Ask a CCCS counsellor a bankruptcy question

newme2010

I posted the message below on the bankruptcy board, but have not as yet had any response. I would be grateful if anyone with any experience/knowledge of situations similar to mine could give some advice:

Hi anyone reading this – if there are any credit report/bankruptcy/ property/insolvency experts out there – please read this + if you have any advice, please share your knowledge!

I declared myself bankrupt in 2010 after borrowing too much money when the banks were just throwing it at people. Entirely my own fault, and I am much, much more careful these days. I would NEVER live beyond my means again. Lesson well and truly learnt.

My house is worth significantly less than I owe on it (thanks NR & 120% mortgages), but it is covered in my BR as I declared it as a debt in 2010 . The ?beneficial interest belongs to the OR, who can sell it any time if they want until Feb 2013 (when I think they return it to me). This is unlikely as it is likely to sell for a lot less than 108K before they return to me (I estimate £90k as an optimistic offer), therefore having at least an £18K shortfall. I was told that Northern Rock (NR) might cover some of the shortfall as it was their fault they lent me that amount in the first place, but am yet to speak to them about this. I was also told that I could probably port my 100% together mortgage, and just borrow on a property of the same amount. But I am not sure either of these clauses will be true for me following BR in 2010.

My options are:
1. Continue to pay mortgage & stay put, selling up in few years when prices have recovered enough to break even.
2. Voluntarily return property to NR & rent flat somewhere cheaper to save for deposit on place when BR off record & I can get a mortgage for scratch

Trouble with option 1 is this: this was the plan when my ex and I were still together. We were going to live happily ever after in the property. We split last year (!), so now whilst I am fond of my little house (it was always in my sole name), I don’t want to live in that area for too much longer as it is 20 miles from my family & friends. We are still good friends, so I intend to discuss my plans with him, as he is the only one who knows about my BR. Looking at how the property market is going, I don’t think I could break even in less than 5 years.

I bought in 2006 for £100k, borrowed more secured debts with NR’s helpful up to 120% value loan (!) to now owe £108K. Properties in the street are currently marketed for £99K-105K, and they have proper central heating. I have original 1970’s ducted air, and would most likely need to reduce price because of it, or install new system. Neither of which I can afford to do (quoted ~£5K). So even at an optimistic sale of my house at £90K, that is still a £18k deficit. Add selling/moving fees etc., and you’re talking a cost of £20k at least. But I cant sell now, as the beneficial interest (or whatever it is called) is with the OR until at least Feb 2013. I am not going to pay the fees to buy it back, to then saddle myself with the deficit. I/we originally planned to take advantage of flat housing market to let me keep house until OR revest interest to me then live there forever!

Option 2 is sounding more appealing as I typed the background info to option 1 above! As the interest in the property is with OR (I mean their dedicated company/dept who deals with negative equity properties – cant remember what is called) I think I can give it back to the bank and walk away, as the deficit from any sale will be included in my BR of 2010 (I included the house details in my petition). I plan to rent somewhere cheaper and save like mad, so when I am able to get back on property ladder, I have a decent deposit, so will not be in as risky place again. But, I am in the middle of correcting my credit report with Experian (some BR debts were still showing balances owed, when they should have cleared) so don’t want to just stop paying NR and have more defaults on my record, as I am now 2+ years since my last default around the time of my BR, and want to continue with a clean slate, so to speak.

My questions are:
a. Can I just give back the property to NR? Is this because interest lies with OR, or could I just do it anyway?
b. Can I continue to pay NR until the hand-back is complete to avoid defaults? Will I be liable until it is sold, or would the difference from hand back to sale, just be included in BR total debt?
c. Are there mortgages available to a now solvent previously BR person who has good deposit Eg. Can I get one at higher interest% then switch when have proven self if need be?
d. Am I mad to step off property ladder, even though staying on it will just cost me money, when I don’t really want to live where the property is?
e. What d I tell my family about moving out of mortgaged home into rented without having to tell whole BR story? (they will only worry – its not so much about my pride, although I would rather not have to tell anyone, ever!!)

Any thoughts are gratefully received – has anyone been in a similar situation?

I plan to speak to NR about how long it takes to complete voluntary repossession process, CCCS re impact on my credit score (which is just starting to look a bit better), OR about the voluntary repossession & interest in the property etc. but if anyone can offer any advice it might help me make the decision more quickly, I would be very grateful.

Thanks Chris x

StepChange_Pavan

newme2010 wrote: »

I posted the message below on the bankruptcy board, but have not as yet had any response. I would be grateful if anyone with any experience/knowledge of situations similar to mine could give some advice:

Hi anyone reading this – if there are any credit report/bankruptcy/ property/insolvency experts out there – please read this + if you have any advice, please share your knowledge!

I declared myself bankrupt in 2010 after borrowing too much money when the banks were just throwing it at people. Entirely my own fault, and I am much, much more careful these days. I would NEVER live beyond my means again. Lesson well and truly learnt.

My house is worth significantly less than I owe on it (thanks NR & 120% mortgages), but it is covered in my BR as I declared it as a debt in 2010 . The ?beneficial interest belongs to the OR, who can sell it any time if they want until Feb 2013 (when I think they return it to me). This is unlikely as it is likely to sell for a lot less than 108K before they return to me (I estimate £90k as an optimistic offer), therefore having at least an £18K shortfall. I was told that Northern Rock (NR) might cover some of the shortfall as it was their fault they lent me that amount in the first place, but am yet to speak to them about this. I was also told that I could probably port my 100% together mortgage, and just borrow on a property of the same amount. But I am not sure either of these clauses will be true for me following BR in 2010.

My options are:
1. Continue to pay mortgage & stay put, selling up in few years when prices have recovered enough to break even.
2. Voluntarily return property to NR & rent flat somewhere cheaper to save for deposit on place when BR off record & I can get a mortgage for scratch

Trouble with option 1 is this: this was the plan when my ex and I were still together. We were going to live happily ever after in the property. We split last year (!), so now whilst I am fond of my little house (it was always in my sole name), I don’t want to live in that area for too much longer as it is 20 miles from my family & friends. We are still good friends, so I intend to discuss my plans with him, as he is the only one who knows about my BR. Looking at how the property market is going, I don’t think I could break even in less than 5 years.

I bought in 2006 for £100k, borrowed more secured debts with NR’s helpful up to 120% value loan (!) to now owe £108K. Properties in the street are currently marketed for £99K-105K, and they have proper central heating. I have original 1970’s ducted air, and would most likely need to reduce price because of it, or install new system. Neither of which I can afford to do (quoted ~£5K). So even at an optimistic sale of my house at £90K, that is still a £18k deficit. Add selling/moving fees etc., and you’re talking a cost of £20k at least. But I cant sell now, as the beneficial interest (or whatever it is called) is with the OR until at least Feb 2013. I am not going to pay the fees to buy it back, to then saddle myself with the deficit. I/we originally planned to take advantage of flat housing market to let me keep house until OR revest interest to me then live there forever!

Option 2 is sounding more appealing as I typed the background info to option 1 above! As the interest in the property is with OR (I mean their dedicated company/dept who deals with negative equity properties – cant remember what is called) I think I can give it back to the bank and walk away, as the deficit from any sale will be included in my BR of 2010 (I included the house details in my petition). I plan to rent somewhere cheaper and save like mad, so when I am able to get back on property ladder, I have a decent deposit, so will not be in as risky place again. But, I am in the middle of correcting my credit report with Experian (some BR debts were still showing balances owed, when they should have cleared) so don’t want to just stop paying NR and have more defaults on my record, as I am now 2+ years since my last default around the time of my BR, and want to continue with a clean slate, so to speak.

My questions are:
a. Can I just give back the property to NR? Is this because interest lies with OR, or could I just do it anyway?
b. Can I continue to pay NR until the hand-back is complete to avoid defaults? Will I be liable until it is sold, or would the difference from hand back to sale, just be included in BR total debt?
c. Are there mortgages available to a now solvent previously BR person who has good deposit Eg. Can I get one at higher interest% then switch when have proven self if need be?
d. Am I mad to step off property ladder, even though staying on it will just cost me money, when I don’t really want to live where the property is?
e. What d I tell my family about moving out of mortgaged home into rented without having to tell whole BR story? (they will only worry – its not so much about my pride, although I would rather not have to tell anyone, ever!!)

Any thoughts are gratefully received – has anyone been in a similar situation?

I plan to speak to NR about how long it takes to complete voluntary repossession process, CCCS re impact on my credit score (which is just starting to look a bit better), OR about the voluntary repossession & interest in the property etc. but if anyone can offer any advice it might help me make the decision more quickly, I would be very grateful.

Thanks Chris x

Hi Chris,

We can’t give you financial advice on which is your best step as we’re not qualified to do this.

It’s difficult to say what mortgages will be available to you once your bankruptcy has dropped off your file, but if asked you will have to say that you’ve been declared bankrupt in the past. I can’t say how likely it is that this will affect you in years to come.

It would be best to continue to pay the mortgage if you wanted to avoid defaults, but it’s best to speak with your OR to confirm what would happen either way.

I hope this helps to answer some of your questions.

Kind regards,
Pavan

soontobesensible

Hello there,
I'm bordering on bancruptcy at the moment and wonder if you would give me some advice? I am a nurse and I was wondering if I did become bankrupt would I lose my job as I am told some professions do?:( I am already in a DMP but I owe £2000 to a friend who will need the money as soon as possible. I will have to think about using a mortgage payment and a payment to a secure loan to pay him back. If I can sort this out then I will be able to get on with my life and start getting in the black. Is there anyway I can get a reasonable loan from somewhere even though I am on a DMP because if I did I would not have to lose my home. Also (I've nearly finished) how many payments do I have to miss of mortgage and secured loan before they reposess my home?
Thank You!:(

newboy11

Hi everyone,

I just want an advise or hear your views. I am in debt just over 34k - this is only CC and personal loan ( 3 Crditors ). I have also got a mortgage which I took 2 years ago 132k and now Bal on it 109k. Got a car 12yrs old. Up until now I have never defaulted on payment to creditors. I live on my own and had two kid with ex. I am desperately concerned about the debt and has caused me sleepless nights and even affect me in work as I kept thinking about it. I am now cosidering a possible going Bankruptcy if this will help. But also serverely worried if I do will loose my house which can be put up for sale?
Experts out there can you please advise if this will be the case, as I am worrying about it all day and night. Any advise will be highly appreciated. Thank you

System

soontobesensible wrote: »

Hello there,
I'm bordering on bancruptcy at the moment and wonder if you would give me some advice? I am a nurse and I was wondering if I did become bankrupt would I lose my job as I am told some professions do?:( I am already in a DMP but I owe £2000 to a friend who will need the money as soon as possible. I will have to think about using a mortgage payment and a payment to a secure loan to pay him back. If I can sort this out then I will be able to get on with my life and start getting in the black. Is there anyway I can get a reasonable loan from somewhere even though I am on a DMP because if I did I would not have to lose my home. Also (I've nearly finished) how many payments do I have to miss of mortgage and secured loan before they reposess my home?
Thank You!:(

Hi and thanks for your message.

It sounds like you would benefit from some free and impartial advice.

You’d need to check the terms and conditions of your employment regards bankruptcy. You could also try and speak to HR or possibly your union (if you are in one).

As you’re already in a DMP I’d recommend you speak to the company or charity that administrates your DMP. We administrate DMPs free of charge and we would never recommend missing any payments from your mortgage. We also wouldn’t advise taking out any further lending.

I’d recommend that you give us a call for some free and impartial advice. Our free Helpline is on 0800 138 1111. We’re open Monday to Friday 8am - 8pm and Saturday 9am until 3.00pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

Once we have looked at your situation in detail there could be other solutions available to you that you have not yet considered.

I hope this helps.

Kind regards,

Mat

System

newboy11 wrote: »

Hi everyone,

I just want an advise or hear your views. I am in debt just over 34k - this is only CC and personal loan ( 3 Crditors ). I have also got a mortgage which I took 2 years ago 132k and now Bal on it 109k. Got a car 12yrs old. Up until now I have never defaulted on payment to creditors. I live on my own and had two kid with ex. I am desperately concerned about the debt and has caused me sleepless nights and even affect me in work as I kept thinking about it. I am now cosidering a possible going Bankruptcy if this will help. But also serverely worried if I do will loose my house which can be put up for sale?
Experts out there can you please advise if this will be the case, as I am worrying about it all day and night. Any advise will be highly appreciated. Thank you

Hi newboy11 and welcome to the forum.

It sounds like you would benefit from some free and impartial advice.

We’d need a few more details about your situation before we could advise on what the best solution is. If bankruptcy is the best advice we have a dedicated team that can assist you free of charge. Depending on your situation there could be other solutions that you have not considered yet.

The first thing to do is visit our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our free Helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm and Saturday 9am until 3.00pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

You’ve taken the first step to sorting out your money worries and we can support you with free and impartial advice along the way.

I hope this helps.

Kind regards,

Mat

newboy11

CCCS_Mat,

Many Thanks. I will make a call yo the CCCS as I am in need of a help.

soontobesensible

Thank you so much for the advice you gave me in my last post. Wonder if I could ask you, would my secured loan lender try to make me bankrupt if I handed my home back to the mortgage company? I need to move to a differant town from the one I now live in so that I can be nearer my work. They won't let me sell my house???

wek21

Hi, my boyfriend went bankrupt 12 months ago and has now been discharged. I own my house (with mortgage) and he currently pays me rent. In the next couple of years we'd like to move somewhere bigger. Between our two joint salaries we would be able to afford to do that, but can you tell me whether applying for the mortgage with him is going to make it harder/impossible for us to get one? Am I better basing it just on my salary? If we did that we won't be able to get a house the size we would like I don't think, or is it possible that if we make quite a lot on my house we could use that as a large deposit and that might enable us to borrow more? I know my mum would be able to help us too, but I'm not quite sure how - could I put her down on the mortgage even though she won't be paying towards it? Or if she gave us money towards our deposit would that help? Thank you!

emperess

Hello

Please help.

What is better, to have lots of ccjs paying them off an £1 per month (hopefully £1) for the rest of my life or bankruptcy, I fully understand all the implications of bankruptcy and am now seriously considering this. I cannot get into more details for now, but was wondering which one is worse? In a way it does not matter because my credit record is already rubbish now, and I NEVER want credit again.