Repossession or Bankruptcy - which is best?!

[genghis24]

I'm currently halfway through a mortgage holiday after 12 months of wrangling with our bank.

We now realise due to many unforeseen circumstances, that there is absolutely no hope of us being able to pay our mortgage again, once the relief period is over. We are looking now at returning to the UK.

Our house is also in serious negative equity.

If the French bank repossesses our house (most likely scenario) will we be liable for the deficit between mortgage owed and what the property sells for in auction?

Or is declaring bankruptcy in France more preferable - would there then be no liability?

Does anyone know the ramifications of declaring oneself bankrupt in France on one's status in the UK?

Do hope to hear anyone's thoughts, as just don't know where to begin and stressing beyond belief...

Thank you.

April

[Chancer]

I cannot help you with your question April other than wishing you good luck with the future, my first thought would be to ask at the Mairie to be put into contact with someone but that does mean sharing your problem with everyone in the commune.

I would like to ask you however if it isnt too painfull, how one could wind up in negative equity in France (you could answer in the abstract) I had always thought that lending criteria were so strict that other than with a dramatic national fall in house prices negative equity was an impossibility in France, I dont even know if there is a term for it.

It could serve as a warnig to others.

[genghis24]

Hello and thank you for responding.

Without going into detail, there was a period of time where certain banks (including very stupid/generous bank manager) were allowing debt ratios of 40-50%. We took advantage of the latter when times were good and are now reaping what we sowed...

I don't imagine banks will ever be this 'generous' again so hopefully won't happen to any one else.

[mint]

Poor you!  I suppose you have tried selling your house yourself in order to avoid this stressful and upsetting scenario?

 

[Les]

Just in case you haven't seen this, Bankruptcy

More to be found under "procédure de faillite en France"

[NormanH]

Have you looked at declaring yourselves surendettés?

http://pret-credits.fr/2009/06/faire-un-dossier-de-surendettement-pour-fiche-banque-de-france/ett

[Swissie]

Sorry I can't help - but having gone through a very similar situation with one of our daughters in the UK,  know how hard and painful it is.

Norman's advice and info sound really worth investigating. Bonne chance.

[Jimmy]

[quote user="NormanH"]Have you looked at declaring yourselves surendettés?

http://pret-credits.fr/2009/06/faire-un-dossier-de-surendettement-pour-fiche-banque-de-france/ett

[/quote]

Interesting subject but your link doesn't work (page doesn't exist error 404)

[AnOther]

Sorry to hear of your problems and I have no advice to offer but I wonder, can you declare yourself bankrupt (or it's equivalent in France) if you are not actually resident here ?

PS: Take the /ett off the link and it works

http://pret-credits.fr/2009/06/faire-un-dossier-de-surendettement-pour-fiche-banque-de-france/

[NormanH]

Thanks for making the link work Ernie.

I forgot to add: don't be afraid to see an 'aide sociale'  even if your French is weak.

Go with someone and ask for help. That is their job.