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  • FIRST POST
    • Norfolk_Jim
    • By Norfolk_Jim 6th Dec 17, 2:10 PM
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    Norfolk_Jim
    A question about bankruptcy
    • #1
    • 6th Dec 17, 2:10 PM
    A question about bankruptcy 6th Dec 17 at 2:10 PM
    Hi, I'm beginning to think that my debts can never realistically be paid off (unless I die - don't worry, I'm not planning to do something awful) and that I would be forced into bankruptcy if I lost my job or my health got any worse than now.
    There is a question I am wondering about and I'm hoping someone on this board will have maybe been in a similar position and can give me some kind of answer.
    I have a joint mortgage with my wife on our house. My wife has no debt at all, everything except the mortgage is in my name alone.
    Can I be forced / expected to sell off my half of the house to pay back to my creditors? My wife owns half of the house so how is she affected by my going bankrupt?
Page 1
    • fermi
    • By fermi 6th Dec 17, 3:58 PM
    • 39,317 Posts
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    fermi
    • #2
    • 6th Dec 17, 3:58 PM
    • #2
    • 6th Dec 17, 3:58 PM
    All hinges on the level of equity and your beneficial interest in it, and if there is some worth pursuing, whether someone can buy that interest back from the OR

    See: https://www.gov.uk/bankruptcy/your-home
    I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards and Loans boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

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    • debt doctor
    • By debt doctor 6th Dec 17, 3:58 PM
    • 4,176 Posts
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    debt doctor
    • #3
    • 6th Dec 17, 3:58 PM
    • #3
    • 6th Dec 17, 3:58 PM
    Hi Jim,
    If you become bankrupt the OR immediately owns half the beneficial interest in your jointly owned home.
    If you have a personal equity level of more than £10k, it is likely that an Insolvency Practitioner (IP) would be instructed to sell the property to release the money.
    This cannot happen for a year past your bankruptcy date and the house must be 'dealt with' within 3 years otherwise your share goes back to you automatically.
    If less than £10k equity, likely the OR would put a charge on the property which would attract 8% interest per year.
    If no / negative equity you might be able to buy the OR's nominal interest in the property for £1000 - no guarantees though.
    Your wife's share of the equity would always be safe and passed to her in the event of a sale.
    Your wife's credit rating would be affected by your bankruptcy as you have a joint account.
    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • brightonbelle
    • By brightonbelle 6th Dec 17, 4:52 PM
    • 79 Posts
    • 16 Thanks
    brightonbelle
    • #4
    • 6th Dec 17, 4:52 PM
    • #4
    • 6th Dec 17, 4:52 PM
    my husband went bankrupt, I am being asked to buy his beneficial interest from the trustee or agree to a sale of my home - husband and I since separated - my credit score has been badly effected because of the financial association of joint mortgage. We can't remortgage together as he is bankrupt, and as we've now broken up I am having to do it on my own. Please please please keep your wife informed and get as much information together as you can, get things in place before you, and if you decided to follow the bankruptcy route, it's pretty stressful, do as much research as you can - I was kept in the dark. If you have a home try to protect it. Wishing you the best
    • fatbelly
    • By fatbelly 6th Dec 17, 4:56 PM
    • 11,643 Posts
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    fatbelly
    • #5
    • 6th Dec 17, 4:56 PM
    • #5
    • 6th Dec 17, 4:56 PM
    It's a drastic step from a homeowner to declare bankruptcy, as the others have explained.

    Are you on a debt management plan? Have you looked at an IVA?
    • Norfolk_Jim
    • By Norfolk_Jim 7th Dec 17, 10:24 AM
    • 1,180 Posts
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    Norfolk_Jim
    • #6
    • 7th Dec 17, 10:24 AM
    • #6
    • 7th Dec 17, 10:24 AM
    It's a drastic step from a homeowner to declare bankruptcy, as the others have explained.

    Are you on a debt management plan? Have you looked at an IVA?
    Originally posted by fatbelly


    Hi, I have been in touch with Step Change and also CAP. Both suggest selling up as we do have quite a lot of equity. Step change have also suggested a debt management plan. I'm still reading through all they have sent me. It's quite hard to discuss it with my wife as she is mentally ill - really I should stop working and be her carer but our debt traps me in my current employment - it's just kicking the can down the road but I'm aware I'm doing this along a cliff edge and I wanted to know where it would go if (and it is a big if) I was forced to declare BR. I've had some helpful answers so far, I know more now than I did a few days ago thanks
  • National Debtline
    • #7
    • 7th Dec 17, 1:12 PM
    • #7
    • 7th Dec 17, 1:12 PM
    Hi Jim


    Glad to hear you have talked things through with a couple of debt advice charities. That's better than starting with a fixed idea like bankruptcy and working backwards from there.


    It's worth pointing out that it's very unlikely any creditors would "force" you into bankruptcy, in case that was a concern. This is not something High St lenders tend to do - it's poor PR as much as anything else.


    Good luck


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • brightonbelle
    • By brightonbelle 7th Dec 17, 1:14 PM
    • 79 Posts
    • 16 Thanks
    brightonbelle
    • #8
    • 7th Dec 17, 1:14 PM
    • #8
    • 7th Dec 17, 1:14 PM
    please think really carefully, if you have a home do not go bankrupt they will make you sell it unless you are fortunate enough to have the means to buy the beneficial interest - they don't care what the circumstances, they just want their money...unbelievably you are better off if you borrowed more than your house is worth and subsequently in negative equity, you get to keep your home then, or even if you rent. If you think you will have to declare bankrupt then perhaps look to rent somewhere first as you can't once the deed is done, or it is a lot more difficult. I hope things get easier for you xx
    • fatbelly
    • By fatbelly 7th Dec 17, 5:07 PM
    • 11,643 Posts
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    fatbelly
    • #9
    • 7th Dec 17, 5:07 PM
    • #9
    • 7th Dec 17, 5:07 PM
    Hi, I have been in touch with Step Change and also CAP. Both suggest selling up as we do have quite a lot of equity. Step change have also suggested a debt management plan. I'm still reading through all they have sent me. It's quite hard to discuss it with my wife as she is mentally ill - really I should stop working and be her carer but our debt traps me in my current employment - it's just kicking the can down the road but I'm aware I'm doing this along a cliff edge and I wanted to know where it would go if (and it is a big if) I was forced to declare BR. I've had some helpful answers so far, I know more now than I did a few days ago thanks
    Originally posted by Norfolk_Jim
    Good. But I see no reason why you should sell your house, at least not because of a load of non-priority debts. How muchdebt are we talking about?

    If stepchange have suggested a dmp, go with that for now..

    If you then need to stop working and be a carer for your wife, go with that. A dmp just pays your surplus income to your creditors. If it goes down it goes down.

    As long as the mortgage can be paid the house is safe.
    • Norfolk_Jim
    • By Norfolk_Jim 8th Dec 17, 12:57 PM
    • 1,180 Posts
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    Norfolk_Jim
    about £40,000
    • sourcrates
    • By sourcrates 8th Dec 17, 5:09 PM
    • 12,673 Posts
    • 12,011 Thanks
    sourcrates
    about £40,000
    Originally posted by Norfolk_Jim
    Then as well as looking at debt management, look into doing an IVA also, usually people who canít go bankrupt due to having assets, such as a house, opt for the IVA instead.

    Remortgage is usually necessary in year 5, but if thatís not possible for any reason, you get an extra year of payments instead.

    Look at both options, see which would suit you best, as bankrupcy probably not the best route for you to take.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • fatbelly
    • By fatbelly 8th Dec 17, 5:20 PM
    • 11,643 Posts
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    fatbelly
    I agree.

    An IVA will require a fair monthly payment, I'm not sure how much you had in mind. A rough calculation says £200-220 as a minimum monthly payment.

    There is not so much flexibility if you have to give up your job and lower your payments.

    But it is a legally binding agreement and stops enforcement action.
    • Norfolk_Jim
    • By Norfolk_Jim 9th Dec 17, 4:01 AM
    • 1,180 Posts
    • 1,109 Thanks
    Norfolk_Jim
    Thanks for that Information, I will go and look into that as I could currently make the kind of payment you suggest or perhaps a little higher
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