Please Help - Need Advice

sarahjane88

Hi everyone,

I have a mortgage on a flat with a friend which we were redecorating to sell. However, my friend has become saddled with a lot of debt since we bought it and now she has told me she is going for a low income bankruptcy (which I have never heard before). She told me I had two options:

One was for her to sign her share of the flat over to me. This I know is not possible since the banks will not allow it as I cannot afford the flat myself.

The second was to let her solvency agent take over her part, sell the flat on our behalf, and split the profit and give me my half. Also, if it sells with negative equity, they will take the entire loss and incorporate it into her debt.

She has told me I will not be harmed or penalised for her bankruptcy.

She has also advised me she cannot pay ANY bills including the mortgage and council tax. (I should note that neither of us are living in the flat - long story). As you'd expect I will not be able to pay the mortgage and council tax myself.

Is what she has told me correct, and where do I stand? Will the bank and council hunt me down and expect me to pay for everything until the house is sold? What can I do?

Please advice me ASAP!

Many thanks,
Sarah-Jane

debtinfo

Hi sarah, are you in scotland and what is the equity postion of the flat at the moment

sarahjane88

Hi there,

Yes I am in Scotland and the flat is worth approx £76,000.
We bought it for £73,500 but there were a lot of fees added on top of this to bring it up to just under the value the flat.

We have only had the mortgage 2 years so I don't think there has been much paid off and I suspect the value may have fell given the current market

debtinfo

im afraid i cant help as the law is different in scotland. There are a few scottish posters on here so if you wait it out a bit hopefully one will come along

sarahjane88

Bump.

I really need some advice quickly. My friend isn't going to pay the mortgage tomorrow.

The mortgage comes out of my account and she usually pays her half to me. However, I told her I can't afford that coming out of my account, when she's not giving me any money. She told me she would move it to her account so that it will bounce!!! I can only afford my half but I'm terrified of how this is going to affect me. I keep thinking of all the charges going to build up etc...

Should I phone the bank and tell them, or wait till she's moved the mortgage to her account?? Thanks in advance.

Sunnylooloo

I'll bump you up SJ and hopefully someone up on Scottish Law can help you]

CCCS_Matthew

Hi Sarah Jane.

To be able to go for a low income bankruptcy (LILA) you must not own a property, so your friend wouldn't be able to qualify. Where did she seek advice surrounding her debts?

If she went down the normal route of bankruptcy and the property was taken, any shortfall would then become your debt. Her liability would be taken away as it's swallowed up in the bankruptcy but as the mortgage is in joint names, the lender will chase you for the full shortfall. Obviously if the property sells without a shortfall then it wouldn't be an issue.

Matthew.