Dealing with property debt. Should I hand back the keys?
At Negative Equity NI, we help clients who have found themselves struggling with tens of thousands of pounds of unaffordable property debt. Many of our clients have been struggling with their debts for some time and often ask us if they would be better to simply hand back the keys to the bank.
While it’s understandable that this might feel like your only option, it will still leave you owing the outstanding balance of the mortgage, potentially thousands of pounds of debt that will continue to affect your finances for years to come.
At Negative Equity NI, we offer debt solutions for our clients to deal with their unaffordable property debt.
| How can we help?
There are a number of possible solutions we can offer to resolve your property debt problems, depending on your circumstances, but for many of our clients a sale and settlement is the only solution to their problem.
This approach, also known as an informal, involves the borrower selling the property and our team negotiating with the lender to write off as much of the shortfall from the sale as possible. Our client will then have an agreed, affordable amount to repay either in instalments or as a single lump sum payment depending on what makes the most financial sense for them.
In other cases, an individual voluntary arrangement (IVA) is the best option. An IVA is a legal agreement between you and your creditors. We would consider an IVA in cases where a borrower owes money to multiple creditors.
Most, though not all, types of debt can be included in an IVA, including mortgage debt, credit card debt, unpaid council tax or money owed to HMRC. An IVA might also be worth discussing if you own multiple properties with mortgages from different lenders, or you have unsecured debt from several creditors.
Once a settlement is agreed with your lenders it can be paid as a five year payment plan, known as a contribution IVA, or, if you can afford it, as a single lump sum.
Restructuring your mortgage is an option that we might pursue with clients who are struggling financially due to unexpected changes in their circumstances, such as a growing family or a change in your work situation. We have successfully negotiated with our clients’ lenders to extend their mortgage term, allowing them to stay in the home they had worked so hard to secure.
How is home equity calculated?
Home equity is calculated by subtracting the amount you still owe on your mortgage from the current market value of your home.
Can you have negative equity?
Yes. With standard loans, your home equity will increase over time. With negative-amortizing loans — a loan with monthly payments less than the interest rates — your equity decreases over time as your owed balance increases.
| Contact Us
We have successfully negotiated hundreds of cases every year where we have arranged the sale of our clients’ homes and reached an affordable debt settlement with the lender. Whatever your circumstances, the first step to dealing with your property debt is to contact Negative Equity UK for an initial free, no obligation consultation with one of our advisors.
So don’t just hand back the keys to your lender, take a look at our reviews and call us on 0161 631 2727 or go to our website and arrange for us to call you at a time that suits you.