keep house with bankruptcy?

mattyj0

I am currently in a dmp with payplan but wondering if I would be better going bankrupt instead.
I have a together mortgage with northern rock mortgage was £94000 and loan with it was £28000 house price was £99000 bought oct 2005 with a 7 year fixed rate.
I have unsecured debts elsewhere totalling 33500.
at the minute I have a surplus income of £158 pm but with not having to pay the northern rock loan I would have £308 approx
the value of my house is no more than £110,000
If I went bankrupt what would be the likely senario here.
Also my ex gf with whom I bought the house is still on the mortgage we still get on very well and she has no interest in realising any equity that may be in the house we just left it that way. But i'm guessing no-one else needs to know that and I might be able use it to my advantage???

am I likely to lose my house if I went bankrupt or might I be able to stay in it? I'm not purposely avoiding this debt its all accumalated with my gf leaving and me using cc to pay bills etc.

Thanks in advance

Matt

Millionare

I think the OR would want the House because you have positive equity in its value.

smokey112

based on your figures then you have a £16k possible equity - technically £8k of this is your ex g/f - you could debate with an OR to sell his BI (Benificial Interest) on your £8k - this could be sold to a 3rd party (family member) or by your ex g/f - this can be done for a nominal sum if put to OR correctly. Not sure how still having ex g/f on mortgage will be as OR might be looking as to why no contributions from them !!

mattyj0

thanks for the replies guys,
I could be wrong but being that I'm only in year 2 of a 7 year fixed rate would I not have to pay the fees associated with ending a fixed term so early as well. ie my equity is likely to be a fair bit less than 16k more like 10k to 12k
also my gfs grandparents lent us the 5k deposit on our first house which we sold to buy this one using the 5k again. I was hoping that I could tell the OR that my gfs interest has not been bought by myself as I am unable to do so as I cannot afford it, and until I do that being the reason for no contribution from her.
also where will the OR get the valuation from? a local agent or just what I tell them? (unlikely)

swapshop

BASICALLY THEY WOULD WANT ANY MONEY THEY CAN GET.
YOUR HALF OF THE EQUITY WOULD BE WANTED WHICH AS SAID A THIRD PARTY COULD BUY THE RECIEVERS BENEFICIAL INTEREST WHICH COULD BE NEGOTIATED POSSIBLY FOR A LESS VALUE OR IF NOT THE PROPERTY WOULD HAVE TO BE SOLD TO GET HIS MONEY.

I LEARNED THE HARD WAY.
I WENT BANKRUPT IN 1998 FOR £20,000 BUT THERE WAS NO EQUITY IN MY HOUSE AT ALL. I THEN COULD HAVE BOUGHT BACK THE BENEFICIAL INTEREST IN MY HOUSE FOR £1.00 PLUS LEGAL FEES WHICH WAS TOTAL OF ABOUT £500 BUT AT THE TIME COULDN,T AFFORD TO DO THAT .
I HAVE JUST HAD TO PAY THE FULL £20.000 PLUS BANKRUPTCY FEES OF £4000 TO RELEASE HIS INTEREST IN MY HOUSE AS THERE IS 100k EQUITY NOW AND I GOT A LETTER SAYING HE KNEW THERE IS NOW EQUITY SO PAY UP OR BYE BYE HOUSE.
NOT SURE WHO THEY USE FOR VALUATION BUT START WETTING YOUR WALLS OR TAKE OUT YOUR CENTRAL HEATING ETC... BEFORE HAND TO LOWER VALUE

missk_ensington

This may not be completely true, it would have to be financially viable to make you sell your house. If doing so would mean being charged ££££ for breaking your fixed rate agreement you might get away with it (Did you say you were on 7 years fixed rate? When does this end?)

It would depend on your mortgage terms. x

Irishbollox

does anybody have experience with the OR in buying the Benificial Interest? i have just been made bankrupt and there is £15k equity in the house that I own (well use to) with my wife. she need to buy that BI but as cheaply as possible. any previous experience/ comments/ tips or help greatly appreciated.
Thanks

Sooty0404

Irishbollox

It is a simple and straightforward procedure. Contact the OR with your offer. You will need some proof as to what your house is worth and the best way to provide this is to find a house similar to yours that is up for sale, obtain details from the Estate Agent and forward these to the OR. Try to make sure the house is worth a bit less than yours. Currently your house has £15k equity so the OR has a £7.5k asset, less selling costs if he were to sell so you may get away with a very low offer. I would suggest an offer of £100. You will have to pay the OR's legal fees of £211 plus your own solicitors costs, which should be about the same. Once your offer has been accepted and you have paid your money there is nothing more to do as it is just a legal paperwork exercise. Upon completion your property is completely detached from your bankruptcy and even if it were to double in value overnight no one could lay any claim to it whatsoever.
Get this done as soon as possible as this is one aspect of bankruptcy that can be easily overlooked or forgotten and can come back and bite you long after you have been discharged.

Irishbollox

Ok, thanks for that, but i really have to ask the obvious question. Why such a low offer?? Won’t that just antagonise) the OR and then we'll get no lea way? Will they say come back with another offer or is there no negioting (sorry for the spelling after the first offer?
How soon after the interview can my wife put the offer in? (She was there with me yesterday).

Sooty0404

Assuming your wife still owns half the equity then the Receiver gets your share in the event of a sale ie £7.5k. If he decided to sell the house he would be responsible for half the fees. If you can get your house valued at a lower figure or convince the OR it is worth less then by the time he had sold it there wouldn't be much left - hence an offer of £100.
This operation is a bit like buying a car - or anything else for that matter. The OR has an obligation to realise your assets for as much as possible, your wife as a buyer wants her goods as cheaply as possible.
There is nothing wrong with negotiation. The OR will not put a price on the equity until you have made an offer, so start low and work your way up.
Your wife can make her offer at anytime but it will take a few weeks for the OR to review your situation. Leave it for a couple of weeks then get the ball rolling.

Irishbollox

sounds great!!! Thanks for that. I'll let you know the outcome as it happens :-)