Hi gillian2

I think to be safe, the Trustee could proceed with your husband's discharge, however remain in office as Trustee until the house is sold and the debt crystallises.

If he is aware of the existance of a contingent debt, then he has a responsibility to deal with it.

Mark

So if the trust deed did end then we would be left with the debt if the house hadn't been sold before then? I've said before about how bad his trustee is and if they could discharge him then they prob would and would northern rock just hang about and not sell the hosue then as they would know they could get the money out of him at the end of the td instead?

It's an interesting point and a slightly complex legal one. If the whole thing was discharged and then the house sold, then NR would have been excluded from the Trust deed and I think the actions of the Trustee would have to be questioned.

Mark

Oh crikey that's pretty worrying then as we could be waiting a while to get a house form the council so say if it takes a year then there would only be say 8/9mths left on the extension and I dont know in this climate how quickly northern rock would look to sell the hosue and if it would be done as quickly as that. In that case we could be back to square one again with debt as I reckon the house wouldn't sell for more than £65k and there's £98k on the mortgage. Scary.

Sorry I meant to say thanks Mark!! Excuse my manners please!

Hi Gillian

No probs at all I'm sure it will be fine as the onus falls to the Trustee to do the right thing.

Mark

Hi Mark,

Mu husband wrote to teh trustee to ask the question and they have just replied saying that if we surrendered the house now and it wasn't sold until after the trust deed ended then we would be left with the short fall 🙁 They said that it wouldn't be their responsibility after the end of the trust deed.

Now we are back at square one whether to give up the house or not. We can't afford to go on living here but if we moved to council rented then the trustee has said we will have more disposable income so they would want more money and the extension of the trust deed would then be cut from 2yrs to possibly 1 which doesn't leave alot of time for the house to be sold and we could end up with the debt of the hosue being sold if NR waited until the trust deed ended.

I just can't believe that they have said it's not their responsibility. The biggest mistake we ever made was going through this trust deed company, they have been rotten from the start.

Hi gillianr2

If you hand the property back and this is formally repossessed by NR then I do not see how your trustee can conclude the Trust Deed knowing that there is a contingent debt. I think, as I said earlier in my post, that NR would possibly have a claim against the Trustee for excluding them from the dividend.

Mark

Thanks Mark. Yeah it's pretty bad of them in my opinion to say they would just end the trust deed and leave us tod eal with the debt if it wasn't sold until after the trust deed ended. Is there anything we could do about it if that did happen or would we indeed be left with it if the trustee said they weren't taking anythign to do with it?

Hi Gillianr2

Forgive my laziness in not looking through prior posts!

Did you look into the possibility of renting your house to someone else until it is viable to sell, ie get past the period of negative equity however long it may end up being? It will depend a lot on geography and your interest/ability in managing the lets as well as the finances-is it able to generate enough rent to cover the mortgage commitment plus costs?

Yeah we originally looked at that but we wouldn't get enough to cover the mortgage. The house is in major disrepair needing a new roof, windows and full of damp so we couldn't afford to fix it all anyway for rental, hence one of the reasons we are looking to voluntarily surrender the house instead. When we originally spoke to NR a while back they were against allowing us to rent it aswell. Thanks though xx

I did go back to your earlier posts-sorry!

Hi gillianr2

Sorry for the delay in getting back.

If I was dealing with your case, it would be simple. The house has major issues, it is a contingent debt, hand it back and NR would be a creditor. Simple with no confusion.

In the circumstances described, I don't see how the Trustee could proceed to close the case if the hose was repossessed. It is a debt after all. If this was ongoing and he made the decision to close the case, i think liability would fall on them. His option therefore is to close tghe case earely and seek discharge. Again, I dont think there would be justification in this that could stand any scrutiny.

I'm amazed ( or perhaps not) at the stance they have adopted and if it was me, I would write, Recorded Delivery, and advise that due to damp/health issues etc, you will be vacating the house. You ( husband) will be maintaining the contribution and possibly increase this if the rent is lower and you would expect any shortfall to be a contingent debt to fall as a claim in the Trust Deed. I would copy in NR to this.

Belts and braces!

Mark

I agree with Mark, it is a you should just take control and advise all parties of your intentions regarding the property. You have then done all you can do. It is up to your trustee to deal with Northern Rock and vice-versa after that.

Northern Rock would need to either realise their security or place a value on their security in order to claim a dividend from the trust deed based on the remaining shortfall. If they do not so this then they are choosing to rely on their security alone and cannot complain about not receiving any dividend from the trust deed if it ends before the shortfall crystallises.

Either way, Northern Rock have no right to pursue you for the shortfall regardless of whether your trust deed ends before the property is sold or not. Full stop!