Bankruptcy

[worriedgirl]

Just wandering if anyone can give me adviceon bankruptcy.

I jointly own my house with my newly seperated partner and he wants to sell. The house is worth £80000 and we have a joint mortgage of £43000 and joint scure loans of £45000. If we sell there will not be enough to cover outstanding but I did think that I could then go bankrupt. What if I petitioned for bankruptcy and forced the sale or would we be allowed to stay in the property. Not sure of the implications. My personal debt is approx£24000

[chris.g]

Your share of any equity in the house would have to be 'bought' for you's to stay there if you filed for br but there doesn't seem to be any equity in the property. If you file br and your partner doesn't, as it is a joint mortgage and secure loan, the creditors will chase them for the debt as you are both equally liable. Hope this helps,

[worriedgirl]

thanks Chris what if I declared bankruptcy but stayed and paid the mortgage and the secured loan which I could probaby do with extra tax credits and child support would they still chase my ex.

[chris.g]

if the mortgage and secured lending was paid they wouldn't chase your ex. However, would you be in a position to buy your ex's share of the house and get a mortgage on your own?

[worriedgirl]

No I don't think I would. Is it possible if I go BR that the mortgage company will repossess the house anyway even if all payments are up to date as they are.

[Adam Davies]

Hi
It is doubtful,remember that the OR can wait for upto three years to deal with the house,so if you remain in the property and continue paying the mortgage and house prices increase the OR may force a sale towards the end of the three year term.
It would be best to have a third party buy the ORs interest straight away.
Regards

[MelanieGiles]

The mortgage company can only commence possession proceedings once you have missed at least three payments. If you can afford to stay on, and your partner is in agreement with this, your property will not be affected during bankruptcy, but you will need to find someone to acquire your beneficial interest for a nominal sum.

[worriedgirl]

I'm not sure what this means. As there is no equity there is no beneficial interest what would the nominal fee be.

[MelanieGiles]

You still have a beneficial interest which can be valued, and the sum of a £1 is used in cases where there is no or negative equity. This protects you against future increases in the value of the property which may occur throughout the bankrutpcy - remembering that the Trustee has up to three years to deal with your property.

[Reviva UK]

There are also legal fees for purchasing the Beneficial Interest - approx 212 for the OR's legals.

[worriedgirl]

who is able to buy out my beneficial interest

[worriedgirl]

if someone buys out my benefificial interest can the OR still then insist on sale later.

[Reviva UK]

a friend or family member can buy the BI - it just can't be you.

Once this is done then effetively the Official Receiver has sold his interest in the property and it is safe.

if you are going down this route suggest you have a quick conversation so you understand the procedure and are not phased by the process.

[worriedgirl]

I will do this I think this may be better than an IVA for me just incase I can't keep up with the IVA payments if excepted. I have approx £200 disposable income what would the likely payment order be. Is the payment order reviewed as with an IVA

[chris.g]

Around half of that so around £100. I think upto £250 it's 50%,
xx