Bankruptcy Questions - New Question Post 6

tommo2007

Hi there all,

Never posted here before, so please bear with me on these newbie questions! I'm sure they have probably been asked a million times, have done searches and can't find the exact answers unfortunately!

Anyway - first of all my bankruptcy order has all been done and was declared on the 15/12/2010 - scary times, I'm like many on here and my stomach was in knots before going to get everything sorted, but the relief was amazing!

A quick couple of questions I have

First of all, I have a home involved which is owned jointly with my ex-partner. Neither of us live in the home and it is probably around 13k in negative equity (eek) - there is a mortgage and 2 secured loans on the property (mortgage and one secured loan first charge and the second secured loan is second charge). I'm struggling to understand what I am reading on the internet, but basically because the home is negative equity, am I liable at all for that debt or does it all come into my bankruptcy? (I have read about these Deed of Acknowledgement letters from creditors, but that's just making me even more confused!).

Secondly, I have been sent a letter today (2 days AFTER my bankruptcy, typical) - stating that my pension company (company pension, have left the job) is not big enough for them to keep and I need to take the money - it's only around £800 after tax (as you can see, not been there very long!), I will obviously tell the OR about this when he calls next Wednesday, but I was just wondering whether that will all be off to the OR as "cash in hand"?

I will obviously be able to ask the OR these things next week when he calls, but just looking for answers to try and put my mind at rest beforehand as sleeping is still hard with all this going round!!!

Thanks for any help - and sorry if these questions are so simple they bore you

Thanks

Tom

IF

Hello Tom and welcome, It does feel a bit surreal doesn't it but the relief is enormous. No worries your questions don't bore anyone it's what we are here for.

Not a 100% sure on whether the OR will take all your monies.

Until anyone advise futher here is some info re your home, clickon the blue links:-

Your home/property.

• What will happen to my home? (IS) (pdf)
• FAQ - Bankrupt's Home under the Enterprise Act (IS)
• OR's Case Help Manual - Family Home
• If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?
• Charging orders in the county court - National Debtline factsheet (useful if a creditor is trying for a CO before your bankruptcy)

For ‘essential’ BR info this is Fermi’s sticky - Click here

Best wishes
If...x

wookie999

hi tom if your property is going to be repossessed the shortfull falls into BR and then the secured loans are no longer secured then they also fall into your BR do not sign anything from them. pension aint got a clue mate one for the OR Good luck mate

skylight

The property - so you do not intend to keep it?
Properties are a little odd. You are liable for the mortgage/secured loans etc after your BR; this is because at this stage there isn't a proveable debt to these things to go into your BR pot. So you many find you are chased for them (and your ex); remind them of your BR and that you are not able to pay. Once the property has been repossessed AND sold on, the mortgage company then know how much of the negative equity you will owe and it becomes a proveable debt at this stage and all the debts associated with it will go into your BR pot; even if its a year or two after the BR date. At this point your EX will be completely liable for the debts here.

Does this make sense??

The most important thing - NEVER SIGN ANYTHING to do with a repossession etc from the mortgage/secured loan provider. This is because many have clauses that change the neg-equity into a new debt after BR and new debts after BR canot be included in your BR pot (you would have to go BR again......) NEVER SIGN ANYTHING!!

tommo2007

WOW - Thank you so much for all of these replies.

If - thank you for all of the links there and will give me plenty of reading

wookie - thank you! I thought the same re the pension, just see what is said! Thanks for the info re the mortgages and I thought that was the case when signing anything - ie DON'T!

skylight - Thanks for the reply also - the answer is no, I don't intend to keep the property - I want it gone! Everything makes sense in that there is not a "provable" debt at the moment, so until there is a realisation of ACTUAL debt it won't come into bankruptcy. My concern was that when the property is eventually repossesed/sold or whatever the OR does with it, that I would still be in some way liable for the shortfall. If this just hands to the ex, that is fair enough, she is fully aware of what I am doing and is seeking her own advice (all very amicable!). Hopefully the property will be dealt with ASAP so that it is all closed off and I'm not worrying about that for 2 years!

Thanks so much for all of the posts so quickly guys!

tommo2007

Just had a further thought aswell - hope someone can help out!

Although the house is in negative equity and me and my ex partner are not living there, the mortgage is only actually about £600 in arrears (which she could catch up if she wanted). She doesn't want the house to be repossessed and wants to rent to her father - where would I stand in this?! Because obviously, as stated, I would be liable for this shortfall unless the house is repo'ed or there is a sale of the property?! Or would she need to own the property in full to be able to do anything with regards to rent etc?

BTW her father has been living in the property since we left and has been paying the mortgage for her since we left the house. There is no official tenancy agreement in place (although one was drawn up but never signed by the tenant!!) and the bank do not know that the house is being "rented" (bad I know, please don't get mad with me!).

Thanks for any help, I am just a little concerned all of a sudden that the house is going to be left to drag on for 3 years and the debt coming back round on me

Thanks guys - and again, sorry to be a pain!

EDIT - Have also read and re-read and re-re-read the links in if's post - and still finding it hard to take in (I have that much swimming around up there I don't know whether I'm coming or going). I'm sure the answer is in there, but I can't quite get it, don't know why!

skylight

Renting - as joint owners you are both liable for anything that goes wrong with this and you are also both entitled to the proceeds (so half the rent is yours, as is half the mortgage).

You and her will still both be liable for the mortgage and secured debt on the property and negative equity is not a problem nor is it a debt unless you came to sell the property. Realistically as a BR though the debtors are more likely to chase her, as she is a better prospect for repayment.

She could purchase your share of the property if she could get a mortgage on her own but that would have to cover the mortgage/secured loans and then she would take a hit on the negative equity aspect so couldn't borrow enough to cover. She would also have to purchase your share of the beneficial interest from the OR (this is the right to the property and potential profit and DOES NOT mean ownership - your OR currently "owns" your BI).

It could drag on if she doesn't want to let go of the property. Although it would be a foolish thing to do (IMO) if your ex-partner is a BR and has walked away, refusing to pay anything etc. But I guess she doesn't fancy BR or be faced with the debt alone either. She has a tougher decision than you on this one. (Its not a dig, its a reflection)