Bankruptcy advice

garyj123

Hi
Been in contact with citizens advice and looks like 1 of my options is bankruptcy, going down that route is viable but i'm a home owner with a mortgage so was wondering what actually happens once you have signed the papers and left the courts?, are you given chance to move out? if so how long do they give you? ....Thanks

chelseadagger_3

Don't know too much about mortgages, someone wil be along soon.

But just because u go br doesn't necessarily mean you will have to give up your home, think it depends on the equity in it and your ability to keep up the mortgage repayments!

skylight

You do not neccessarily lose your home in bankruptcy, it depends on a lot of things.

Equity - is there any?? (after selling costs)
Do you have mortgage arrears?
Do you have any secured loans and are these in arrears?
Could you actually keep up with mortgage payments and secured loan payments for the future?
Are these payments comparable to local rents? Or are local rents a lot cheaper?

There are masses of questions and a similar amount of outcomes!!!

But, in basic answer to your question, it really depends on the mortgage company and how long it takes to start repossession. You could do a voluntary repossession (Never sign anything though) whenever you please and just walk out. Many take this option as it is easier to set up a new home before BR - credit rating checked and BR stress is bad enough! Some people here have found that its anything from 3 months to a year before the actual repossession but in the current credit climate I would expect sooner rather than later.

fermi

Do you have any equity in the property?

Can you afford the mortgage, and would you want to stay if given a choice?

The OR/trustee will only look to force the sale of a home if there is equity in it belonging to you, and there is no other way to release that equity.

EDIT: Same questions (effectively) as skylight.

The possibilities are too varied unless we know more about the circumstances.

dodecanese

Hi Gary
Do you have any equity in your house?
If you do have equity a family member or a friend may be allowed to buy your portion from the OR.
If you have no or negative equity- again a family member/friend can buy any beneficial interest from the OR -but for £1, plus approx £211 conveyancing fees.
You would need to keep paying the mortgage.
Even if you have equity/no one buys you out/the OR takes the house- you wouldnt just be thrown out onto the streets. You would get time to find alternative accomodation. If you have kids I think you get up to about a year to sort out a new place to live.

I went bankrupt in March this year, and the property wasnt mentioned until the interview about 3 weeks later- so its not dealt with immediately.

garyj123

Yes i can afford the mortgage, and would probably stay here if i could since having 2 kids at school nearby. As i beleive there is little or no equity in the house

peachyprice

In that case you'll most likely be able to stay put.

Even if, for any reason, you did have to leave the house you would have a minimum of a year before the OR made any attempt to ask you to leave, up to a maximum of 3 years.

garyj123

Dont think i have any equity left in the house, if i have its tiny if any, i have remortgaged twice to raise some cash.
Did you have to leave your house? Some people say because i have the 2 kids and i will be able to keep up my mortgage payments that i will most likely to be able to stay in my home. From having a quick look online my mortgage is actually cheaper than it would be to rent a place!

skylight

Sadly, in BR kids are not given any further priority than anyone else.

If you are able to keep up your mortgage payments long-term - and bear in mind the potential rate increases that the BoE have already warned will happen this year (at least 2%), if you were to default on your mortgage AFTER your BR date, then its your problem. You cannot include it in your BR debts, whether its 6 months or 6 years down the line. Its entirely on its own.

If there is no equity (you don't get to decide that by the way!!), you or a great friend/relative will need to purchase your beneficial interest in the property. Then you will need to keep up payments on the mortgage.

If the OR decides there is any equity (you will need to get your own valuations etc too incase you want to argue this), you cannot afford to give him the equivilant in cash and you are the only legal owner, then he can force a sale - regardless of kids etc.

Property is a minefield in BR. You need to think long and hard about whats best for you and your family long term. Don't look at this with the rose-glasses or your heart. Its only bricks and mortar at the end of the day but you have to do what is right for you.