bankrupt or not?

mrsb83_2

Whilst I understand you are frustrated, divorce law is separate from joint ownership of property and has no bearing on your situation.

The previous commentators are right that you and your sister are both responsible for 100% of the debt, not 50% each. If she becomes bankrupt, the bank/lender will look to you to service the whole of the debt.

You need to speak to a debt advisor to figure out the best way of getting out of the flat and arranging repayment of the negative equity.

sumary320

thanks for all of your comments! the load is secured. we do have an overdraft together and a small personal load but these are both minimal compared to the secured and the mortgage. if we were to sell the flat for what we are asking today then we would be left with approx £20k which doesn't sound so bad if she was to pay her half! I will look into the options suggested and hope that i can sort something out!

RAS

Does your sister realise that going bankrupt will not remove her responsibility for the secured loan?

fermi

RAS wrote: »

Does your sister realise that going bankrupt will not remove her responsibility for the secured loan?

Not quite true. It would remove her legal liability for it.

However, unlike an unsecured debt, the loan would remain secured on the property.

The point is that if she goes BR, then although the secured lender can 'ask' her to pay the loan while it remains secured on the property, there is burger all that they can do to enforce it against her personally if she tells them to get knotted.

The only action the lender can take would be possession and sale of the property. It's only after that is done that a lender can come after you personally for the shortfall. But if she's gone BR they don't have that option.

One thing she does have to be careful about, is not to sign any paperwork after her BR that says she is liable for any shortfall. Most secured lenders, especially in a voluntary repo, will try to get you to sign forms that say that.