Advice Needed Please!

[sadsteph007]

Hi, I was made bankrupt last July and am coming up for automatic discharge (at last!). But I need a bit of advice regarding my housing situation. I have a house with an interest only mortgage and a secured loan, so when I went BR I had a valuation done, and at that time there was little or no equity in it so I said to the OR that I wanted to buy back the beneficial interest and he said this would be dealt with once I was discharged and the relevant documents would be sent to the relevant department, that was a year ago and i haven't heard anything since then. The trouble is the housing market has taken a downward turn and so now it's definately in negative equity. But my mortgage payment together with my secured loan are so high, my interest rate is 8.9% (adverse credit mortgage). So my question is this, is there any chance that anyone would let me remortgage to reduce my payments? Or if I handed back the keys to the house after I was discharged, would I then be liable for any shortfall? Also, if the house was repossessed would this look even worse on my credit file if and when it came to getting another mortgage? My partner has a house and we've discussed moving in together so i would want to be put on the mortgage (my house is only 1 bed and he has 2 children who visit so we can't live in mine). His lender has said that this is fine as long as I've been discharged for a year, but would a repossession alter this? Sorry for so many questions, but I just don't know what to do for the best. Many thanks.

[MelanieGiles]

Hi sadsteph and welcome to the forum

It will be impossible for you to remortgage if you are in negative equity, and at present any shortfall to the secured creditors will be deemed to be a creditor in your bankruptcy, but this will not be the case when you are discharged and if you buy back the beneficial interest.

I cannot say whether a repossession of your property would affect your ability to put your name on your partner's mortgage in the future, as this will be an issue for that lender at the appropriate time. If you are looking to get another mortgage for yourself in the future, the fact that you have had a property repossessed in the past will almost certainly have an effect upon the type of offer you are given - but this will wane over time as you build your credit rating back up again.

[kallis3]

Hi Sadsteph, and congratulations on coming out the other side of BR.

One of the experts will be along shortly to advise you.[:)]

[sadsteph007]

Thanks for the prompt replies - but another question i'm afraid! I'm discharged on 29th July, so what happens say if I receive the forms to buy back the BI on 30th July and I say no I've changed my mind? Would they let me change my mind? If I just moved out and gave back the keys would that then mean I'm liable for the shortfall if the house was repossessed and sold? Or would the shortfall still be covered by my BR even though I'm discharged?

I'm thinking I may be better off buying back the BI, hanging onto my shoebox for another few years and then selling. But to be honest this house holds bad memories and i wouldn't really miss the house itself, I'd miss having my own place and it's just that I'm scared of not getting back onto the property ladder ever again.

And thanks Kallis - it's been a long road to get here! Had major ups and downs along the way and it sometimes feels that just as I've dealt with one lot of problems along come another lot!!!! I think I thought, like some people, that once I was bankrupt my problems would be over. My advice to anyone thinking of BR would be to really look into the future implications too. But hey - it's not the end of the world - we all survive!!!!

[MelanieGiles]

If there is a chance that you are not going to buy the beneficial interest, and you are concerned about how any future shortfall in the property might affect you, you need to discuss this with the Official Reciever dealing with your case.