Also. My eldest is going up to high school this year. I keep thinking that sharing a room with his sister is ok for now but the pressure to have his own room will build once he's at high school and its likely that ill take the action to hand the keys back at some point during the next three years of my trust deed anyway.....so im thinking is it just better to get on and do it now if im lilely to do it at some point anyway? Would the defaults be registered and dated from when i hand the keys back or from when i signed the trust deed. Am i actually making things worse for everyone by just hanging about here and pretending itll be alright when it clearly isnt going to be longer term.

I also keep thinking about the insecurity of rented accom. I feel quite safe having my ow place. what happens if i do get rented accom now and the landlord doesnt renew the lease in a years time and i then cant get another place because i fail credit checks etc? Eek!

Generally if you handed back the keys and the property was sold, then any shortfall would be a claim in the trust deed, so they would be unable to pursue you for the shortfall. If this was your intention you should speak with your trustee to explain the position.

If you are seeking alternative accommodation, then any credit check will show defaults/trust deed, so this will cause a problem as will retaining money to save for a deposit unfortunately.

Mark

Hi Thinkingofthefuture,

As Mark has said, should you decide that your current situation isn't manageable and decide to hand the keys back the shortfall to the secured lender will be ingathered into your Trust Deed. Best to speak with your Trustee to advise them of your situation and see what they say.

If you were to give up your property, would you be able to afford to move into rented accommodation? Sometimes a mortgage payment can be cheaper and you need to be sure that you could afford the rental payment.

I would look into how much per month renting a property would cost you based on your future needs with the kids. If your prepared to relocate to a different area the you may find more rental properties available. Most tenancy agreements are for a 6 monthly basis. You could enquire with the landlord or letting agency if the owner has any future plans for the property or if it's purely for rental income. I think you should be able to secure rented accommodation although it might be a little harder and you might not have a range of properties to choose from.

If you were made redundant and struggled to find another job, you may face the possibility of being made homeless if you were unable to support the mortgage payment. This could possibly aid you with an application to the local authority for housing instead of privately renting.

As for purchasing a property in the future, I think this will be difficult due to your credit rating.

I think your very brave to be asking these types of questions and really thinking about your future needs and trying to deal with things head on.

Many thanks for the replies.

David mentioned about my ongoing inability to gain a mortgage in the future. I'm still not clear on this situation. If I were to surrender my property and cease to pay the mortgage and secured loan, would these 2 credit accounts show default from now and thereafter be removed in 6 years time from my credit file much in the same way as unsecured credit accounts do? Therefore, in 6 years time there would be no reference to this having happened and I should then be clear ( assuming my credit file at that point was clean etc ) to obtain another mortgage? Or is it the case that having surrendered a property in this manner will live with me forever somehow?

I just don't want to take action now that may hinder me forever, however I would be comfortable with a 6 year period given I will be spending the next 3 years paying off my trust deed and it will likely take a further 3 years to then raise sufficient funds for a deposit for a new property / mortgage.

In relation to the projected returns to creditors. My understanding is that my trustee has submitted proposals to my creditors, outlining projected returns based on the total debts & in relation to the projected in-gathered funds from my contributions each month. My creditors have accepted these proposals and my trust deed has become protected. If I were to surrender my property, then the total debt figure would greatly increase and, as a result, the projected returns to each creditor would significantly reduce. Will this cause my protected trust deed status to be in jeopardy? Do the creditors have a right to object given the returns value to each will reduce?

Also. Am I missing any other implications of surrendering the property? Is it possible that anything else could happen that I have not considered? I briefly ran it passed my trustee and they generally said the same as the comments on here, however did mention that I may wish to gain some legal advice? I don't really know why this would be required or what legal advice I should be seeking? Perhaps I will go back to my trustee again to find out on this point.

I just want to do what's best for everyone. My kids, me, my trustee, my creditors. I don't want to take action without first understanding the consequences of any action & then considering all options before making any decisions.

Thanks everyone.

Hi, we did the same thing last year. My husbands mortgage was with Northern Rock. He did a voluntary surrender where he called them and asked to hand the keys back. They then sent paperwork for him from a laywer that requested he sign it and the trustee also had to sign it to say the shortfall would be included in the trust deed. It's honestly one of the bets things we have ever done, we were cramped and really struggling to pay a mortgage on a damp ridden house that was affecting all of our healths. We are now in rented and also qualify for help towards the cost of the rent. We didn't feel the need to get legal advice first as we were made fully aware of what we were doing by northern rocks layers (who were actually fantastic and a great source of help/knowledge to us). It is a really big step to take but one that was so worth it in our case. I would say though to be prepared to have a guarentor for renting, it's very unlikely an agent will take you on without one as your credit file wont look great so unless you would be looking to rent privately through someone you know you will need a guarentor. Good luck.

I believe that to be the case regarding your credit file in relation to the mortgage and secured loan. It won't remain with you forever and should fall off after a period of time i.e. 6 years.

If you are able to save a suitable deposit to give the lender reassurance that the risk involved in lending to you is minimal even with a poor credit rating then you may be able to secure a mortgage. I would advise though that even if you have a ÔÇ£cleanÔÇØ credit file with nothing on it, this can still have an impact on your credit file. I understand that lenders like for you to have a little bit of history in terms of previous credit agreements so they can see that your capable of borrowing and paying it back.

Other users of the forum have posted previously about successfully completing a Trust Deed and managing to secure a mortgage afterwards so it is possible.

Including the mortgage and secured loan will not have an impact on your Trust Deed. I've handled numerous cases similar to yours in which a property has been repossessed for one reason or another. As you would be increasing your level of debt in your Trust Deed your Trustee could request an increase in your payments to try and compensate for the increased debt and reduced dividend to creditors which was proposed at the outset.

Allowing the property to be repossessed is straight forward but for that to happen and it to be sold on can take some time. It's a big decision but not something to be worried about and your Trustee should be able to assist you in doing this.

Thanks again David. I'm certainly getting toward fully understanding this now, which is great!. One last query ( hopefully )... What would happen if I surrendered the property & it wasn't sold by the time the Trust Deed ended? So the shortfall debt wasn't calculated until after discharge? Would I be responsible for this debt after discharge?

Thanks again everyone.

No you wouldn't be responsible for the shortfall if this were to happen, it would be included in your Trust Deed.