2 years into Trust Deed (IVA) and moving to canada

[george82]

ok my situation is a strange one. i entered a trust deed (IVA) 2 years ago but i lost my job this year and all they said was as long as i make a token payment i will be fine. i have been offered a job in canada and seriously thinking about taking it, i need to be there before dec 31st. this month is the first month i have not been able to pay my mortgage as I'm not working also i doubt ill be able to make my payment to trust deed. my question is whats my best option here goto canada and forget about my debt send the keys to mortgage company.

can i go bankrupt from canada, explain situation to trustee. I've been reading on here and i see a lot of situations but i don't see any like mine so just hoping for any advice. I'm from scotland so i believe its a different process than england. all advice welcome

[unclebulgaria67]

If I were in your position, I think I would get the job in Canada sorted first. Advise the company dealing with the IVA that you have a temporary problem paying the IVA and also advise the mortgage company in writing. Tell them you have now obtained a work contract in Canada and will be able to start catching up with payments once the new contract starts to pay you. Get a friend or relative to check on the house in Scotland or to even live there paying you a small rent if necessary. You can put the house on the market if you need to and if there is a small debt left afterwards, you can see what you can do about this. It will be a much smaller debt, than a voluntary repossession.

 

You don't want to rush headlong into a massive mistake. If you hand over keys to a mortgage company, it may take them awhile to sell your house at a reduced price. Then you will have a very long time for the debt to be enforced on you. If you go down the bankruptcy route, it will cost you a few thousand to pay the fees. You would have to do this within 3 years of leaving the UK. It would be very messy

[george82]

Hi thanks for the reply. I'm worried that having to pay this debt will cause me more debt in Canada, I'm hoping for a clean start I have no equity in my home it's breaking even with what is owed and what it's worth. I thought bankruptcy was the easy solution but I'm guessing not. Even if I sell my house I will have nothing to show for it. In fact it may cost me money and buy the time I exchange it over it will be 1.8 times more expensive. If I just forget about it all and come to Canada what sort of trouble would that leave me in, would statue barred come into effect or not?

[unclebulgaria67]

Hi thanks for the reply. I'm worried that having to pay this debt will cause me more debt in Canada, I'm hoping for a clean start I have no equity in my home it's breaking even with what is owed and what it's worth. I thought bankruptcy was the easy solution but I'm guessing not. Even if I sell my house I will have nothing to show for it. In fact it may cost me money and buy the time I exchange it over it will be 1.8 times more expensive. If I just forget about it all and come to Canada what sort of trouble would that leave me in, would statue barred come into effect or not?

 

Statute of limitations on mortgage debts is 12 years in England. In Scotland it is 20 years for the capital debt and 5 years for the interest part.

 

If you hand over the keys, it will probably take them many months to sell and they may sell it for say 25% below market price, plus there will be fees involved. Then will then chase for a debt of tens of thousands, at which point you would need to go down the bankruptcy route. This may not be that easy if you are living in Canada.

 

I can really understand the feeling to run away and just not think about what happens afterwards. Think this would be a big mistake.

 

The most important thing for now is to be able to earn a living and if that means moving to Canada, then that is what you need to do. You don't need build up a debt in Canada, as once you start earning, you can work out what you have left to pay any UK debts. You then make an offer to UK creditors. What about renting your house out in Scotland, so you have income from that, which goes to pay the mortgage ? You would not be able to obtain permission to let your house from the mortgage company, because you don't have enough equity, but you could just not tell them. Many people do this, in this type of situation. What about a mortgage holiday or interest only ? What options would the mortgage company allow for a short period ?

 

See if you can visit a local debt advice centre and see whether they can discuss your situation with them. Talk to friends and family to see what they say.

[george82]

yes they don't want me to rent it. i have used my mortgage holiday 2 years ago when i lost my job before. i may just have to tell them I'm moving and when i get on my feet see what i can afford to pay and go from there. if i advise the mortgage company that i may not be able to pay for a few months whats the worst that could happen. also the same as my trust deed that currently is 260 per month which there i no way i can afford that.

[unclebulgaria67]

yes they don't want me to rent it. i have used my mortgage holiday 2 years ago when i lost my job before. i may just have to tell them I'm moving and when i get on my feet see what i can afford to pay and go from there. if i advise the mortgage company that i may not be able to pay for a few months whats the worst that could happen. also the same as my trust deed that currently is 260 per month which there i no way i can afford that.

 

You just have to tell people of your situation and then they have to advise you of your options. Better to do that, than keep them in the dark. Each mortgage company will have different rules regarding the number of missed payments before they will take action, such as applying for possession of a property. I don't think it is a quick process.

 

As for the IVA, speak to the company that manages this and see what they say. You may be able to agree a short period of no payments, following by reduced payments over the relevant period. If you cannot pay the IVA, it will fail and you will just leave debts behind.

 

As you are moving outside of the EU, you will have up to 3 years to declare yourself bankrupt in the UK. So there is no need to do this in the near future. If the house will be repossessed and sold, you would want to wait to include that debt as well.

[unclebulgaria67]

As a bit of further advice on this. If you are not going to let the property, then it might be an idea to put it on the market at a price that covers the mortgage plus selling costs and see whether you get any interest. If you can get a buyer as close to the value you need to clear the mortgage, it would be better than a voluntary repossession to the mortgage company. This is because it may be quicker for you to sell the house and the debt amount would be less. If you then did not want to go down the bankruptcy route, that might be still be an option.

 

If you are not going to be shipping your house contents across to Canada due to the cost of doing this, then you might decide to sell them to a house clearance company and/or sell some items of value locally, to help raise funds.

 

In regard to Home Insurance, once you clear the house, you can cancel the Contents Insurance element and leave the Buildings Insurance in place. You should check with the Insurers the terms that apply to unoccupied properties, as there will be actions you might need to take. e.g draining water from your system and turning off the water, to avoid potential of damage due to water leak/burst pipe.