What would happen if my husband and i just walked away from our mortgage and debts? What's the process and?

Question

would we be able to rent a property or would we be blacklisted. Thanks in advance for answers!!

Answer 1

UK Advice

Firstly, there is absolutely no such thing as a blacklist - this is something that is invented by loan sharks and companies trying to sell you 'clean your credit file' services - pointless and unnecessary.

If you were to walk away from your debts, leave your home and ignore the mortgage - obviously at some stage, the mortgage company will repossess the house and your unsecured creditors will chase you for balances owed.

Repossession would remain on your credit file for 6 years from the point of entry.

Defaults and CCJs from your unsecured debts would remain on your credit file for 6 years from the point of entry.

Creditors will find you unless you're exceedingly clever and can avoid leaving any form of paper / electronic trail to your current address - and they will continue to chase for any outstanding money owed on the mortgage after they've sold your home (which they do quickly to raise capital - usually at a loss). CCJs can be made against you even if the creditor doesn't have your new address - a court judge will expect you to have updated your details with the creditor - which is reasonable, unless you are attempting to avoid your debts of course. So you may find you have CCJs without even knowing it because the paperwork never came to you.

With these things in mind, your credit rating will list all of these things for a period of 6 years from the point of entry, and therefore any potential landlord who does a credit check on you, will realise that you are a high credit risk - and may use this as part of their decision to rent their property to you - or not. Local Authorities won't have such concerns - unless you owe Council Tax of course.

Bankruptcy may well be a good option - but if you have a good income, the Official Receiver may take a portion of this from you for a period of 3 years in the form of a monthly payment which will then be distributed to your creditors.

Bankruptcy remains on your credit file for a period of 6 years too, but you will always have to declare the fact you went bankrupt for credit applications in the future above £750, applying for a mortgage or when asked (by an employer for example)

For help with your debts you could try:

http://www.payplan.com - Payplan

http://www.nationaldebtline.co.uk - NDL

http://www.adviceguide.org.uk - CAB

Hope this answers a few questions!

Best wishes

Peter

Answer 2

Your house would be repossessed and sold for a loss, and you would then owe all of the remainder, which they would then chase you for. You could try bankruptcy, but it is a hard road from there.

Answer 3

seriously...join the club.

I'm in the states, but look into renting your home out and moving into a smaller place. This way the rent you receive will cover most of or all of your mortgage. You will then be saving money by cheaper monthly housing payments so you can start catching up on bills. You can also consider both working a side job temporarily to get you out of the hole.

Other than the above, you may want to look into the different chapters of bankruptcy.

Good Luck....and remember...you're not the only one...AT ALL.

Answer 4

Actually this is done everyday - by companies that walk away from their creditors and debts. It's called liquidation and perfectly legal. But in their case they walk away and can start another company the same day - debt-free and apparently free to trade again. But for an individual, you will get a bad credit record and that will tell against you when you try and get credit or a mortgage. Many people have declared themselves bankrupt when things get too much for them.

Answer 5

If you walk away (and hand the keys over), your mortgage lender and other lenders who lent you money can persue you for up to 6 (and in some circumstances 12 years).

With regards to renting, it depends on if the letting agent / landlords carry out credit file checks. If they do, than they might say no. You do have several options available to you regarding your situation, and you should seek help before you the drastic step of walking out as you have nothing to lose.

Answer 6

You'd be blacklisted h**l join the club.