and the borrowers did not either declare bankruptcy or make a formal arrangement with their creditors. As a result, the debts remained in place with interest and penalties piling up and then some years later, when people had got their lives together, the banks came after them for the outstanding debt. Bankruptcy, or the alternative of an arrangement with creditors, is never an ideal solution. Generally it leaves the individual with little or no assets, a bad credit record and can have consequences for one's employment in some occupations in future - but may still be preferable to a debt mountain that can never be paid off. |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by the davis family
(Post 8789211)
Thanks, just as I thought not quite as simple. We do have our place for sale realistically nothing selling here at moment, by next spring we could go lower and come out with basically nothing.
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Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by JAJ
(Post 8789212)
If "nothing is selling" then you have to ask is price realistic? Unless in a remote community where there may simply be no liquidity in the market, there is usually no such thing as "can't sell".
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Re: Bankruptcy in US/ Mortgage in UK
If you use Google, you should find a number of articles from reputable papers like the NY Times on the practice of "handing the keys back" to the bank, in situations where you owe more than the house is worth. Of course, "handing the keys back" is a somewhat metaphorial phrase (although some people literally do that).
The law varies from state to state. The law generally is more lenient in the US than the UK. There are companies in the States that for a relatively small sum will lead you through the legal paperwork to do this. |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by dunroving
(Post 8790111)
If you use Google, you should find a number of articles from reputable papers like the NY Times on the practice of "handing the keys back" to the bank, in situations where you owe more than the house is worth. Of course, "handing the keys back" is a somewhat metaphorial phrase (although some people literally do that).
The law varies from state to state. The law generally is more lenient in the US than the UK. There are companies in the States that for a relatively small sum will lead you through the legal paperwork to do this. |
Re: Bankruptcy in US/ Mortgage in UK
Originally Posted by the davis family
(Post 8790955)
I'm in Canada:D
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