Do spouses have to go bankrupt to when mortgage is in joint names

jb1977_2

Hello,

Please give me some advice!!!

I have seen my earnings drop to nearly nothing now and have amassed a lot of debt over several years. My wife has an income of around £9k per annum and the only debt she has is our joint mortgage of £155k and attached unsecured loan of £22k, our home is only worth £160k.

My other unsecured debt is around £30k over 3 credit cards and one personal loan. I have never missed payments on any debt but next month have no money to pay any of them, my wifes income will be for food and utility bills.

I have realised it is to late to do an IVA as my income is stopping and I will have to cease trading (I work self employed in the mortgage market) and go bankrupt and find a new carear.

My major priority is to start bankruptcy procedings but am unsure if I should carry on as is for a while and start missing payments to prove I have to bankrupt as I am concerned if I just apply for bankruptcy with a good credit rating I may be declined. I guess that's my first question?

My second question is does my wife have to become bakrupt as we would have to lose our home as she can not affford the mortgage on her income and I would be out of work until I could find work.

Final question is who is best to talk to about this is it the CAB?

Please help, thanking you in advance

tigerfeet2006

You really need to talk to one of the debt charities listed in my signature.

If your wife doesn't go BR she will be responsible for paying yhe mortgage, secured loan and any joint debts.

You should also check whether you are entitled to any benefits, tax credits etc. Agood starting place would be https://www.entitledto.co.uk

jb1977_2

I could put the mortgage and loan in my name only but would the court see this as fraud or someother crime if shortly after putting the debt in my name I go bankrupt

SuziQ

You seem to be jumping to BR very quickly considering you ay you have never missed a payment yet! I lost my job in April and have been able to negotiate reduced payments for a while,some accounts have no interest being added for several months and the mortgage company have been unbelievably patient given I had trouble paying several times last year also.

Speak to one of the debt charities,find out what benefits you are entitled to (your wife's salary is relatively low) they are the only people who can advise you properly as your situation isn't quite desperate yet (though I fully appreciate it feels so!)

tigerfeet2006

No! don't do that. You will get in serious trouble with the OR.

Where houses are concerned it is complicated so pick up the phone and phone someone like National Debtline now.

SuziQ

jb1977 wrote: »

I could put the mortgage and loan in my name only but would the court see this as fraud or someother crime if shortly after putting the debt in my name I go bankrupt

You would have to prove ability to pay these surely,but I am pretty certain this would be seen as a no no having read these boards for a couple of months now!

rog2

It really depends on what you intend to do about your house. The OR would only be interested in your beneficial interest in the property - which looks to be very low. Your wife would be given the opportunity to 'puchase' your BI from the official receiver.
The 'mortgage' itself would not, normally, be included in your bankruptcy, other than in your Income/Expenditure statement (in a similar way to rent).
You have, in fact, several options, depending on whether or not you still wish to try and hold on to the house. This will, of course, depend on you/your wife being able to continue to meet the mortgage repayments.
If 'renting' is a more attractive position, you may wish to consider voluntarily returning the property to the mortgagor, but if you feel that, even by taking a low paid job, you would be able to keep up with payments, then it may be worth your while contacting the mortgagor to see if you can 'reduce' your payments, or even take a mortgage 'holiday'.
As the options are quite varied, it will definitely be best if you sought professional advice from one of the Debt Charities before you go ahead. Try:

National Debtline - http://www.nationaldebtline.co.uk tel 0808 808 4000

CCCS - http://www.cccs.co.uk tel. 0800 138 1111

or even your local CAB

Good luck

So_Sad_Angel

Hi jb1977,

Welcome & well done on taking a responsible approach to your situation.

As TF says the debt charities are your first port of call...CCCS do appointments but Nat Debtline can advise immediately. CAB of course but usually there is a waiting time for appointments as they are so busy. Unfortunateley as you know the debt issue is really escalating!

Your OH does not need to go BR, however (as is my case), she will be left with any debt that is in joint names & therefore responsible for the mtge & SL that you cannot pay as you have no income...as you say these will fall into arrears & then they will chase her for the debt as well.

I would approach the mtge Co & ask for a payment holiday..this may relieve pressure & give you time to look for a new job. Your credit rating is good then they should be very happy to do this.

The debt charites may suggest token payments & reduce outgoings as BR may be too hasty/drastic at this time especially if you then get a new job quite quickly.

Hope this helps,

Angiexx

rog2

jb1977 wrote: »

I could put the mortgage and loan in my name only but would the court see this as fraud or someother crime if shortly after putting the debt in my name I go bankrupt

Definitely do not do this. The OR will look at your recent financial affairs - probably over the last two years, but can go back as far as five years - and will want to know the reasons behind such a move. In certain cases they have the power to 'reverse' deals which can be seen as 'engineered' to give preferential treatment to certain creditors, or be fraudulent in nature. Equally the OR has the right to refer matters of fraud to the criminal courts and you could face a possible prison term.

Get some professional advice - please.

jb1977_2

Thanks for all the advice, to answer some questions.
We are quite prepared to lose the home and we have no payment holidays left.
If I was to get a new job paying say £15k per annum I would be short around £1,000 per month on debts repayments and whilst I appriciate that people may think it is to soon to look at BR the only reason I have missed no payments on debt is by increasing my credit cards by £2k per month in the hope that my work would turn round, I have now woken up from that dream and realsied it will be around 2 years until the market enables me to earn what I was just 6 months ago.
Should I attempt to sell my house and if so what would a mortgage company do if the sale isn't enough to redeem the mortgage?

Thanks again people

So_Sad_Angel

If you are prepared to lose the house as there seems little hope in meeting the payments then take some time to look at rental options. Much better to secure rented before you take the BR route (if that is what the debt charities recommend).You will then be able to work out an affordable budget on much lower outgoings.

I found that looking at the rental options a very positive move as got much more property for a lot less than I was paying in mtge, SL etc. Depends on where you live of course.