Handing back the keys and going bankrupt. Is it really the best option?

PasturesNew

I'd rather take a hit of a £20k or more debt and get rid of it, than go bankrupt and have that follow me around for years mucking things up for me.

Also, if they go bankrupt, they'll miss the bottom of the market to try again.

Lakey

Surely the fact that they are married makes them both liable for any debt, and because of that, one can't walk away from the other.
It all sounds a bit odd to me, have we heard the whole story?

moneysavinmonkey

Dithering_Dad wrote: »

Bought for £112K + 8k Borrowed Deposit + 4K to do the place up = £124k.

ah ok, i missed the 8k for the borrowed deposit too! doh!

The OP really shouldn't expect to break even in these circumstances,
they are going to have to take a hit. Still don't think it is worth bankruptcy though, particularly given their employment status.

neverdespairgirl

fimonkey wrote: »

So they're talking about transferring the mortgage to one of their names only (i.e by telling bank they're splitting up) and then the one who's name is on mortgage and credit cards is planning to hand back the keys to the bank and declare themselves bankrupt. Apparently this means they won't be able to obtain credit/have a bank account etc for 7 years, but they think it's OK as the other (non bankrupt) one will be able to have a bank account etc.

IS this really their best option?

It's not even an option. You can't justmove the mortgage from a couple to an individual and "tell" the bank anything. You effectively need to re-mortgage in the name of the one person, and the bank has to agree. On their current incomes, neither is likely to be able to do that.

In addition, if you do go bankrupt, the Official Receiver will go over the financial affairs with a toothcomb, and has the power to reverse transactions.

Lotus-eater

Lakey wrote: »

Surely the fact that they are married makes them both liable for any debt, and because of that, one can't walk away from the other.
It all sounds a bit odd to me, have we heard the whole story?

I think we have, a couple tried to flip a property and earn a bit of good money "like they do on the tv like" it hasn't worked and now they are in do do's.
And they don't have a clue how to get out of it, so they are coming up with hair brained ideas because house prices only go up, so contingency plans aren't needed.

I feel sorry for them, but tbh, if they had made lots of cash, I can imagine sitting next to them at a party getting a barrage of advice, on how to make money on property and hearing about how they are thinking of becoming property developers.

Premier_2

Perhaps the OP should consider investing in a canoe? :cool:

Phirefly

fimonkey wrote: »

Not me of course (any regulars to this baord will know I'm sat firmly on my very twitchy fingers at t'mo).

honestly :rolleyes:

fimonkey

Lotus-eater wrote: »

I think we have, a couple tried to flip a property and earn a bit of good money "like they do on the tv like" it hasn't worked and now they are in do do's.
And they don't have a clue how to get out of it, so they are coming up with hair brained ideas because house prices only go up, so contingency plans aren't needed.

I feel sorry for them, but tbh, if they had made lots of cash, I can imagine sitting next to them at a party getting a barrage of advice, on how to make money on property and hearing about how they are thinking of becoming property developers.

You've got it in one Lotus Eater! ha ha, you don;t know then too do you?

To others; as stated in my OP, this is definately NOT me, (search my other posts in this forum and you'll see i'm a frustrated potential FTB.) Under no circumstances would I ever consider banckruptcy. Personally I feel you should always face up to your debts and pay them off, even if it takes the rest of your life to do so!

Their employment status is a bit of a mystery to me, but basically they work as a 'live in' couple, handyman/housewoman on a large country estate in Wilsthsire. They have self employed status even though they work for someone (I suspect for tax reasons) .. In the same way some self employed tradesmen are contracted to work for just one person, or medical agency staff can be 'self employed' even though the agency finds them work (I did this once many years ago when I was in and out of the UK travelling. Everytime I came back I signed on with an agency for odd bits of work, but was 'self employed' with the help of another company).

fimonkey

Phirefly wrote: »

honestly :rolleyes:

Ooops, Now I'm blushing!! I am just too innocent to see obvious double entendres like that one!

To be very clear, I am sat on my hands so I don't go and buy a property just yet cos I think there are further drops in price to come, but I am really really really tempted as the properties I like are beginning to come back into my price range at last. .... surely nothing can be read into that paragraph?:p

fimonkey

Premier wrote: »

Perhaps the OP should consider investing in a canoe? :cool:

Maybe I should get a canoe with the amount of rain that's around this weekend,

BUT I presume you mean my friends should buy a canoe, and of course not have enough left over from that purchase to buy the accompanying paddle?

Honestly, why do ppl assume when someone says 'my friend' it's really them? This is t'internet, you don't know me, I donlt knpw you, so why would I bother lying about a situation that affected me personally? (Rhetorical question btw, no answer needed).