Advice on my situation

smulx

So, I'll explain everything and hopefully someone can give me some advice. I have a joint mortgage with an ex partner who no longer lives here, but still pays a contribution to the mortgage payments. I have a £9,000 loan which is in my name, taken when the house was purchased. I then have around £3,000 of credit card debt.

I've just lost my job due to redundancy and I'm having a really hard time finding something else. I'm getting my redundancy pay at the end of this month which will be enough to live on for a few months but this doesn't seem like a very good idea...

I can try to live off my redundancy and whatever benefits I'm entitled to, but while doing this I'll be putting myself in to more and more debt until I'm left with absolutely no money at all and I'll likely have to declare BR eventually. After I've done this I'll be left with absolutely no money because I've have been struggling to scrape together every penny I could just to get by and pay the bills.

This was my idea, I'm just not sure what problems could arise from it... When I receive my redundancy pay, I just take the cash out of the bank, cancel all my DD's, leave the house and file for BR. I can give the money I have to my mum to look after, and this way I'll actually have something to get myself started again. I'll just make up some story about what happened to the money so no one can try and get it to pay any debts.

Would this be possible? Will they auction off the house and make me pay the difference between the mortgage value and the auction amount? And if I declare BR, how will this benefit me and what will I still have to pay?

I'm not in a very bad situation at the moment, but I know I will be eventually and I feel like I should act now.

StuntmanBob

I really don't recommend trying to hide the redundancy money with your mum. If you go bankrupt, the Official Receiver will ask what happened to the money and trying to "make up a story" really isn't a good idea in my opinion. I think you'll get found out and that will be much more of a problem as you'll end up with a Bankruptcy Restriction Order which basically extends the restrictions of bankruptcy beyond the statutory 12 months. I think you'd find that a real pain.

If I were you, I'd use the money to pay off some of what I owe on the credit cards.

Your debts are not huge and it'd be a real shame to have to go bankrupt for only £12,000. Are you sure you can't cut back and try to work through it? Bankruptcy really isn't a picnic, believe me!

Is there any equity in the house? Can you sell it?

If you call the loan company they might even give you a payments holiday for a few months until you find another job.

smulx

The house is worth a lot less than when we bought it. The mortgage is due for renewal in 12 months and I'd be unable to get a mortgage just in my name, but I wouldn't want to even if I could because I don't want the house. My friend is living with me at the moment and he's paying for a room. This money combined with money from my ex allows me to afford to pay eveything. My friend is moving out and I don't know anyone else that can move in.. I physically wouldn't have enough money just to pay basic bills even if I was still working.

I don't see how I could 'work through it' with no job and no money? It's not just the 12,000 debt, it's the house too which has lost significant value which is why I can't sell it. Also, the early settlement fee for the mortgage is very high. As for the redundancy money, if I simply said I owed people money, I don't see how they could disprove that.

december

It wouldn't be a case of disproving that you owed people money, more that you would be favouring creditors. I was given some money 12 months before I went BR so what I did was use the money for living expenses, nothing huge things like house/car insurance, new glasses and to make sure that I could explain how exactly the money had been spent. I wouldn't personally give it to a relative as the OR will see that the money has come into the account and that it's gone back out and will want an explanation where it has gone.

December

StuntmanBob

smulx wrote: »

I don't see how I could 'work through it' with no job and no money?

Fair enough. I'm sorry there's no easy answer to that. I suppose what I meant was that if you're *almost* managing then maybe a few cutbacks would get you back on track. But if you're *not* managing at all then I apologise because my comment probably seemed pretty insensitive!

My own situation was that if I had gotton a grip a few years ago, stopped spending on stuff I didn't need and couldn't afford, then I wouldn't now be bankrupt. But I let the situation continue and I deeply regret that. I hate being BR - it sucks. I'd advise anyone to try to avoid the mistakes I made - and that was the purpose of my post.

On the house situation, sorry I have no advice to offer.

fiveyearplan

I would also suggest speaking to your ex because if you do go BR it will have a big impact on him as the shortfall from the house will all go to him.

smulx

My ex is a girl haha. I'm going to discuss it with her once I've got the information I need. We're going to have a really hard time selling the house when it comes to it in 12 months. It's worth a lot less than the mortgage and we don't have the money to carry out repairs that need to be made.

fiveyearplan

Sorry - I couldn't tell and hedged my bets (obviously the wrong way!).

The mortgage doesn't just finish in 12 months I'm presuming that is when your fixed deal runs out? However if you have split it is best to sever all things financial. How much shortfall do you think you will have? I'm assuming that neither of you can afford/want to have the house by yourself?

smulx

I'm a guy, just to clarify Unfortunately I was the financially responsible one in the relationship which is why the loan is in my name and not hers.

I'm not sure on the exact shortfall, it could be as much as 20,000. I'm completely screwed either way, I'd just prefer to do something about it now, on my terms, instead of being forced in to it when I literally can't afford to live any more.

fiveyearplan

What area of work do you do? If you are having difficulty finding a job and don't think you could secure employment to pay the mortgage and bills then it does look like you could be a candidate for BR. It has to be your decision though. Have you spoken to any of the debt charities?

smulx

I haven't spoken to anyone yet, I'm just considering my options. I'll do any work, I'm just having trouble finding anything that doesn't require experience for the same money I was on before. I was only getting £15,000 a year but thats what I need to be able to live comfortably. With my friend moving out though, this wouldn't even allow me to get by like I've been doing. Even if I found a way to make it through the next year, I'd just end up in serious trouble with the house.