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Topic starter
09/04/2015 6:49 pm
Hi there - I'll try keep this as brief as possible! My husband and I own our flat - we bought it 6 years ago on shared equity and it's currently in negative equity. Our 2 year old son is severely disabled and as he gets bigger - our property is becoming more and more unsuitable for him (it can't be modified or extended). We have paid our 3 years TD and are currently paying off the arrears I incurred while I was off work with my son. We desperately want to move house to a more suitable property and so far the best solution would be a housing association house. In my current situation would it be possible to sell my property and add the mortgage shortfall to my TD?
Any advice appreciated. Thanks x
09/04/2015 7:33 pm
Hi Cherryblossom1308
Yes, the debt ( mortgage )existed at the time you signed the Trust Deed and can be included. Its called a contingent debt as it can't be quantified until something happens like a repossession and sale. Any shortfall would then fall to become a claim in the trust deed.
It would be wise to advise your trustee of your intentions.
I hope this helps.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
09/04/2015 7:38 pm
I guess it would effectively be impossible to sell the property without the consent of the trustee at this stage though?
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
09/04/2015 7:50 pm
Hi TDA
Sorry I should have expanded my reply. I think even with the Trustee's consent, the mortgage company are unlikely to accept an offer of purchase where the mortgage is not sufficient to clear the mortgage in full.
It's one of those crazy scenarios where the options are to market and achieve the best price or walk away and force it to be repossessed and sold resulting in a bigger shortfall. In my experience they always, without fail, go for the 2nd.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
09/04/2015 8:21 pm
Thank you for your replies. Can you explain what you mean by an "offer" of purchase? I'm planning on discussing this with my trustee soon.
09/04/2015 8:46 pm
Mark is just referring to an offer that may come in from someone wishing to buy your house. If it is less than that required to repay the mortgage then the lender may not consent to the sale going ahead.
The other problem you might have is that even if you were able to sell then the shortfall going into the Trust Deed would mean that other creditors are likely to be getting less as a result than they were originally proposed - because the money in the pot would have to be shared between more debts.
In order to protect their position your trustee may insist that you pay into your Trust Deed longer to compensate.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
09/04/2015 8:46 pm
Sorry. If you market the property for sale and a viewer makes an offer to purchase the property then this can be accepted by you, but the mortgage company would need to agree to conclude the sale to allow the sale to proceed.
As an example, your property is on the market at offes over £100k and you get an offer of £105k then it appears fine. However if your mortgage balance is £115k then there will not be enough to pay the mortgage in full and it's unlikely the mortgage company will agree to the sale due to the shortfall.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
09/04/2015 9:25 pm
Thank you for your replies. Can you explain what you mean by an "offer" of purchase? I'm planning on discussing this with my trustee soon.
09/04/2015 9:36 pm
I'm not sure if this was a double post, but an offer of purchase is when someone makes an offer to buy your home through their solicitor.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
09/04/2015 9:37 pm
Thanks again for clarifying this. I'll arrange to speak with my lender also and see what our options are (if any). It's frustrating as we can comfortably afford our mortgage payments and we've never been in arrears. And now I'm back at work ive no problems continuing to pay my TD arrears. We'd even consider a property worth less than our current home (our flat is considered a luxury flat) - as long as it makes life a bit easier with our son.
