Bankrupcy and my house

gemmay1

hi wonder if you could help.
i have a 120% mortgage with norther rock the secured loan is 67,000 and the unsecured is 20,000 our house is value at £60,000
I have debs of approx £25,000 which i cannot afford now if i was to go bankrupt would we loose the house?it is a join mortgage and only myself claiming bankrupcy
thanks

gemma

sizzler

Hi Gemma.

Please take some advice before considering BR.

All unsecured loans will fall into your BR. If your house is in negative equity then you can keep the house in certain occasions. Are you behind with your mortgage or fixed property loan?

sizzler:)

gemmay1

i have taken advice but people cant say for sure if i will loose the house.
not behind in the mortgage made sure i am up to date with that.

But that thanks for the advice.

neas

Wouldnt it be in her interest to just hand the keys back and get it repossesed... then get all debt eliminated by bankruptcy? whats the point starting at -7k on house ? i guess she wouldnt be able to get a mortgage for 5 years being bankrupt and all.

peachyprice

The house should be fine as long as you can afford the mortgage payments. The OR isn't going to take a house off you that is in negative equity, they just don't do that.

As for the mortgage, the £67K would remain as it is but your liability for the £20k unsecured would be included in your BR but would then fall entirely to your OH. I don't know what NR do in this situation, whether they just let you carry on as normal or start chasing for immediate repayment of the unsecured, you'd need to check this out.

If your OH went BR too the entire £20k would be wiped out.


HTH

peachyprice

neas wrote: »

Wouldnt it be in her interest to just hand the keys back and get it repossesed... then get all debt eliminated by bankruptcy? whats the point starting at -7k on house ? i guess she wouldnt be able to get a mortgage for 5 years being bankrupt and all.

Not if the mortgage is affordable.

Negative equity is only a perceived state, it's not tangible. To give a house up purely because of NE is complete madness. In a years, 2 years, 3 years time the market could change and there could be £10k equity and they would have given up a house for nothing.

NE is only a problem if you NEED to move. If you have enough space, can afford the mortgage and live in an area you like it's completley irrelevant.

gemmay1

i should ov added i have two small children under 4.could really rent anywhere as id fail the credit check

neas

true if you are fine with keeping 7k 'debt' after the bankruptcy then sure.. just make sure can afford mortgage as you wouldnt be happy getting bankrupt.. then repossesses.. and slapped with difference between mortgage as well.. that would be like being kicked while down.

Only reason i mentioned it.

peachyprice

But it's not a debt unless OP wants to sell the house.

A house is worth what it is to you as a home or what someone else will pay for it. If it's worth keeping as a home then there is no 'debt' to be left with.

Also, once BR you will NEVER be liable for any repo shortfall as long as you don't change your mortgage. So it really doesn't matter if the house were repo'ed in 1, 5, 10 years time OP would never be 'slapped with the difference' it will always be covered by her BR.

We've had members here begging the bank for their house back when they realised they'd thrown it away for nothing just because of NE at the current time.

gardenerswife

Is this classed as the Together mortgage which NR used to offer - if so we had that and have gone bankrupt - if its the same I will discuss what happened to us if that would help?

mattyg100

Yes i have a together morgage aswell
Got my Or interview tommorow :T

Get it over and done with as quick as possible

I phoned up Northern Rock and told them i was just made bankrupt i have 28,000 unsecured debt on my morgage they said as long as i carry on paying them the morgage and any secured loan the unsecured will be wiped off and new monthly figures calculated to pay.
They were happy with me to carry on with the House

Its all down to the Or now to see what they say about it ??

We have about £6000 equity in our house hoping we will be able to make a BI offer to the Or to keep the house.

Hope all goes well for you