Question regarding mortgage

IamSheb

Hello all, I declared myself bankrupt earlier this year and the official receiver decided that since there was no equity in my house (owned solely by myself) that they had no interest in selling it.

I have since written to my mortgage company to ask when they would like me to vacate the property & return it to them and they have replied stating that they expect that the mortgage account (currently £3,000 overdue) will be brought back to date or an agreement made to clear the arrears on a monthly basis, and that the bankruptcy does not effect my obligations under the mortgage agreement...


I'm confused! It seems they think that the bankruptcy does not include them - are they just trying to see if they can squeeze something out of me?
Any advice greatly appreciated as this has me somewhat worried..

DON79

Hi, your mortgage company at this stage is correct. They are not affected by your bankruptcy. The arrears in your mortgage would only be included in your bankruptcy if you did give up the property for voluntary repossession and only then be included once the house had actually been sold after repossession. Then any shortfall on your mortgage including arrears could be included as part of your bankruptcy. I hope this answers your question.

Are you going to give up the house for repossession? If not and you want to keep the house, then you would need to make a payment arrangement to bring any arrears up to date am afraid.

Donna

IamSheb

Hi Donna thanks for the fast reply. I'm quite happy to give the property back to them. It sounds like I should be ringing them on Monday and asking about voluntary reposession.

How would the process work? I certainly hope not to be paying them (indeed i have nothing to pay them with) and had thought that this would be included originally in my bankruptcy

DON79

Hi, try a search on this forum under voluntary repossession, you will come across a few threads about it.

Write a letter saying that you wish to give the house up for voluntary repossession - DO NOT SIGN IT - sorry for the caps but this seems to be important - you must not sign the letter or sign anything from the mortgage company which confirms your liability for the balance owed even after repossession. Sometimes mortgage companies try to get you to admit you are liable for the balance owed even after repossession and bankruptcy, but you must not admit liability.

I will see if I can find a template letter for you to use and post it up.

If you are certain you don't want the house, then there is no point at all continuing with mortgage payments. It will be included once the house has gone so don't worry too much.

IamSheb

Thanks very much Donna, I'll read up on the whole thing this weekend, doesn't sound so bad from the short read through I've just had..
Did have a short heart attack when I initially read the letter...

IamSheb

Hello all, I followed the advice in the thread above and sent a letter to my mortgage company along the lines of please vountarily repossess the property.. So far I have heard nothing.

I am now more than half way through my bankruptcy period and expect to be released in the next 6 months.

If the mortgage company hasn't repossessed by then, will the debt still be rolled up into my bankruptcy?

What I really don't want to happen is to be discharged and then get a letter the week after from the mortgage co telling me i owe them a ton of money and the BR still had no effect on them...
anyone?

tigerfeet2006

Yes it would be included in the BR even if it is sold after you are discharged.

Just make sure you don't sign anything from them.

IamSheb

Yep - definately not going to, they have the letter so the ball is in their court now. I just wanted to be 100% sure that they couldn't mess me around by selling late or any other action..

GettingHopeful

I didn't understand this either and held onto the property even though I'd moved out, expecting the OR to do something. In the end I wrote to the mortgage company enclosing the keys, sent it by special delivery and they repossessed within a few days. It was my own letter, and I did sign it, and I instructed them to send any funds over or shortfall with a statement to the OR. I didn't receive or sign their form.

It's now been sold, and there is a massive shortfall. The OR confirmed this would go into my BR.

All the best, the authorities hedge about and don't give you a straight answer of this one - or they didn't me.