Taking a gamble

sparky25

Hi,

I am a single parent with 3 young children all under 16.

I have debt consisting of credit cards, personal loans and secured loans.

I have spent the last week reading up everything I can on bankruptcy and have decided this may be my only option.

The gamble I am taking relates to trying to keep my home.

My thinking is I go bankrupt and due to present market conditions I am hoping the Official Receiver will not try to sell my house as it would result in negative equity due to there being a mortgage and two secured loans on it.

From what I have read, the Official Receiver will give me about 12 months. I'm sorry to say that I am hoping house prices continue to fall thereby keeping me in negative equity. At this stage, I am hoping that someone, family, friend etc will help me with the beneficial interest - if there is indeed any.

I am desperate to keep my home like everybody. Due to the interest rates coming down, my mortgage is at the lowest it has ever been and having covered every angle of bankruptcy including the prospect of trying to rent, I know I would be looking at twice my mortgage payment to rent somewhere.

The issue I am worried about is if I go bankrupt and this includes all debt, even secured debt, how do my mortgage company and secured creditors not go for repossession. I intend to keep the payments up but I am really worried that my optimistic plan wont pay off because the mortgage company will just go for repossession anyway.

Any advice....

peachyprice

Hi Sparky, welcome to the forum.

Bankruptcy doesn't include secured debt at all.
If you want to keep your house you will have to be able to pay the mortgage and both secured loans.

As long as your payments are up to date the mortgage or secured loan companies will not repossess.

One thing you need to take into consideration is how much your morgage and secured loans payments are compared to renting a similar size property in your area. If there is a very large difference (£100's & £100's) the OR can still ask you to give up your home.

Hope that helps.

sparky25

Hi PP,

Thanks for the reply. That answered a huge question. I just assumed that all debts were taken in by the bankruptcy.

So as long as I maintain all payments on secured debts, they wont repossess.

I have weighed up the pros and cons of fighting to keep the house or tossing the towel in and renting and to be honest, with the interest rates coming down and rents being so high, I'd probably be paying the same so rather than paying somebody else's mortgage for them by renting, I'd rather try to keep my own home.

If I do go ahead with bankruptcy, can the Official Receiver have any say in forcing me to rent. With the secured debt (including mortgage) totalling £220,000 and house currently worth about £210,000 at a push, can he do anything about it. From what I've read, as long as there isn't any equity in the property, he wouldn't bother selling it???

maxmycardagain

sparky25 wrote: »

Hi PP,

Thanks for the reply. That answered a huge question. I just assumed that all debts were taken in by the bankruptcy.

So as long as I maintain all payments on secured debts, they wont repossess.

I have weighed up the pros and cons of fighting to keep the house or tossing the towel in and renting and to be honest, with the interest rates coming down and rents being so high, I'd probably be paying the same so rather than paying somebody else's mortgage for them by renting, I'd rather try to keep my own home.

ah, but will YOUR interest rate fall? thats the question, and if so, enough to make a difference?

If I do go ahead with bankruptcy, can the Official Receiver have any say in forcing me to rent. With the secured debt (including mortgage) totalling £220,000 and house currently worth about £210,000 at a push, can he do anything about it. From what I've read, as long as there isn't any equity in the property, he wouldn't bother selling it???

the OR could decide your remaining repayments post-BR would still make you insolvent and that renting would be best for you

why not post a full (post-BR) SOA on here using this:-

http://www.makesenseofcards.com/soacalc.html

using figures as if already BR (i.e. leaving out unsecured debts/credit cards, etc.

peachyprice

sparky25 wrote: »

Hi PP,

Thanks for the reply. That answered a huge question. I just assumed that all debts were taken in by the bankruptcy.

So as long as I maintain all payments on secured debts, they wont repossess.

I have weighed up the pros and cons of fighting to keep the house or tossing the towel in and renting and to be honest, with the interest rates coming down and rents being so high, I'd probably be paying the same so rather than paying somebody else's mortgage for them by renting, I'd rather try to keep my own home.

If I do go ahead with bankruptcy, can the Official Receiver have any say in forcing me to rent. With the secured debt (including mortgage) totalling £220,000 and house currently worth about £210,000 at a push, can he do anything about it. From what I've read, as long as there isn't any equity in the property, he wouldn't bother selling it???

If there's no equity and you won't be saving any money by renting then no, it's extremely unlikley the OR would force you out of your home.

They don't make you homeless just for the sake of it, only if there is equity to take or if forcing you into rented means they can get an IPA.

However, if the OR did try to force you out and you refused he would then have to go to court to get a possession order, a judge would would be very unlikely to grant this if the only reason the OR wanted you out was to get an IPA.

So, although it can never be guaranteed 100% that an OR would not try to take your home you are in a very very good position to object, and win in the unlikley event you got a pig of an OR.

HTH

sparky25

Hi,

Have used the SOA as suggested and yes I could do it (i.e. pay the secured debt and mortgage).

Can somebody please tell me though, if secured debt does not form part of the bankruptcy, if I literally throw the towel and stop paying everything, end up losing the house etc, if the house were sold and it was done so at a loss, does the loss fall back to me or form part of the bankruptcy.

peachyprice

As soon as the house is repossessed the secured loans become unsecured and will be covered in your bankruptcy, together with any mortgage shortfall, regardless of whether this happens before or after you are BR, this will still apply even if you have been discharged.

So, in effect you can go BR to clear all your unsecured debts, stay in the house and see how it goes, if you eventually find you can't cope you can give the house up without being liable for anything once it's repossessed.

sparky25

Thanks for all the advice, all taken on board.

There are times when I think why bother, just throw the towel in and walk away. Clean slate if you like.

The biggest fear about going completely bankrupt is finding somewhere else to live. I've got 3 kids all at 3 different schools. Daughter has 2 years to go, youngest son has just started year 3. And they all come under 3 different councils in terms of the schools they attend.

I dont think my council would be very helpful if assisting me in finding accommodation and if they did, it would be on a very dire housing estate and would add more stress in terms of getting kids to school every day.

If I looked at housing myself, the private sector would cost about £1000 per month and I dont know if I would be entitled to any help towards rent, if a private landlord would rent to a bankrupt and inbetween being repossessed and finding somewhere to live, where would we go.

I could handle all the pressure of court etc and even losing my home by going bankrupt. There's a part of me that would see it as light at the end of the tunnel and knowing at least going forward that I might actually see some of the money I work hard for. Could even afford to treat the kids occassionally.

As it stands at the moment, I am in a deficit situation every month and its on my mind 24/7.

sparky25

Thanks for all the advice, all taken on board.

There are times when I think why bother, just throw the towel in and walk away. Clean slate if you like.

The biggest fear about going completely bankrupt is finding somewhere else to live. I've got 3 kids all at 3 different schools. Daughter has 2 years to go, youngest son has just started year 3. And they all come under 3 different councils in terms of the schools they attend.

I dont think my council would be very helpful if assisting me in finding accommodation and if they did, it would be on a very dire housing estate and would add more stress in terms of getting kids to school every day.

If I looked at housing myself, the private sector would cost about £1000 per month and I dont know if I would be entitled to any help towards rent, if a private landlord would rent to a bankrupt and inbetween being repossessed and finding somewhere to live, where would we go.

I could handle all the pressure of court etc and even losing my home by going bankrupt. There's a part of me that would see it as light at the end of the tunnel and knowing at least going forward that I might actually see some of the money I work hard for. Could even afford to treat the kids occassionally.

As it stands at the moment, I am in a deficit situation every month and its on my mind 24/7.

maxmycardagain

maxmycardagain wrote: »

why not post a full (post-BR) SOA on here using this:-

http://www.makesenseofcards.com/soacalc.html

using figures as if already BR (i.e. leaving out unsecured debts/credit cards, etc.

did you try that?