Hi jane,
I've got a bit of catching up to do here I think !
My understanding is the woman from Picture is basically correct.
There's a common misunderstanding that in Bankruptcy people automatically lose their house. This is not the case. When you go bankrupt, any assets you have automatically become the property of the OR. This includes any equity you have in property. The OR then has to sell this for the benefit of the creditors. In your case as you have substantial negative equity, there is nothing for your creditors so OR will have no interest in your property.
So even if you go bankrupt or into an IVA, this does not directly affect your secured loans, being either your mortgage or the Picture loan, and unless you stop paying them specifically they will continue as normal. Picture are not stupid - one of the reason these companies aggressively sell secured loans is because they know people cannot get out of them in bankruptcy.
So you need to look at the secured and unsecured loans separately, at least to a certain extent. The complexity arises because as has been mentioned above, once the property is sold or repossessed then any shortfall to Picture or the mortgage company can be pursued as an UNSECURED loan. The reason I said 'You don't want to have to do it twice' is because this could happen:
1) You go bankrupt and clear your unsecured loans
2) The property is not sorted out for over a year, (by which time you are out of bankruptcy), resulting in you being pursued for the oustanding amount as unsecured, and
3) You have to go bankrupt AGAIN to clear it! (or find some other way to pay it off)
It may be that if you were in an IVA that these unsecured amounts could be brought into the IVA once the property was disposed of within the 5 year IVA period, but you would need specialist advice on this. Failing that a better strategy would be:
1) Put all unsecured loans into a temporary holding DMP, paying the minimum amount to prevent any further creditor action;
2) Get the house sorted/sold/repossessed to 'crystallize' any unsecured shortfall;
3) Place the whole lot into an IVA or Bankruptcy.
There is a further complexity, I'm sorry to say. If the Picture loan and mortgage (and any other loans) are in joint names, your husband can also be pursued for any shortfall. That means you cannot solve the problem by entering into any arrangement on your own, your husband would have to be included.
I don't think a bankruptcy would be unlikely to have any effect on your husbands position, unless he is a full director of the company in which case he would be barred from acting for the duration of any bankruptcy. However he is wise to check.
Finally, I don't think you need worry to much about the housing issue - look at it this way. Yes, you may have entered into voluntary repossession with the lender. However, tell the council the reason you would seek council accomodation is if you were chucked out of your rented property because of bankruptcy. As this is highly unlikely to happen anyway (unless you don't pay the rent), you never need go there.
Hope this helps !
-Best
Please view my blog at
www.go4broke.blogs.iva.co.uk
'6 years sticking my head into the Lion's mouth of debt !'
