Help with property and going bankrupt please!

PH1LL

Hello,

I have parted company with my ex wife, although we are not yet divorced.


My financial situation is not good and i am considering going bankrupt.

We bought a flat in 2006 which is currently in neg equity, the mortgage is £117000 and the value is £11000 max.

She now lives there on her own, and has been paying the mortgage for a good few months now.

I know that with the neg equity in the property, when i go bankrupt she can buy my half of the negative equity for £1 plus £211 court fees - is this definate? Whats the three year thing? Is it possible and if so how likely that the OR will delay this incase proprty prices recover?

Also will she need to renegotiate a new mortgage with the mortgage provider? (abbey) Or will they let her keep paying the mortgage - like she has been for a number of months now.

The current deal is a open ended tracker at 0.59% above base ona interest only mortgage. She wont be able to remortgage as only earns £21k per year.

I dont want my bankruptcy to take her home away.

Many thanks for you help

Phill

nervousmother

PH1LL wrote: »

Hello,

I have parted company with my ex wife, although we are not yet divorced.


My financial situation is not good and i am considering going bankrupt.

We bought a flat in 2006 which is currently in neg equity, the mortgage is £117000 and the value is £11000 max.

She now lives there on her own, and has been paying the mortgage for a good few months now.

I know that with the neg equity in the property, when i go bankrupt she can buy my half of the negative equity for £1 plus £211 court fees - is this definate? Whats the three year thing? Is it possible and if so how likely that the OR will delay this incase proprty prices recover?b yes she will be able to buy the BI, the OR has 3 years to deal with any property. If he has not dealt with it within 3 years it will revert back to you anyway. It is rare for ORs to leave it until that time, they want the paperwork gone.

Also will she need to renegotiate a new mortgage with the mortgage provider? (abbey) Or will they let her keep paying the mortgage - like she has been for a number of months now. She will carry on paying the mortgage as she is now, your name will still be on the mortgage but if the property is sold you wont have to pay the shortfall it will have to be paid by your ex. The BI is the rights to any future equity.

The current deal is a open ended tracker at 0.59% above base ona interest only mortgage. She wont be able to remortgage as only earns £21k per year. She wont have to remortgage

I dont want my bankruptcy to take her home away.

Many thanks for you help

Phill

Posted some answers above, I think she will be safe during your BI. You will need to get 3 estate agent valuations to proove the value of it.

PH1LL

Hello - thanks for your reply.

Will the mortgage provider have to be informed?

I know you say that she wont have to remortgage - why is that?

Thanks

Phill

nervousmother

No the mortgage provider will not need to be informed, it is a secured loan and as such is not covered by your BR anyway.

Your name will still stay on the mortgage, it is complex but if she can continue to pay she can, if she gets to the point where she cant pay for it they will begin to chase YOU for the money also, but you just dont pay. If the property is sold in 3 years because she cant pay, if it is sold and money is owed on it they cant come after you for the money because the property is now gone so the loan becomes unsecured and as such is then covered by your BR.

She can try to remortgage in her name only if she wants to and can afford too.. but the mortgage companies will not remove your name unless she can afford it alone.

nervousmother

to add: by her buying your Beneficial interest all she is buying is the future right to any equity in the property as thats all the OR has any interest in.

debtinfo

Hi NM, sorry to disagree, but, The mortgage providor will be informed, they will receive mortgage questionaire form, a notice to account form, a notice of family home form and a report to creditors

fiveyearplan

debtinfo wrote: »

Hi NM, sorry to disagree, but, The mortgage providor will be informed, they will receive mortgage questionaire form, a notice to account form, a notice of family home form and a report to creditors

Interesting, is that true in all cases or just when the property falls into the BR?

fiveyearplan

PH1LL wrote: »

Hello - thanks for your reply.

Will the mortgage provider have to be informed?

I know you say that she wont have to remortgage - why is that?

Thanks

Phill

If you have split it is always best to have a financial split too. Things can come back to haunt you years later. However if you don't do this she can keep on paying the mortgage as she is now and when she sells (providing the BI has been purchased from the OR), if it is at a profit half of that profit will be yours as you would still be considered the joint owner.

PH1LL

Im not concerned about having a split of the equity in years to come. She will never sell anyway.

My only concern is that there is no chance of her being forced out of the property as a result of me going bankrupt, whther it be by the OR forcing a sale or the mortgage providers insisting on renegotiating a new deal (which is impossible) or forcing a sale

fiveyearplan

If the mortgage company thought you were still living together I'm sure it would be business as usual.

PH1LL

????? What do you mean by that?????!