Do you always lose your home if you are declared bankrupt?

terriblesaver

If I am being dim, please feel free to tell me. I am trying to pay everything off but keep being told that I should go bankrupt instead. I dont want to lose my home - is this feasible?

CLAPTON

in bankruptcy your assetts will be sold by the OR (Official receiver) for the benefit of your creditors.

if there is equity in your house (i.e. difference between the value of your house and the mortgage and any other secured loans) then this will be realised for your creditors. this usually means the house must be sold. (the actual sale can in some circumstances be delayed for up to a year).
if there is very little equity in the house it may be possible for a relative/OH to buy this from the OR.

how much is your property worth and how much is the mortgage and other secured loans? is it jointly owed, is your OH also considering bankruptcy?

terriblesaver

Worth about £220,000 - mortgage of £198,000
Joint ownership - rather it was one of us than both

CLAPTON

are you both considering bankruptcy or only you?

dudleyboy

If you don't, you should.

terriblesaver

I kind of hoped we could carry on with the DMP we are in and try to get straight that way - the house is all we have

What happens if we both go bank rupt?

CLAPTON

if only one of you is going bankrupt then the OR will want half the equity in the house ie half of (220,000-198,000 = 22,000) or £11,00 your half.
however, you may be able to argue that the price for a forced sale and selling costs will reduce his take so you may be able to negoiate a lower amount..maybe get 10,000 off the amount so you only need to find 5,500 for your beneficial interest. but no guarentees.
If your OH (or a family member etc ) can raise this then the OR would normally accept this and you could keep the house.

If you are both going bankrupt then the OR would want the 22,000 or (reduced amount as above). again if a family member could raise this then it would be possible to save the house. Otherwise the house will be sold.

Mike_St_Helens

here is a specialist forum on Bankruptcy. Post a question there and someone will definatley know the answer for you.

http://www.debtquestions.co.uk/debt_forum/viewforum.php?f=6

Mike