Pending Bankruptcy and Repossession Order

hannah9000 · 21 November 2008 at 9:23AM

Hi all,

I just wondered if someone could advise on my situation? I went to a solicitor last week as I have a court date (27/11/08) for a repossession order on the house that my ex lives in but is in both our names. Now, he doesn't work, and I do, the solicitor advised that any shortfall (and there is certain to be quite a shortfall) the mortgage company will come after me for. So we concluded that bankruptcy is my best option.

The court date is next Thursday, I plan to get a Bankruptcy Petition whilst i'm there. I'm wondering, is it too early to declare myself bankrupt before the house is repossessed/sold? What if it doesn't sell until after i'm discharged, then i'd still be liable for the shortfall right?

I've tried to read and research as much as possible, but have seen nothing that can answer this particular question. Any ideas?

skylight · 21 November 2008 at 9:27AM

As long as you include the property within your BR petition, then it would be included even if it took a year to sell and your liability for the shortfall is included too. This liability will then fall solely to your ex.

Your solicitor is right (ish) in that the mortgage company is more likely to come after you - not a guarantee as at the end of the day you and ex are jointly liable. But if he is not working and therefore likely to just bog off, then yes - the mortgage company is more likely to come after you rather than him.

peachyprice · 21 November 2008 at 9:33AM

Just to add, once you've gone bankrupt the whole of the shortfall from the house will fall to your ex. Now, not nowing your circumstance, you might think 'yipee serves him right', on the other hand if you're still friends you might think 'oh poo'.

As it's a mortgage shortfall they have 12 years to chase him.

As for your question regarding when to go BR, if you have other unmanagable debts you can do it before repossession. It doesn't matter how long it takes to sell the house the shortfall will always be covered by your bankruptcy, even after discharge.

HTH

hannah9000 · 21 November 2008 at 9:37AM

Thank you so much, you have both been incredibly helpful. My ex has been dealing drugs from the house and fully deserves being chased! As far as i know he'll probably declare himself bankrupt also.

I do have other debts, but they're not unmanagable. But I could do with the money and I figure as i'm going bankrupt shortly it makes sense to stop paying them now?

skylight · 21 November 2008 at 10:24AM

If you are planning on going bankrupt, then yes, you should stop paying everything except bills (current rent/council tax/phone etc).

Depending on the difference between essential outgoings and your total income, you may find that you will be paying an IPA towards your debts anyway. What about your solicitors bill?? Technically this should be included in your creditors list!

Read as much as you can - National Debtline have a good guide to BR and the insolvency.gov.uk has very good guides too.

Depending on your assets (which you may lose, ie your car etc) BR may not be the best course of action for you. So read everything, ask as many questions as possible and get some independent advice from the likes of CCCS or Payplan etc.

hannah9000 · 21 November 2008 at 10:29AM

I'm going to end up with a £30k shortfall, which I will not be able to pay off. Therefore bankruptcy is my only option I feel.
With regard to my car, it is on HP and I intend to continue paying it as I have never missed a payment and I hope to keep it. In order for me to keep my car, would I be able to get a family member to buy it (pay off the HP and I pay them monthly payments), that way it won't be in my name or under HP anymore and the OR can't claim it as an asset? Is that possible? Sorry if I sound a bit daft, i've no idea what's to come!

skylight · 21 November 2008 at 10:36AM

HP is different to ownership. You do not own the car so the OR should have no interest in it, but you need to check your HP contract as many of them will have clauses that they will take the vehicle back in the event of BR. As to someone else "buying" the car its best to check this with the HP company themselves and to get settlement figures etc, discussing all options with them. If they do allow you to keep the car, then get it in writing from them.

If they let you keep it, then the OR decides whether or not the HP payments (or part-payments) can be included in your SOA. If they say no then you can still keep the car if you can pay for it out of your surplus income. Or pay the family member back if they are allowed to "buy" it, from your surplus.

But it is down to the HP company and not the OR initally. And that depends on how old the car is, how many payments are left etc. BR is never simple!

hannah9000 · 1 December 2008 at 1:01PM

Just thought i'd update-

Went to court last Thursday, was quite scary! I was told the judge would be a friendly chap but he was very stern and serious and scared the crap out of me! Anyway, the house is being repossessed in 28 days (falls onto xmas day but they won't boot my ex out then booo!) and I have a Bankruptcy petition to fill in....it looked rather complicated and I think I'm going to need assistance filling it out.

Do I have to list my phone (which is on contract) on the SOA? And also do I need to list a catalogue account I have which currently stands at £150 and I have no issues paying it...

It's all so complicated!! However, I feel alot better knowing that this whole charade will come to an end. Thanks to all for your advice.

peachyprice · 1 December 2008 at 1:24PM

Hi Hannah,
Can't you slip the baliffs a crate of beer to throw your ex out on xmas day

Your phone, if you want to keep the contract you don't have to put it on, but depenending on how high the monthly payments are the OR may make you go onto PAYG, they usually allow up to £35 for a contract.

As for the catalog, I'm afraid that will have to go on, you can't pick and choose which creditors get included and which don't.

If you need anymore help with the forms, just shout.

hannah9000 · 1 December 2008 at 1:48PM

Thanks Peachy,

My phone is currently £39.99/month but I can change the tariff to a lower one no problem. I guess if I pay the catalogue off before I submit my form I won't have to declare it?
I'm not in financial difficulty now so I am in a position to pay things off (when I say things I mean the catalogue as that is my only low debt) the BR is for the house and all things related.

So the outstanding mortgage is £153k Obviously the house won't fetch anywhere near this much when they sell so i'm estimating a £30-40k shortfall.
We had a secured loan of £20k
I also have an unsecured loan with my bank for £10k.
I have the catalogue account at £150
My car on HP at £3900 (I pay £110 a month)
My phone contract £39.99/month (but as I said I can change this)
Oh yeah and a sofa contract £18/month for 3 yrs

So do I have to decare the stuff in Blue? Will the sofa get taken away? It's only worth £500 and I'm happy paying it....

peachyprice · 1 December 2008 at 2:26PM

Ok, so the shortfall will go, and the secured loan, and the loan with the bank.

As said before the catalog will have to go, but yes, you can pay it off before you go BR, if you want to.

The phone you can keep, downgrade it if you want to.

The car, you'll need to have a good read of the contract, some will take the car back as soon as you're BR. but as it's HP the OR can't take it because it doesn't belong to you, and £110 isn't too much to be paying for travelling to work.

The sofa, this will have to go too, but don't worry they won't take it back.

Infortunately, it's not a case of you being able/happy to pay for stuff, it would be favoring one creditor over all others if you didn't include them in BR, that's why they all have to go.

Pending Bankruptcy and Repossession Order

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