Hi gillianr2.

I do hope that the response that you receive is positive.

They cannot stop you from ceasing to pay the mortgage, handing back the keys and moving into a new home.

However if you were to do this in contravention of their instruction or advice it could result in the trust deed being terminated for non-compliance. This could result in your husband being bankrupted or your Trustee resigning from the case (which would leave your husband with the original debts and the shortfall).

Your husband would be able to go bankrupt to deal with his debts if the Trustee resigned. I'm not sure how long his trust deed has been running for, but one negative side of becoming bankrupt might be that, if affordable, payments for three years would commence again.

I wondered what would happen if we voluntarily handed the keys back even if his trustee said they don't agree. My husband actually wishes he had just gone down the bankruptancy route in the first place but at the time nobody had begun to take action against him so the trustee basically said he had 2 choices, DAS or trust deed. He tried the das route for a few months before deciding on the trust deed. We did ask the trustee st the beginning of the year if he could be ,made bankrupt but he was just told no and they had no intentions of making him bankrupt as he would still have to make payments anyway but the payments aren't the problem, it's the trustee company we don't want to be under anymore, they are so unhelpful. My husband is going to have to extend his trust deed anyway for 2yrs for equity in a car so still has 3yrs to run on the trust deed so 3yrs payments on banruptcy wouldn't be too worrysome. He missed 3 payments last year for things like our washing machine broke and needed replacing so his payments have been put up to cover this and the company said anymore more missed payments and they wouldn't hesitate in signing off as his trustee and leaving him with all the debts (this is the actual way she put it, which felt quite threatening to be honest). Is there anyway around all this mess?

I meant to also mention that the equity in the car that my husband did have has since been sold as we needed a bigger sized car (we now have 4 children and not 2 like we did when he signed the td). There wasn't any money made out of it but the car we know have is now worth less than half what they say we owe in equity. The td company recently wrote and asked how my husband was going to free up the money for the creditors and said they might have to sell the car but the car isn't worth nearly enough and my husband needs it for work as there is no public transport to his place of work and we also live in a small village so can't rely on public transport, they then suggested they may be able to extend the td by 24mths so that would mean the td will have been being paid for 5yrs all in. The new car is also registered in my name not my husbands as we thought it would be better as I get cheaper insurance than him. Can they still make him sell it if it is now in my name? If he was to try and be made bankrupt would they take the car in to consideration if it's registered in my name? It's worth about £2700 and the td want £5400.

wow Gillianr2

You have so much going on, it makes it hard for you to make a decision. I think you should sit and consider what you really want as a family. If you want to move, then move. The shortfall will fall into the Trust Deed, and if the Trustee does discharge himself without discharging your husband from his debts, then bankruptcy would not be that bad. As you say, he is going to have to pay for a further 2 years anyway! The legislation changed in Nov 2010, and now cars valued at less than £3,000 are exempt if required for work etc, therefore your car would be fine. As TDA says no one can stop you from moving, it just depends on their response which road you take from there.

Thanks Shona. I did ask the manager about us selling the house and moving a while back but she was very wishy washy about it and said this:

"Unfortunately I cant advise you to sell your home, I really couldn't comment as there will be a shortfall to the secured lender. I doubt if Northern Rock will agree to you selling the property on the basis that they will incur a shortfall. If the property is sold and there is a shortfall due to a secured lender then ultimately their shortfall then ranks as an ordinary creditor and they would receive a dividend. This will obviously increase the level of debt and should your husband have a higher surplus each month by moving this would be taken into account and his payments towards the TD may increase."

I understand having to pay more if the rent is less but she didn't really give an answer of whether the trustee would ctually allow us to sell.

If the trustee did sign off as his trustee and he was left with all the debt again then how could he go down the route of bankruptcy as his trustee has already said this to me too when I asked in the same email about moving last year:

"Sequestration (Bankruptcy) isn't an option for your husband, as he is in full time employment he would be required to make a monthly contribution, which will last for a further three years and wont take into account what has been paid so far. If he couldn't come to an agreement, with his Trustee, what he can pay then the sheriff at the court would fix the amount. Should he default on this he will be in breach of a court order which may lead to a fine, imprisonment or both. The Trustee can also force the sale of his car and they will review the value and redemption figure due on your property again, so any equity in the property would also need to be realised. Sequestration is something which should be avoided where possible. As your husband is in a Protected Trust Deed he cannot petition for his own Sequestration, it would need to be us."

That quote scared the living daylights out of us and we never asked again about bankruptcy as she mentioned prison ect.

Hi gillianr2.

The frightening aspects of that answer only really relate to the consequences of failing to comply with the Trustee if your husband were to become bankrupt.

As there is no equity in the property and the car is worth less than the £3000 threshold neither seem to be an issue.

If the current Trustee were to resign it would be straightforward for your husband to become bankrupt if he chose to.

If you are set on moving away from your home perhaps you should write to your Trustee and ask specifically:

1 - What they would choose to do if the mortgage lender were to allow the sale of the home which then created a shortfall.

2 - What they would choose to do if the mortgage lender refused to consent to the sale, you stopped paying the mortgage, and handed the property back to the mortgage lender.

Thank you. We are awaiting a letter in reply to my husbands email where he asked about selling the house, I am getting myself all wound up really without knowing what they are going to say!

So if both say no then we can still surrender the house and then he can go bankrupt if he needs to? he wont go to court or get in to trouble?

From the information you've provided us with it's hard to see how this could turn into the kind of legal issue that I think you may be worried about gillianr2.

As mentioned before the Trustee might allow the shortfall to be entered into the trust deed, might resign from the case, or might seek to bankrupt your husband if this happened.

A mortgage lender faced with a vacant property and nobody paying the mortgage is likely to take possession and seek to sell it. They will then (but perhaps not immediately) seek to collect on any shortfall.