Moving abroad with UK debts or a property in negative equity?

Many people take the decision to move abroad to start a new life overseas. There are numerous Countries that attract people and offer a better life and good employment prospects. Every year thousands of people will leave the UK, with the most popular destinations to emigrate to being New Zealand and Australia.

For the majority of people there are no issues-many having savings or equity in their property which (if they are lucky) is released through sale, prior to leaving. On the other hand there are many people that have built up debts over the years, and also many people trapped in a negative equity situation which leaves them unable to sell their property.

Further issues can be caused with the approval of certain types of Visa. In many cases people have endured a long process to be approved, and once the Visa has been confirmed there is a limited timescale to move-or lose the chance to move to a new life overseas.

If you have a general query feel free to contact us or send an email and an advisor will contact you as soon as possible.

Moving abroad with debts in the UK

A percentage of people that are looking to move abroad have some UK debts. The amount may vary from a few thousand pounds on a credit card to hundreds of thousands of pounds of unsecured and secured debts. What are the options you have in this type of situation?

The first thing to consider is whether to enter into a solution while you are in the UK or once you have moved abroad? In many cases it may be easier to deal with these issues once you are overseas however, the main thing to do is to take advice from a professional and explore your options.

There is no clear guide that can apply to people in this type of situation. If you have a low amount of debt you may wish to gradually pay this off; if you have a high amount of debt you may even consider bankruptcy, but with either option there are points to consider. Both options can be operated from abroad however, in the case of bankruptcy if you move to a European Member State different Insolvency Laws apply compared to Countries such as (for instance) Australia or America.

Moving Abroad with a house in negative equity

It is estimated that one million homeowners in the UK are in either negative equity or owe roughly the same amount on their mortgage as their property value. In these cases it can become very hard to dispose of your property. In many situations mortgage companies and secured loan companies will not allow a person to sell their property unless the sale price covers the amounts owing.

To make matters worse the UK housing market is in a generally poor condition. In April 2011 the number of mortgages handed out by lenders slumped to the lowest level since records began. Just 29,355 house purchase loans were granted – 18% fewer than in April 2010. This figure equates to 950 mortgages per day compared to 2,800 per day during the housing boom.

With the average buyer having to place a deposit of 26% the typical buyer must find £42,000 when buying a property with the national average cost of £161,000. With figures such as these it is no wonder that the UK housing market is flat with many properties for sale but no buyers available to purchase them.

Thousands of properties have lost value over the past few years-according to figures from Halifax; prices are 20 per cent below their 2007 peak. This has wiped more than £32,000 off the average property price. Even a small percentage drop of 5% to 10% can equate to £10,000 to £20,000 on a property worth £200,000.

Meanwhile, consultancy Capital Economics, believes prices could fall by up to 20 per cent by the end of 2012. If this forecast is correct up to 1.5 million homeowners could be lumbered with a mortgage greater than the value of their home, as property prices plunge.

Another factor causing further issues was the lending criteria that was applied to mortgages and secured loans in this period of time. Many mortgage companies were providing 95% or even 100% mortgages with an additional unsecured loan running alongside the mortgage. Secured loan companies were also willing to lend large amounts based on the debt being secured against the property as a second charge. In most cases these lenders were anticipating a steady increase in equity which would then mean their lending was fully secured and their money safe. It can be easily seen how the drop in equity and the lending criteria has caused so many people to become trapped in a property that is worth far less than the amount owing.

So what can you do?

In the event of this type of situation the options are somewhat limited. You are forced into a corner by the lenders and may have no alternative but to hand back your property to the mortgage company. Initially it is very important to take advice. Our company specialises in helping people that are planning to move overseas and we have assisted many people in this type of situation.

UK Property hand back service

Our company offers a specialist service that can deal with the hand back of your property on your behalf. It can allow you to continue with your plans for moving overseas and it can be as easy as instructing us and leaving the Country. We will act as your appointed agent in the UK and deal with everything on your behalf. The service is very comprehensive and has helped many people resolve their property and financial issues.

Once the property has been handed back to the mortgage company it can take anywhere from 1 to 12 months to dispose of. The mortgage company will take legal possession and market the property for the best price possible. In the event of the property not selling, the price will be gradually reduced until it has been disposed of-in some cases this could be via auction if there is no interest through a local estate agent.

At this point the eventual shortfall will become apparent. It is a straightforward calculation based on the sale price, sales charges and fees and the amount owed on the mortgage. If there is a secured loan (second charge) this will then become unsecured and also be owing in relation to the sale of the property. If the mortgage has been paid off and there is a surplus of funds these would be returned to you as the owner, or be passed onto any other party (such as a secured loan or charge against the property).

Once the shortfall has been clarified you can then make the final decision on how to deal with this debt and our service will also clarify your best options based on your circumstances at that point in time.

Specialist mail redirection service for people moving abroad

In conjunction with our hand back service many clients take advantage of our mail redirection facility. In the event of moving overseas you need to consider what you are going to do with your post. If you give out an address of friends or family you could be creating an issue for someone else to deal with while you are away. In the event of you owing money to credit cards/loan companies or other creditors the focus of all debt collection will be based on the new address you have provided. We have seen many situations where debt collectors constantly harass parents and friends, as this is the only address that they have to focus on. This can cause many issues including the breakdown of long standing friendships and family rifts. We advise that you consider very careful how you are going to handle this delicate situation.

Our service is quite unique and can be very useful when operated in conjunction with a property hand back or one of our specialist debt solutions. You arrange a mail diversion to our office address and we will open and check all post on your behalf.

On a weekly basis any important documents or letters are scanned and emailed to an email address (or addresses) allowing you to remain in up to date on the situation in the UK. Junk mail is destroyed and anything we consider vitally important is emailed on the same day we receive it. In the event of unpaid debts nobody is harassed and if you are also considering a debt solution this allows us to see the total amounts owing and also who is handling recovery of the debt. The service then allows us to clarify exactly what is outstanding and in the event of combining this with a property hand back a grand total of all debts outstanding is compiled within a period of time.

To apply for this service please contact us and we will call you to discuss this in greater detail.