Bankruptcy & Repossession

rchddap1

Events for my OH's mother are proceeding at a rapid pace. For those that don't know or can't remember 1 year ago her partner left her and took the business with him...leaving her without an income. We couldn't see a way out for her and finally things are coming to some sort of conclusion.

The mortgage company are attempting to repossess her house. The notification for this came through before the notifcation about her being made bankrupt (or so OH has told me).

Question 1: Can they take her house even though she is going though the bankruptcy proceedings?

Question 2: I know there is a certain good account for bankrupts...but can't for the life of me remember which one. Comments.....

She has been struggling for the past year and to be brutally honest this whole process might actually do some good. She hasn't really got anything they can take, as she can't work and lives on benefits. The only asset she has is the house.....which is going now one way or the other.

Any info that I can pass on gratefully received.

Jen_Jen_5

all depends really, is the house in her name and only in her name. if so then it is an asset and i assume the OR wants it sold so s/he can pay off debts if this is the case there is not much point in your mum paying the mortgage and arrears and thus preventing the possession so she would be best concentrating her efforts on finding another nice place to live.

if there is negative or small equity, somebody else may be able to offer to buy your mums "asset" eg equity of £5K-£10K the OR may accept a smaller amount because once the costs such as his time, plus all the fees that need to be paid the creditors get roughtly the same amount. in this instance your mum will want to remain in the house and be able to continue to pay the mortgage in the future.

if she only part owns the house then the other owner can offer to buy out her asset from the OR and it may then be worth stopping the repossession so that your mother can continue to live in the house.

if your mum cant afford the mortgage over the next few years or it will be a stressfull burden (income support only pay the interest part of the mortgage so she will have the capital to repay) then she may be much better off renting, (she can claim housing benefit for rent) and more secure.

hope this makes sense

rchddap1

Perhaps I haven't made myself clear. The repossession and the bankruptcy are two individual and seperate actions being taken against my OH's mum.

Jen_Jen_5

i understand.

both of these actions may result in your OH mother losing her home but depending on the circumstances and what your mother wants she may be able to keep it.

as a bankrupt the house is not hers its the official receivers and s/he will sell it to get the money (asset or equity) to pay off the creditors.

if there is little or no asset your mum may be able to keep the house after the bankruptcy. she will then also need to address the lenders repossession and try to get that stopped by promising to pay off all arrears and not miss payments again.

if she is sole owner of house and there is lots of equity no point in paying the mortgage because the house will be sold by OR anyway. and the mortgage payments she is making will be better spent on rent or deposit for rental property.

if your mum is not yet a bankrupt she should deal with the repossession - ie can she afford to pay the mortgage and arrears? if she is already bankrupt should contact the OR and tell them the lender has started repossession proceedings.

it is unlikley that the repossession or bankruptcy will stop the other from happening and your OH mother may need to negotiate with both closely at the same time.

rchddap1

Understood. That is what I thought. Unfortunately it was only a matter of time before she lost the house one way or the other....just would be nice for it to be later if possible. Looks like it is going to be sooner, as my partner's mum does not have the cash to pay the arrears, or to continue to pay the mortgage as its stands.

Jen_Jen_5

sorry to hear that, unfortunately if the house is gone its gone and her time and energy will be better spent in getting a good rented home that is suitable and she likes.

she can ask the court for more time ie delay the repossession date so she can get alternative accommodation. i would suggest she explain to the court she has to get a deposit together and that because of the debts/bankruptcy etc its taking a long time, that she is ill and cannot work and show the court all the action she has taken to look for alternative property, she could argue that she needs longer because of her circumstances. She will need to demonstrate to the court all the action she has taken before the possession hearing to move out and get alternative accommodation, i would ask the court for as long as they can give her to move out 90 days (if your lucky) or 60 days should be possible.