GDP mediation results in £62,039.20 of a Negative Equity Debt Write Down

Case Matter:
In March 2019, a lady had an initial consultation meeting with us regarding a property that she lived in that was in severe negative equity. The property was valued at £49,950 and the current mortgage outstanding was £112,029. In addition to this, as the lady was a single mother, she found it very difficult to sustain her monthly mortgage payments. Subsequently, after falling into arrears, she was then left with little option but to seek professional advice and contacted our office.

Solution:
Our first aim during our initial consultation meeting was to give reassurances that solutions are always available to settle a debt issue. The client was understandably very distraught as this matter had been ongoing for many years. However, after our initial consultation meeting, she was immediately put at ease when she became aware that a solution was available to bring her nightmare to an end.

During our meetings over the following months, we worked with our client and devised a workable strategy. Once agreed, we started to put the wheels in place to transport our strategy into a solution. Upon reviewing our clients’ financial information, our team proposed a consensual sale to the bank thus achieving the best sale price for the client and for the bank. In agreement with the bank, over following few months, the property sold for £49,950.

As our client had no disposal income to offer the bank any form of monthly repayment plan, we then proposed a full and final settlement offer in respect of the outstanding debt. Having borrowed funds from friends and family, our client was in a position to offer a full and final settlement totalling £5,200, which would go towards the total mortgage shortfall debt post sale which was £67,239 which included selling costs that were deducted from the sales proceeds and added on to the residual balance.

Over the next few months, we worked closely with our client to ensure all required information and documentation was provided to the Bank. In December 2020, we then offered a lump-sum settlement to them. After just over a month of negotiations, the Bank agreed to a full and final settlement of £5,200. Our client was delighted with the outcome which was a fantastic result for GDP, but more importantly for our client.

Case Study Summary:
Creditor: Leading U.K Mortgage Provider owed £67,239
Proposed Solution: Full and final settlement proposal
GDP Mediated Settlement: Creditor accepted £5,200 (equating to 7.7p in the £)
Settled: February 2021