house at bankruptcy

geeka

hi all, still not sure wether to do BR or not, just a general question, i have a house and its in negative equity, got 21k worth of debt. if i go BR can i say i dont want to keep the property, how does it work??. also my friend has said i could move in with him and he wouldnt charge me much but what about him giving me a receipt for more and then giving me some back, i know its not right but he wants to help me out, what can i do??. also if i go BR i have to make payments to the OR but for how long. sorry lots of questions but i want to try and understand more.
thanks.

skylight

Payments to the OR, known as IPA is not a definite. It depends entirely on your income and allowed expenses (which are reasonable) and then you only pay 50% (or so, on a sliding scale) of whatever is left over (surplus). If you do have to pay a surplus IPA then this will last for 36 months. Depending on when you go BR, you may also have to pay your tax direct to the OR and not the taxman for the remainder of the tax year - but as you pay this out anyway it does not affect you!

Your house - you do not have to keep it in BR. Houses are a minefield in BR - you may or may not keep the house depending on equity, arrears, secured loans and any arrears, because you don't want to keep it. There are many threads on here about voluntary repossession, so take a quick look at them. You will need to tell your mortgage provider you want to give up the property and see what they have to say. NEVER ever sign anything in vol repo - it can make BR messy.

As a first port of call, you should phone one of the free charity groups - CCCS or Payplan (links are at the top of the board). They are professionals and can give you some great advice.

peachyprice

Hi Geeka,
As your house is in negative equity the OR will have no dealings with it, you have to sort it out with your mortgage provider yourself if you don't want to keep it.

The shorfall after repossession can be added to your BR.

geeka

thanks, i'm currently on a debt management plan and am paying towards my debt, it will take 6 years at the current rate. im really not sure what to do, want to keep my house but then again want to just start again. bankruptcy is a serious decision and i'm thinking its better to pay it off as it wont adversely afect my credit score as much as bankruptcy. reading the posts on here makes me realise i am in a much better situation than some but its still hard sometimes when you struggle to make ends meet!!!
there are some great people on here and everyone is so supportive, makes me realise i'm not alone in this situation!!

dalip

No you not alone by any means.

I know nothing about houses but my only comment would be that being on a DMP your credit rating may well be shot the same as in bc. I understand you wanting to keep your house and 6 yrs is not that long really,compared to some. The bc option is always there for you should your circumstances ever change. Non of us know what i around the corner. Good luck to you. D