Discharged Bankrupt and still being chased

basher123

I was made Bankrupt in Nov 2006 for 1yr. I was discharged in Nov 07. My Bankrupsy was due to a failed business venture which I had re-mortgaged to help keep going. My mortgage was not part of the Bankrupsy although just before my 1yr was up I had to hand the keys back to the house as I could not keep up repayments.

I haven't heard anything since I handed back the keys but I do know the house was sold on. Today I received a letter from a debt collecting agency demanding 40K on behalf of the mortgage company.

I don't own my own home now - in fact I own very little. Is ther anything they can do?

Banny123

MissKJ

Bumping you up basher 123, forum is very busy tonight

basher123

was almost 500K - Too much for me ever to repay

fermi

Talk to your old OR/trustee.

The shortfall on the property should still fall into the bankruptcy.

See: If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?

Question: If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?

Answer: A debt which is secured by a mortgage or a charge on a property is still a provable bankruptcy debt. The mortgage loan company is "a secured creditor" which means they have rights over an asset, the house, and can require the asset to be sold to pay their debt.

These rights are not affected by the bankruptcy. On the making of a bankruptcy order the mortgage loan company could make a claim in the proceedings but, unless it wished to give up the security, could only claim for any (estimated) shortfall.

If you continue to live in the property it is likely that you will continue to make payments to the mortgage loan company to avoid the property being re-possessed. When the property is eventually sold any shortfall to the mortgage loan company is still a provable debt in the bankruptcy, even if you have been discharged, as you are released from the debt on discharge.

Your bankruptcy does not affect the obligations of any joint owner who has not been made bankrupt to repay the mortgage loan debt or any shortfall, as they are still liable for the whole of the debt.

After the date of the bankruptcy order the mortgage loan creditor may ask you to sign a "deed of acknowledgment" of the outstanding debt. If you have signed such a deed the mortgage loan creditor can take action against you to recover any shortfall following the sale of the property.

You will get more help on the bankruptcy board. I will move this.