Would I lose My House ?

munkyface

Ok here we go ..

I am pregnant for the second time and we both (hubby & I) feel we just won't be able to survive financially unless drastic action is taken. But in light of the situation I really don't want to lose the house or the car (my car) hubby has company car. Can you go bankrupt and keep the house? There is no equity in it as we bought it last year. It's a real do upper and we are living in a building site. We are just treading water and are now caught up in the "interest cycle" where we are getting nowhere and paying a fortune for it.

We both work full time
Hubby £37,000
Me £26,000

Can we go bankrupt when we earn this much?
Would they still take the house off us even if we still keep paying the mortgage? (we can afford the mortgage if we get rid of the unsecured debt)
Could I keep my car (to get to work) if I kept paying for that.
If they kicked us out of the house would we ever get another mortgage again?
Would our employers find out?

All in all we have about £80k of unsecured debt plus the mortgage.

Nett Income per month £3,700

Outgoings per month £3,417 not including food, fuel school lunches, clothing etc.

What are our options?

Help please.

peachyprice

It's highly unlikely the OR would take the house as there is no equity, you will be able to buy the beneficial interest (OR's right to the equity) for £1 + £211 costs to safeguard yourselves.

As for your car if you can prove you need it for work and it isn't worth more than £2kish you should be able to keep it.

HTH

deedee_3

Also you need to phone one of the debt charities and speak to them. National Debtline is open till 9pm

Will just find the links for you. Here you are, this is from Fermi's sticky at the top of the board.


Advice on bankruptcy.

The court/judge will normally ask whether you have taken professional advice that bankruptcy is in your best interest. If they believe you have not taken proper or sufficient advice then your bankruptcy may be refused. There are many places and organisations that you can get advice from, but the ones that people on this board have found most useful are listed below:

Main recommended sources of help:

• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)

Others:

• Business Debtline - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

For general queries about bankruptcy you can contact:

The Insolvency Service Enquiry Line
Tel: 0845 602 9848
Email: [EMAIL="insolvency.enquiryline@insolvency.gsi.gov.uk"]insolvency.enquiryline@insolvency.gsi.gov.uk[/EMAIL]

(Please be aware that the enquiry line cannot give debt advice or counselling or advise you whether you should go bankrupt. They can only answer general/technical questions on bankruptcy)

Many people find that debt and bankruptcy is the cause or result of a period of great distress and anxiety in their lives. For some this can reach a stage where it is difficult to cope. So I would remind you that The Samaritans are available to help you through your troubles if the emotional side threatens to become overwhelming.

skylight

Mortgage and cars are not as simple as yes or no. Sorry.

The car is likely to stay with you if you need it for work - but it depends on its value. Anything over £2kish is likely to be taken and a sum less than this will be allowed for the purchase of a cheaper car. It depends on that and the OR on the day and your situation at the time.

Your house is the most complicated. I know that you probably don't mean it the way it came out, but bankruptcy is not about clearing unsecured debt just so you can keep your house and mortgage going. The house has a lot to do with any equity in it, whether you can keep up the mortgage and any secured debts on it, and how would you cope with a 2% rise?

If BR were your only option, then no-one finds out unless you tell them. The BR is publicised on the insolvency site and a small ad placed in your local paper, but most people do not read those. And you would get a mortgage again in years to come, its difficult but not impossible. The longer it is since BR, the easier it becomes.

You need to talk to a debt charity (free!) like Payplan or CCCS - details of which are on the main BR forum at the top.

RAS

Hi

Just to add that if your excess income after allowances is more than £100 per month (each), then you pay a precentage of your income each month for the next three year's (IPA).

munkyface

I really really didn't mean it like that. I just want this whole thing to go away. We work so hard and with another one on the way I really want to keep the house. I couldn't give a stuff about the car it's only a Seat Ibiza (hardly luxury) mind you it may be worth about £4k. But I need A car don't care what it is.

And I'm just finding it hard to come with the reality. We have tried so hard to pay the bills evey month. I don't eat at lunchtimes to save money through the week but because i'm pregnant I really have to stop all that.

There is no equity in the house.

Sorry I probably sound like a bit of a whinger

skylight

Hey - we all whinge about our lot in life!!

peachyprice

Even if they did consider there to be enough equity to take the house, which as I said above is HIGHLY unlikely, you won't just be thrown out at a moments notice. You will able to stay put for a minimum of 1 year, max of 3, and would be given time to find alternative accomodation.

The OR is only interested in a house if there's any money in it, with negligible or negative equity it would not been considered a viable asset.

danc123

just out of intrest how would they go about paying for the house? Just keep paying the mortgage on it, so basically go bankrupt on all the other debts? how is equity evaluated, just an independant surveyor? My brother thinks he has to lose his house as has about 8k in it but the way the market is going......not for much longer! Also can you clarify eviction, we thought he would have to be out immediately?? he could be given a year to sort himself??

sorry for the hijack but hope these points will be good for munkyface and thank you all for your advice

tigerfeet2006

danc123 wrote: »

just out of intrest how would they go about paying for the house? Just keep paying the mortgage on it, so basically go bankrupt on all the other debts?Yes that is it basically. how is equity evaluated, just an independant surveyor? The OR may do his own valueation but your brother should get a few estate agents in to give a value ation for a quick sale My brother thinks he has to lose his house as has about 8k in it but the way the market is going......not for much longer! Is it a joint mortgage or is he on his own? Also can you clarify eviction, we thought he would have to be out immediately?? he could be given a year to sort himself?? If there is no equity then the OR will have no interest in the house and it will be up to the mortgage lender to reposses, so it will be for as long as it takes them to get their act together. If there is equity then the OR will give him a chance to get rehoused.

sorry for the hijack but hope these points will be good for munkyface and thank you all for your advice

Make sure your brother gets advice from one of the debt charities as houses can be very complicated in BR. See my sig for links and numbers.

If he decides on voluntary repo.then BR he needs to stop paying his mortgage and any secured loans and any debts. Just pay utilities and essential bills. Save the money from mortgage etc. for deposit and BR fees, find a rental house and move, then go BR.

But please make sure he takes proper advice.

LizzieS_2

If you are both going bankrupt then your car will be sold, if just your husband going bankrupt you would be able to keep the car as long as the OR is satisified that it is bought and paid for solely by you.

The house (or just your husbands share if only him going bankrupt) will go to the OR. The fact that there is no equity is irrelevant. Not 100% sure if OR can refuse to sell the Equity (he must act in creditors interests), however if he can refuse you do need to think very carefully as the OR can put a charge on the property which will restrict you for years (see extract at end - taken from Insolvency website). A charge on property does not disappear upon bankruptcy discharge, also over time houses do tend to increase in value so it doesn't really matter if the equity is currently small. OR can still force a sale if he thinks the mortgage is much greater than you need to spend on housing, although that could be delayed for a year.

Before going down this route - check exactly what will happen and then compare the alternatives.

"If the trustee cannot, for the time being, sell your home, he or she may obtain a charging order on your interest in it. If a charging order is obtained, your interest in the property will be returned to you, but the legal charge over your interest will remain. The amount covered by the legal charge will be the total sum owed in the bankruptcy (including the costs and money interest). This sum must be paid from your share of the proceeds when you sell the property.
Until your interest in the home is sold, or until the trustee obtains a charging order over it, that interest will continue to belong to the trustee, including any increase in its value. Therefore, the benefit of any increase in value will go to the trustee to pay your debts, even if the home is sold some time after you have been discharged from bankruptcy: the increase in the benefit will not be yours."