www.iva.co.uk

Hi Guys,

I have read a few posts about fellow forum-ites who have handed back houses to the mortgage provider? Do they add extra charges, penalties if his happens? How does this work?
I have a property to sell from a failed marriage, little or no equity to be had and put towards debts so looking at cutting my losses and just starting a fresh by renting a little ol place for one before my IVA gets underway.
(apologies - dont get me wrong - I want to pay all my debts off and treat all creditors fairly, just want to get rid of the past and start a fresh.)

Sorry for too many questions (very early!)
Thx for all advice and support so far, very appreciated.[|)]

The mortgage company will add whatever charges they are entitled to under the terms of the mortgage contract in the event that you hand the keys back - and this usually comprises of insurance premiums, security costs and eventual costs of sale, as well as unpaid interest until the time of sale.

Another charge that could be added would be any shortfall between the sale price and the total owed to the mortgage company.

The mortgage company does have a responsibility to act with due care in the sale of the property (and has an interest in doing so) but with the state of the property market currently any lender would be looking to dispose of the property with relative haste in case values continue to trend downwards.

This could result in a larger shortfall than if the property were sold by the owner. Not such an issue if you are definately going into an IVA, but if there were any doubt about the IVA this should be a factor to consider.