Help i'm confused

jay09

. Going to be seeking advise through the correct channels but if someone could give a bit of a heads up it would be much appreciated. We have been told that bankruptcy is going to be are best option so we've come to terms with that. We have had our house up for sale for at least 6 months, which was done mainly to clear some debts. it hasn't shifted so we're stuck and now my job has gone on basic hours so there is no overtime (which probably doubled my wage). We,ve been told by a financial advisor to look for somewhere to rent before we go bankrupt (even though we still have a mortgage) ,is this a good way of doing things?

peachyprice

If you cannot afford the mortgage and any secured loans on the property, then yes you can stop paying, save for a deposit and go into rented.

If you can afford the mortgage you can stay in the house and still go BR, if you're now in negative equity you will most likley not lose the house, so there's no point in moving out.

jay09

Hi thanks

we have been advised that as it is a 2nd charge as long as the mortgage was still being payed there would be little they could do if payments stopped ie they cannot force a repossession.

We were told we would be better to find somewhere to rent whilst our credit rating was good and walk away from the house completely. But would this not look bad to the OR ie why pay rent if we can pay mortgage?????

peachyprice

Do you have a mortgage and secured loan?
You have to keep paying both as either can repossess.

The OR won't care either way whether you continue to stay in your house or rent, as long as you can afford whichever you chose.

RAS

Jay

We need a bit more information.

Who told you bankruptcy is the best option. and who is this financial advisor? His/her quals accreditation?

Value of house?
Value of mortgage?
Value of other secured loans/charges?

Cost of interest only mortgage and secured loan per month?
Cost of renting similiar per month?

House in your name, both names etc and one or both going BK?

jay09

RAS wrote: »

Jay

We need a bit more information.

Who told you bankruptcy is the best option. and who is this financial advisor? His/her quals accreditation?

Value of house?125000
Value of mortgage?122000
Value of other secured loans/charges?76000

Cost of interest only mortgage and secured loan per month?1400
Cost of renting similiar per month?600

House in your name, both names etc and one or both going BK?

House in both names, both going bk, everything in joint names

RAS

checking

Value of other secured loans/charges? 76000 - seventy six thousand pounds?

jay09

peachyprice wrote: »

Do you have a mortgage and secured loan?
You have to keep paying both as either can repossess.

The OR won't care either way whether you continue to stay in your house or rent, as long as you can afford whichever you chose.

We have been told that if the mortgage was being paid and the 2nd charge wasn't then as they only have 2nd charge could not repossses as mortgage company wouldn't allow it, is this not correct???????

Wouldn't walking away from a mortgage to rent look bad to the OR though ie leaving debt to rent another property????? If you rent and your landlord finds out about the BR can they evict you???

peachyprice

jay09 wrote: »

We have been told that if the mortgage was being paid and the 2nd charge wasn't then as they only have 2nd charge could not repossses as mortgage company wouldn't allow it, is this not correct??????? No, that is most definitely not correct.

Wouldn't walking away from a mortgage to rent look bad to the OR though ie leaving debt to rent another property????? If you rent and your landlord finds out about the BR can they evict you??? No, if you cannot afford to pay all secured borrowing the OR will not mind.
There is sometimes a BR clause in a tenancy agreement to say the LL MAY evict if you go BR, but that is designed to stop you going BR owing rent and still being able to stay in the property. if you are a good tenant and pay on time it's unlikely a LL will exercise this right.

Can I ask who has been advising you?

jay09

peachyprice wrote: »

Can I ask who has been advising you?

This is a friend who is SUPPOSED to be a financial advisor????

peachyprice

Perhaps they don't have much experience of bankruptcy

All that a second charge means is that they get second dibs when it comes to sharing out the money.

If you were to be repossessed your mortgage company would get their whole loan paid pack (providing the house sold for enough) and they secured loan company would get what ever is left.