Housing Question

MessyMum

Hi All,

I new to the whole MSE thing, I have posted a couple of times on the DFW board.
Having probs paying debts (isn't everyone), spoke to payplan and have started the ball rolling on an informal arrangement.
I am constantly being told conflicting info about being bankrupt, can anyone advise me on the following please.....

We owe about £26K in unsecurred loans/c cards/over draft
We have a mortgage for £113K and think our house would be worth no more than this (probably at least £7K less) If we went bankrupt would we be able to keep the house as we are in negitive equity??
What would happen in the future?? If in 10 years time we decided to sell the house would we have to pay a big chunk to the orriginal debts??

Hope that makes sense.

Thanks in advance
MessyMum x

Scarlett.1974

Hi MessyMum (love your user name!),

In answer to your 1st question, it depends on what your mortgage (and any secured loan costs if applicable) costs are in comparison to rents in your area. If the costs are similar then yes, you should be able to keep the house if there is no equity You can buy the BI (beneficial interest) for a nominal cost of £1.00 (+ legal fees, in the region of £240 I think - someone else will be able to confirm I'm sure).

I'm afraid I don't know the answer to your 2nd question, having not been in that position myself, but someone will know on here I'm sure.

HTH

MessyMum

Thanks for the reply (I am a very Messy Mum )
I will have a look at rents now, but think they are prob less than we are paying on the bleeding mortgage.

MM x

sandywindsor

Hi MessyMum,
my payments and secured loan were quite excessive so I decided to move to rented.In BR OR took ownership of comes my property that is where purchase of BI in. it will depend on whether mortgage is joint that complicates the issue. The best advice is to contact one of the free agencies (see Dalip's notes)


Best of luck


Sandy

peachyprice

Hi Messy,

For the OR to want you to give up your house for rented the difference would have to be subtaintial, £100's and £100's a month more.

As you're in negative equity it is likely you will be able to keep your house, the OR won't turf you out just for the sake of it.

If you do keep the house the OR has a maximum of 3 years to realise the asset if you don't buy the beneficial interest, after this it reverts back to you and the OR cannot touch any future equity, this is something that has changed in recent years, it used to be that the OR would always be able to take any equity raised.

MessyMum

Thanks for replys everyone
Have just checked out rightmove, there are 2 houses in our road exactly the same as ours that are £550 per month rent. Our Mortgage is £720 a month... well should be £800 as we have a "together" mortgage with Northern Rock but have been advised to only pay the actual mortgage part for the mo, not the unsecured loan. I guess that complicates things further.

Do you think its worth ringing payplan again and discussing going bankrupt? Also do you have to be months in arrers with debt payments before you can go for BR??

Ta
MM

creditmonkey_2

Hi MessyMum,

You need to get a survey done on your house to get the true value before you do anything, and beware of those pay it back over time deals out there. basicly if it looks really bad seek advice from the many debt charitys, then consider bankruptcy as an option as long as your reasons for debt are genuine you have nothing to fear, even the banks,major retailers and joe public are going down faster than niagra falls, so dont feel bad :money: goodluck on your journey, there is a lot of knowledgable people on here that will help you.:A they saved me from many a sleepless night.:eek:

chelseabun_3

Hi MM,

Talk to one or more of the debt charities, rather than payplan, as they won't have a vested interest in what you decide. If you do go BR the judge will ask who you've taken advice from about the implications of BR, and you really need to be able to say at least one of the charities.

You don't have to be in arrears at all to go BR - we went into arrears about a week before the actual BR date, due to when the DDs were due (which we had obviously cancelled!)

You are likely to be able to keep your house if you're in neg equity. Is the mortgage joint or in one name only? Would both of you be going BR, or just one?

CBx

creditmonkey_2

B U M P



Exellent Advice :money:

MessyMum

Yes Excellent advice, thank you

I will try and ring NDL over the weekend.
Most debts and the mortage are in joint names so we would both need to go BR.
Righty ho, off to bed now, hopefully will sleep a bit better tonight Aren't debt worries horrid
MM x

DON79

Sleep well MM. It is good to just talk about stuff and get it out of the way. clears your mind a little.