Bankruptcy

iosullivan

Hi all

Just a quick question......can we apply for bankrupt together as one or do we have to do this individually? Between us we have £24k debt but only mortgage and joint accounts we share, rest of debt is in individuals name. We know we will loose house by doing this but have no real way out since Ive lost my job and my partner is a stay at home mum

Thanks

Ian

shellsuit

You have to do it individually

iosullivan

Oh right so even with joint accounts and mortgage we can't do a joint bankruptcy? Which then means we need to find twice the bankruptcy fees?

shellsuit

iosullivan wrote: »

Oh right so even with joint accounts and mortgage we can't do a joint bankruptcy? Which then means we need to find twice the bankruptcy fees?

That's right I'm afraid.

alastairq

No such thing as a 'joint' BR..

So, yes, twice the fees ....

However, even if BR seems the only solution, it may not be necessary for both of you to petition BR at the same time.

BR only deals with unsecured debt.

The mortgage is a secured debt, so in itself is not affected by a bankruptcy petition.

if the payments can still be met, then it may not be necessary to sell the house immediately....[and may be cheaper than paying rent for the equivalent property?}

Where a mortgage, and BR become linked occurs after a home has been repossessed, subsequently sold, and the mortgagor then seeks payment for the shortfall. This amount then becomes included in the BR.

iosullivan

So then though we have joint b/accounts still done as individual for BR

Also so as long as we can still pay mortgage we may be able to stay? Mortgage is more than house is worth do no chance of remortgage anycase

Could we be forced to sell house?

PippaGirl_2

If there is little or no equity in the house it is unlikely you would be forced to sell, unless the amount of money you are paying for the mortgage far exceeds what you would pay to rent somewhere adequate for your needs. If that were the case rather than force you to sell, the OR may only allow you less money towards the mortgage as part of your living expenses so you may choose to sell and rent somewhere cheaper as you cannot afford the shortfall.

alastairq

So then though we have joint b/accounts still done as individual for BR

With any 'joint' account..or rather, 'debt', each party is 'jointly & severally liable' for that debt.

Hence, if one party petitions BR, then the creditor pursues the other party for the whole outstanding amount.

Same with a mortgage shortfall....if both names were attached to the original mortgage.

Or a joint loan.


It may seem a cosy financial arrangement, with ease of access, for a couple to have a joint [or as they see it, shared?] account, or loan....the reality is, the creditor actually gets two bites at the repayment cherry.....a sort-of, double indemnity?

So creditors are more than happy for more than one individual to be 'responsible' for repaying the credit.


A single debtor is thus more of a worry to them?


The downsides of having 'joint' accounts really rear their ugly heads when something like divorce happens along.

Lady_Spender

Have you tried going to the CCCS first? They can give you free advice and you may find that bankruptcy isn't your only option.
I've gone bankrupt myself but that was a very last resort.
The other thing I can recommend is speaking to your mortgage company. I Having been on a debt management plan with the CCCS I was already falling behind on the repayment of the mortgage, and was only on interest only. They may be able to offer you a number of solutions, ie payment holiday, going to interest only for the short term, or even a Assisted Voluntary Sale which is what I did.
With AVS scheme meant that my house was sold for me, but was sold at the price of the valuation. So, my house was valued at £125,000, but sold for £107,000. The difference between the sale & valuation prices was swallowed by my mortgage provider.
Please, look into all the options before applying for bankruptcy and losing your home.

Gimpsdad

If the mortgage outstrips what it is worth then it isn't an asset really is it? You can purchase back the OR's beneficial interest and they will then relinquish any claim on the property. This is an abridged answer, but the point is that it does not necessarily follow that you will lose your house at all.

debt_doctor

The only time you can 'effectively' do a joint bankruptcy is where you are members of a business partnership (not LLP)

In that case, those in a business partnership can go BR with only one fee.

DD