Voluntary reposession and bakruptcy and divorce

Doglover

Hi all, I have a friend coming over tomorrow eve to have a frank chat about the state of his finances. I thought I'd try and get a few helpful hints to pass on from those who have experienced and those experiencing repo and BR. I hope this is the correct place for the post, apologies if not.

From what i know so far he and his ex have approx the same amount of debt (inc mortgage) as their house was valued at approx one year ago. They haven't had it re-valued since but I'm pretty certain it's over priced now.

My first set of questions relates to voluntary reposession. Does anyone know answers to the following:

1) does vol repo automatically end in br or is it something that generally goes hand in hand? I wonder if he could consider an IVA (for reasons connected to work) with vol repo?

2) in addition to the mortgage they have various secured debt - would the additional charges on the property prevent vol repo and where would he stand with the other debt?

My friend's job may not allow him to declare himself br so the first thing he'll need to check is whether he would be able to keep his job if he went for br. Any experiences of that from anyone?

Now onto the br or iva questions - he and his ex have various secured and unsecured debts. If he were able to keep the house on somehow does anyone know if loans etc in joint names can be transferred into just one of their names?

I suspect he'll end up with only a few alternatives but as he and the ex are getting divorced and have children he is keen to safe guard a secure home for the kids.

If the two of them have equal custody of their children and earn the same and have the same outgoings is it likely that neither will be asked to the pay the other maintanence?

Sorry for such a rambled bunch of questions but I am trying to guess about his situation a bit so I am armed with a bit of info for tomorrow.

Any help whatsoever would be appreciated. I will obviously advise him to call one of the debt charities but as he is only just facing his problems he wants a bit of a heads up before he confronts it once and for all.

Thank you :rolleyes:

Doglover

Please can someone give me an idea or further explanation about how the income attachment order to br is assessed?

Thanks again

Lensman_2

There is no income attachment order. If you go bankrupt, you pay directly yourself if an IPA/IPO is required. You will probably get a nil tax code.

1. Voluntary repossession does not mean bankruptcy. The two things are independant. Depending on the circumstances, repossession can create a big debt. It is this debt that some people go BR with.

2. One the house is repossessed and sold, the mortgage and any other secured loans become unsecured. So the previously secured loan simply becomes part of the big debt. The secured loan does not prevent voluntary repossession.

Does he have any other legal charges on the property (e.g. a charging order?)

You need to tell us what the job is before advice can be given...

If the mortgage is in joint names and one goes BR, the other party becomes fully liable. This may well mean that they will both have to go BR.

Hope this helps.

LM

So_Sad_Angel

Hi DL

What a good friend you are. TBH though I would advocate caution in offering solutions to your friend. Best to discuss his situation & get an understanding but refer him to a debt charity & this site & let him research his own solution. You will be there as support & its really great to have a friend who can do that.

All situations are different & BR is very much the last resort....different people see it in different ways & although from the info you supplied it could be an option you must excercise caution in case he later comes back at you.

We all on this forum are at different stages & indeed not all of us are BR...(even though we are regulars!!) ....maybe get him to register & post a thread himself & that will encourage him to realise that there is a solution...whatever that may be.

Angiex

Doglover

Lensman wrote: »

There is no income attachment order. If you go bankrupt, you pay directly yourself if an IPA/IPO is required. You will probably get a nil tax code.

1. Voluntary repossession does not mean bankruptcy. The two things are independant. Depending on the circumstances, repossession can create a big debt. It is this debt that some people go BR with.

2. One the house is repossessed and sold, the mortgage and any other secured loans become unsecured. So the previously secured loan simply becomes part of the big debt. The secured loan does not prevent voluntary repossession.

Does he have any other legal charges on the property (e.g. a charging order?)

You need to tell us what the job is before advice can be given...

If the mortgage is in joint names and one goes BR, the other party becomes fully liable. This may well mean that they will both have to go BR.

Hope this helps.

LM

Hi, he is a police officer. The mortgage is in their joint names (as is most of the debt). Any further info on contribtions to the br? i understand that he'd have to contribute for 3 years - is that right? If so, any ideas on typical amounts?

Sorry to be slow - but are you saying that even if there are charges against the property (in total, inc mortgage that, in total exceed the sale price) they would still be able to sell the house? Does that mean they can market their house for less than the debt they owe?

Thank you

Doglover

So_Sad_Angel wrote: »

Hi DL

What a good friend you are. TBH though I would advocate caution in offering solutions to your friend. Best to discuss his situation & get an understanding but refer him to a debt charity & this site & let him research his own solution. You will be there as support & its really great to have a friend who can do that.

All situations are different & BR is very much the last resort....different people see it in different ways & although from the info you supplied it could be an option you must excercise caution in case he later comes back at you.

We all on this forum are at different stages & indeed not all of us are BR...(even though we are regulars!!) ....maybe get him to register & post a thread himself & that will encourage him to realise that there is a solution...whatever that may be.

Angiex

I doubt he'd post on here but I will ask him. I know he spoke to Cccs today and i certainly don't intend giving his advice to follow - just my thoughts. Thank you for flagging that up though - I do agree.

So_Sad_Angel

Hi DL

Your friend may need to check that he can petition for bankruptcy & keep his job. I think Police is one of those professions with `no br` clause in their contract....needs clarification either by union or checking terms of employment.

Sorry can`t answer house query.

Angex

Doglover

So_Sad_Angel wrote: »

Hi DL

Your friend may need to check that he can petition for bankruptcy & keep his job. I think Police is one of those professions with `no br` clause in their contract....needs clarification either by union or checking terms of employment.

Sorry can`t answer house query.

Angex

I think he has been given the green light to go br as his particular dept are not "corruptable" but to be honest he is the least likely person I know to be corrupted.

All help is genuinely appreciated, thank you x

Doglover

Lensman wrote: »

There is no income attachment order. If you go bankrupt, you pay directly yourself if an IPA/IPO is required. You will probably get a nil tax code.

1. Voluntary repossession does not mean bankruptcy. The two things are independant. Depending on the circumstances, repossession can create a big debt. It is this debt that some people go BR with.

2. One the house is repossessed and sold, the mortgage and any other secured loans become unsecured. So the previously secured loan simply becomes part of the big debt. The secured loan does not prevent voluntary repossession.

Does he have any other legal charges on the property (e.g. a charging order?)

You need to tell us what the job is before advice can be given...

If the mortgage is in joint names and one goes BR, the other party becomes fully liable. This may well mean that they will both have to go BR.

Hope this helps.

LM

In theory then, if they voluntarily handed back the keys and the property got sold would the remaining mortgage that they'd be left with be for the whole amount, or the balance of what is owed after the sale price has been deducted? if that were the case, would the remaining mortgage debt and previously secured loans then become unsecured and capable of IVA? Would they be allowed to do Vol Repo and the property be sold with the secured debt attached? I assume the secured debt will have a charge on the property - is that not always the case?

Lensman_2

Doglover wrote: »

In theory then, if they voluntarily handed back the keys and the property got sold would the remaining mortgage that they'd be left with be for the whole amount, or the balance of what is owed after the sale price has been deducted? if that were the case, would the remaining mortgage debt and previously secured loans then become unsecured and capable of IVA? Would they be allowed to do Vol Repo and the property be sold with the secured debt attached? I assume the secured debt will have a charge on the property - is that not always the case?

They would be left with the balance of the mortgage and loan once the sale has gone through.

Yes, the outstanding becomes unsecured. But IVAs are usually only advised over BR if people want to retain their property. IIRC, they last longer (5 years) and the living allowances are less.

Voluntary repossession can still occor even if there is a charging order on the property. Although I don't think you meant that. Otherwise a charge simply means it is secured.

Doglover

Lensman wrote: »

They would be left with the balance of the mortgage and loan once the sale has gone through.

Yes, the outstanding becomes unsecured. But IVAs are usually only advised over BR if people want to retain their property. IIRC, they last longer (5 years) and the living allowances are less.

Voluntary repossession can still occor even if there is a charging order on the property. Although I don't think you meant that. Otherwise a charge simply means it is secured.

Right, I think i understand. Thank you again. So, if they handed the keys back it would be the mortgage company who sell the property at whatever they think they can get. What ever balance is left would be combined with all other unsecured debt for them both to deal with. Is that correct?

If they decided to sell their house for a figure lower than the debt owed (for example debt is £200K and they sell for £50K) the land reg would allow the property sale to proceed regardless of the charge on the property for the mortgage - is that correct? It would be up to them to find the balance in order to repay the mortgage - am i right? Would the mortgage company expect immediate settlement of the total outstanding once the house has sold (because presumably the asset that they agreed to lend on would no longer be there).

In your opininion would they be better to try and sell the property themselves rather than vol repo? I have heard stories of mortgage companies selling far lower than you could yourself.

The mention about the poss of an iva after selling the house links back to the job - as i said I think he has approval to go br but I am thinking of a potential back up plan if the employers withdraw their authority.

Also, as it's in their joint names, if he went br - would she be left in a position where she is being chased for all their debt unless she goes br too?