really confused about it all (reposession and bankruptsy)

MITZIW

tomorrow i shall phone the cccs as we cannot go on the way we are, we can no longer afford the mortgage on our house and are going to let them reposess it but as wehave a secured loan on the house we will have to go bankrupt (also have unsecured debts ) i amunsure ofwhat to do next. iknow we have to save up for rent, deposit and bankruptsy fees but should we go bankrupt before we leave the house and if we do will the secured loan still go in the bankruptsy or should we wait until we have handed back keys and are renting? i'm also very concerned about renting somewhere after bankruptsy or during and getting chucked out. i thought maybe trying to find out how long we could stay in house and saving as much as possible for rent so we could say we are bankrupt but give them large ammount of rent in advance? also we both have overdrafts should we now open a co op joint account andhave partners wage checks paid into there and then will the overdrafts just be extra unsecured debts? or should we wait until just before we go bankrupt so they arent chasing us for long? god im sorry about this essay just so stressed and cant think of anything else!!

RAS

Hi

You need som e serious advice from a debt charity, because with a secured loan as well, you need to do things in the right order.

That will mean the secured loan will become unsecured unless the sale price covers both, and can be included in the bankruptcy.

Kohoutek

MITZIW wrote: »

tomorrow i shall phone the cccs as we cannot go on the way we are, we can no longer afford the mortgage on our house and are going to let them reposess it but as wehave a secured loan on the house we will have to go bankrupt (also have unsecured debts ) i amunsure ofwhat to do next. iknow we have to save up for rent, deposit and bankruptsy fees but should we go bankrupt before we leave the house and if we do will the secured loan still go in the bankruptsy or should we wait until we have handed back keys and are renting? i'm also very concerned about renting somewhere after bankruptsy or during and getting chucked out. i thought maybe trying to find out how long we could stay in house and saving as much as possible for rent so we could say we are bankrupt but give them large ammount of rent in advance? also we both have overdrafts should we now open a co op joint account andhave partners wage checks paid into there and then will the overdrafts just be extra unsecured debts? or should we wait until just before we go bankrupt so they arent chasing us for long? god im sorry about this essay just so stressed and cant think of anything else!!

Before you make a decision like declaring yourself bankrupt, make a face to face appointment with someone at a Citizens Advice Bureau or see a solicitor. The CAB is always free, and many high street law firms offer free half hour appointments.

They will probably advise you to speak to your mortgage provider. If you're going through hard times for a few months, they may give you some flexibility.

If you declare yourself bankrupt and your house is repossessed and sold, your creditors will be paid in a specific order. The mortgage provider will be paid first, then the holder of the secured loan, then any unsecured loans such as an overdraft. However, this process will differ depending on who owns the property and who is responsible for certain debts between you and your partner.

Being bankrupt will affect your ability to rent on the private market. If you can avoid it, do not declare yourself bankrupt.

jellygirl_2

I went BR and left the house about 1 month after stopping payments to mortgage co and secured lender. I found somewhere to rent but had to put up a few months rent in advance.
If you decide you need to do this, and let the house be repo'd, then the debt (moreover the shortfall) wont fall into your bankruptcy until the house is repo'd and sold on - then the debts become unsecured and fall in to BR as they were debts incurred before date of BR. If you do go BR, your OR will be able to advise you about the house situation.

MITZIW

thankyou, there really is no other option, the mortgage has been interest only for almost a year so will be going up in a few months and will be more un affordable and we already are in arrears. we just cant afford the mortgage plus secured loan anymore. ive seen plenty of people on here that are renting after bankruptsy otherwise where would they all live? lol but i am worried about it.

RAS

Start by speaking to one or more of the debt charities listed here http://www.moneysavingexpert.com/loans/debt-help-plan#help

they may then recomend that you speak to an IO, but first speak to them.

MITZIW

thankyou, think i have decided on phoning national debtline tomorrow.

MITZIW

jellygirl, so was the house reposessed after you were declared bankrupt?

skintflint103

Mitz you have at least 6 months before repo so give yourself a bit of time and save a few quid to pay deposit and upfront rent. A bit like your way of thinking will work , arraer get written of as do legal cost. Not the best solution but it's an evil world. You'll both learn to fly again. All debts will be written off even if your are discharged before the house is sold (this happens a lot) put a plan in place make sure you got good advive on the preparation of your statement of affairs. Are you saying you got no equity at all for a mortgage rescue scheme?

MITZIW

no im afraid theres no equity in the house and secured loan on it.

MITZIW

and thankyou, think that what i need a plan so i know whats happening when and im scared ill do something wrong and it'll all be over then i'll get a letter from someone saying we still owe money!