Bankruptcy and House Advice please.

Crimmey

Im writing on behalf of my father in law who has £65,000 in unsecured debts and a mortage of £27,000 @ 8.5% Apr due to bad credit rating on a right to buy ex-council house due to bad credit rating.

Due to job problems he takes home £160 (should be £230) a week and his wife £70 a week, neither on benefits. He is owed £1000 (few months arrears and car money) by his employer which is being taken to a tribunal. I told him to ring the CCCS as advised by many and they are sending him a pack and told him its very likely that the best way is to go bankrupt. All debts in his name apart from mortgage which is joint.

He is £1000 in arrears on mortgage after only 12 months (started November 2004) and the mortgage company have told him to pay it within a week or face action. What action could they take at this stage and what timescales? He is supposed to pay £270 pm ish on mortgage and £180 pm on a payplan for the unsecured debts as well as car insurance, car finance, utilities, council tax blah blah blah. I have made him cancel sky and broadband.

If he was to go ahead with bankruptcy would it be worth me paying his mortgage arrears as soon as poss for him or to save the money for court fees and filing? I understand the house, worth around £70000, will be sold to pay of all debts. However if sold before November 2007 I beleive the council wants 33%-66% of the discount back. Could I use this to delay compulsary sale of the house from now for 2 years so they have somewhere to live, have time to find a cheap rentable solution and so creditors get maximum amount back whilst being bankrupt and not paying alot? Could he stop paying mortage and payplan until the bankruptcy comes through (timescales?) or would he still need to keep on top of it which seems an impossible task.

I'm really fed up as they keep pestering her daughter(my wife) for money and it is really straining our relationship. I just want there to be a happy ending with minimum of fuss. We have given them aound £10000 in 3 years on rent and 'gifts' until we just moved into our own house. They've asked for £25 a week of us and her other daughter to help pay off mortgage before bankruptcy became an option but I am very reluctant to do so and I get very angry inside.

Any advice and any options would be a fantastic help and thankyou for listening.


from a very "stressed out" moneysaver

musey

I'm sure more imformed people will come along with more comprehensive advice but I wondered if based on their income they may entitled to some benefits? Have a look at this site aand see if they may be entitled to something. (sorry dunno how to do short links)

http://www.entitledto.co.uk/

Bossyboots

I can understand your anger. They should not be asking their children to be paying them money every week to bail them out. You have done more than enough with the amount of money you have given them and yet they still haven't managed their finances. At some point, they have to take responsibility for themselves (I would suggest this should have happened many years ago) and if they don't, you will be contributing to their finances for the rest of their lives.

Do what you can to help, but they have to learn to manage themselves.

[Deleted User]

The golden rule is NEVER bail out someone heavily in debt.

You will not get the money back - no matter how good their intention - and they may well keep spending.

Your in laws MUST seek their own debt counselling advice.

Meanwhile - be polite but firm - and DO NOT get involved.

Addicted2Chocolate

I beleive the mortgage co can take respossession proceedings once payments are 2 months in arrears. Not sure on timescale but id think about 6 months.
If goes bankrupt the Trustee would have to deal with property within 2 years. liely he would delay the sale to avoid having to repay council discount. but the mortage would still have to be paid.