No,the lender has never implied this, the adviser we spoke with did though on the basis that the lender would expect to 'get something' from a bankruptcy. The irony is, by repossessing, the income from which we currently pay the mortgage will be stopped.
A fellow Landlord was told by Mortgage Express that they wouldn't bother with repossession, they would apply for her bankruptcy.
As we all agreed previously, there is no logic in this repossession, it seems that maybe the incentive is there if a claim on indemnity insurance will realise some of the funds.

Managing timescales with my tenant is key for now, I can't guess what the lender will do other than repossess.

Shelter website has been a good resource re. understanding process and notices etc. When it comes to court outcomes, there is little information. Maybe it just varies on a case by case basis.
Does anyone know what notice period is given on any notice of ejection if that's granted by the court? i'm tempted to tell my tenant he can look to move after the Christmas period but wouldn't want him to still be in the property when eviction takes place!

My tenant has also been given notice of a court date for 20th Jan. I have spoken with a lawyer who advised we don't need to attend if we have no intention of contesting the repossession. She also suggested perhaps the lender will allow us to sell the property rather than have it empty and marketed as a forced sale. We have still to put this to the lender. Meantime, our tenant has written to say he would like the opportunity to buy the flat for £50k. I don't think it's something we can offer him now as it's about to belong to Lloyds. Selling for £50k would crystallise the loss at something in the region of £70k.
Should we even bother forwarding this offer to Lloyds?

I suppose you may as well, might be that the tenant will be able to go higher

Am I right in thinking it will make no difference to us if the tenant gets a bargain?

If the eventual shortfall sum is more/less won't impact on the amount allocated in a bankruptcy for this debt?

If you are going bankrupt then the size of the debt is of little consequence, unless you win the lottery or something whilst in the bankruptcy and end up having to clear the debts.
However the price achieved does matter to the secured lender as they will want to minimise their losses, so I'd imagine they will want to get as close to their valuation as possible.

That's what I thought Kevin-thanks!

Difficulty at the moment is the valuation is dependent on whether it's a market value- probably around £75k, forced sale value/auction value-maybe £65k or other value applied.

The average T.O.M (Time on market) for the property type in the postcode is around 230 days. The value may change in that time if unsold.

Our shortfall will comprise the original debt (not certain until it is converted to sterling) plus the fees, costs and management, marketing, insurance etc minus the selling price.

I'm trying to keep emotion out of the equation and just be practical. I have submitted a complaint of mis-selling with the broker but they are not responding to me. On balance, I feel the lender had little risk with a 30 year loan term and no arrears but still chooses to repossess. I am able to be happy for my tenant if he is able to buy it cheaply, he has after all been a perfect tenant for 6 and 1/2 years. From what you say though, he's likely to need to increase his offer.

update-spoke with lender yesterday-they are no longer willing to allow the equity position to remain as it is.
At current rates, we owe £12750 if converted to sterling-on the original borrowing 4 yrs ago of £63000

Our choice-
a)let repossession go ahead, certain loss for the lender and huge shortfall for us or
b) let them convert to sterling and go forward with huge negative equity.

Which way are you minded to go Pamjo?

We've been given the weekend to decide-court date being 20th January, there is no obvious choice. It seems crazy to go bankrupt without having had any spending spree first. LOL
On the other hand, it seems silly to take on this size of debt, continue existing payments in some hope that over the next 20 years the flat will double in value before interest rates rise to 3% plus when payments on £127500 would be unsustainable.

The worry is the unknown, we could probably manage a Trust Deed without this element but if we did that and the costs rose on a fixed sum during or after the trust deed, we'd be forced to hand back keys at that stage-is Bankruptcy possible after a trust deed?
What a mess -seemed like a good idea at the time!!

Hi Pamjo.

Historically interest rates average 5% to 6%. I'd think that over 20 years it's extremely likely that rates will go over 3% at some stage.

Nothing connected to a trust deed prevents you from becoming bankrupt later. Not ideal though if it can be avoided?

Exactly, for rental property, we have always used 6% in calculations pre purchase altho we bought our first home at 13.5%-fixed SVR then was 14.5%! It's very clear the only way is up, the only question is when.

Between the devil and the deep blue sea at present, could be we're just delaying the inevitable if we transfer to sterling and go forward with the larger debt. Otherwise, we can draw a line under it and accept the result of what seemed a good idea is bankruptcy, the only positive being it's over when it's over.

I am being called to court by a car finance company

Although I will be judged against I will go to court and make them jump through hoops to get their judgement.

I was advised to represent myself as the court will be tolerant of a non trained person and will carry proceedings on to a later date
This will give your tenant more time

You never know- the sheriff may rule against the finance company and throw a spanner in the works- pigs may fly aswell

It is better to have tried and failed rather than not to try

You have nothing to lose

Skintandfat

That's what I'd like to think I'd do but in reality, I wouldn't know where to start. I also expect courts to be intolerant of time-wasting ill-prepared self representation?

The lender (Lloyds) are clear that the possibility of repossession is covered in the terms and conditions accepted by us at the outset so I'm not optimistic we have any arguement there. The broker we feel has mis-sold in part as well as us not being well-informed re. the mechanics or the lack of regulation with this financial product. The broker has steadfastly refused to enter into correspondence, the initial advisor and their compliance and complaints department. Meanwhile, the action by the lender progresses through various stages and we are now sure our choices are repossession and certain shortfall or transfer currency and carry huge negative equity.