Bankruptcy Ramifications For My Other Half

Badger1875

Hi all, really need some advice as this will be obviously a huge step for me.

I have caused myself terrible problems all through my own stupidity over 3 years ago. I have over £40k worth of debts and I currently have a DMP running with the cccs but this will take about 48 years to clear my debts and I don't have enough disposable income for an IVA.

Bankruptcy seems my only avenue out of this and I know I should have done it 3 years ago rather than now but my OH is terrified of how it will effect her as we have a joint mortgage.

Could anyone please advise how much she will be affected because of this financial link when I go BR?

We have a Northern Rock mortgage which has an unsecured element and we are massively in negative equity now. And recently because of not having work we have some arrears

I know its a bit rambling but I really don't know which way to turn ie give up the house and rent for a few years until I/we can rebuild our credit status and start again without me being such an imbecile, I have learnt harshly from my mistakes!

Thanks everyone this is a great forum and its comforting to know im not on my own!

Badger

fiveyearplan

Welcome Badger! If you have any other joint account other than NR I would suggest you either close them or take your name off (you won't be able to do this if they overdrawn though). Without your other debts can you afford the mortgage and any secured debt? Do you want to keep the house?

Badger1875

Hi fiveyearplan

The mortgage is our only joint account, it costs us £750 a month including the unsecured part but if that goes into the BR pot would that mean she to has to go BR?

Its in negative equity and given the area I dont think it will recover much at all even if there was another boom so I really dont know wether we should cut our losses and go.

Plus we are getting married and its not big enough if we started a family so we would need to move eventually.

Badger1875

After trawling through many threads and using the search function it seems that my fiance will have to go bankrupt with me unless we just stop paying the mortgage and let the house be repossesed have I understood this correctly?

Sorry about all the questions folks but dark thoughts are clouding rational thinking

Merry_Gentry

Hi Badger :hello: Is the unsecured loan joint as well? As NR will chase your wife for the mortgage and the loan as well if it's joint. Can you keep up the payments once your other debts are gone?

Badger1875

We could at a push but the house is in such bad negative equity that I cant see it ever recovering, we have discussed it and although its not her debt causing this although she does have a cc with a 12k balance we feel it is the best option to wipe the slate clean and learn from past mistakes.

Merry_Gentry

Your wife needs to get individual advice to see if bankruptcy is the best option for her. If the unsecured loan is joint as well, then she will be chased for that. However, if she buys the BI in your property (which she would probably be able to do if it's in negative equity) then potentially you could sit tight until you are ready to get married, etc sell it and move on. If you both go bankrupt the chances of you being able to get another mortgage within six years is slim to none.

Badger1875

Thank you for the replies.

If she were to take it on would a proportion of the unsecured part of the mortgage be included in my BR?

Sorry all for the rather stupid questions

Merry_Gentry

If it's not joint (which I don't think you've answered yet ) then the unsecured loan would go into the bankruptcy. If it's joint, she would need to keep paying that as well as the mortgage.

Badger1875

Sorry, yes the unsecured element of the mortgage is also joint.

If she attempts to buy my BI won't she be affordability checked? This will be the next spanner in the cog. I'm lucky she has been so forgiving so far tbh

Merry_Gentry

She needs to be able to afford both the mortgage and the unsecured part because they will fall to her as soon as you go bankrupt. With regard to buying the BI, if your house is in negative equity I believe it's just over £200 so I don't think they will credit check her for that.

Obviously the big decision has to be whether or not you want to keep the house. But first and foremost, she needs to get financial advice for her situation.