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Shared Ownership & Bankruptcy.

Hi All,

I have a friend who is looking into going bankrupt, he has alot of debt (not sure exactly how much) but is living in a studio apartment which is shared ownership. What will happen to his apt if he goes bankrupt? As he doesnt have a "full" mortgage on the apt, will that still count as a debt?

Sorry if this doesnt make sense!

Comments

  • DON79
    DON79 Posts: 3,842 Forumite
    hi KayJo66

    it all depends whether there is any equity but given it is a shared ownership, I would imagine there is not likely to be any equity. therefore there is no reason he would have to move or give up his shared ownership unless he does want to move and get rid of the mortgage? In which case any mortgage shortfall and arrears would get included in bankruptcy.

    also he should check his rental agreement to see if it contains any bankruptcy clause within the terms and conditions.

    Hope this helps.
    BSC #215/No.1 Jan 09 Club
  • KayJ066
    KayJ066 Posts: 345 Forumite
    Thanks DON, No he doesn't want to keep the flat, he would rather let the mortgage etc be included, i will ask him to check the clauses in his contract, thanks for your reply.
  • Secured debts incl mortgages are not included in bankruptcy. If he does not want to retain the flat he should stop paying the mortgage and it will be repossessed. Any shortfall after repossession woudl be a debt in the bankruptcy.
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