DH being made bankrupt Mortgage People won't accept DD payment from me

upavon1

my husband is being made bankrupt soon and he has tried to set up the mortgage payments from my account. I never changed anything to my married name as we knew this would eventually happen so have kept all my things in my maiden name. The mortgage company have just written to say that they will not accept a direct debit payment from someone who is not the owner of the property. My name has been registered with the land registry as having an interest in the property but I am not on the mortgage (the mortgage is in my husbands sole name and when he contacted them to put me on it after we married they said he would have to give them details of any outstanding credit cards etc. so obviously we didn't pursue getting my name on just in case they took the mortgage off us as he got it originally when he was married before and they had a lot better income that we do now). We didn't think it would be a problem as we have never missed a payment on our mortgage (it is interest only) and were under the impression that the mortgage people don't really care about bankruptcy (although they obviously don't know about DH impending Bankruptcy) as long as they get their payments each month. I don't know what to do as we know his bank accounts will all get frozen once the bankruptcy goes ahead. I seem to remember reading something about a Coop bank account being offered to people even who are bankrupt - can anyone give me information about the account and whether it allows direct debits/standing orders as perhaps I could get him to open an account up asap and get the mortgage payments through that? Please anyone who can help please please reply. I have been so strong but now it's getting hard and any help would be so so appreciated. Thank you for reading

Stepup

I'm not sure you've looked into this very well at all. When he goes br, the mortgage is a debt. That gets included in the br. They are a creditor. Then you have the issue of the house and equity.

It's not a case of declare br, pay the mortgage still and the house dosent become involved. You need to get proper advice on this pronto.

tigerfeet2006

Have a read of the bank accounts sticky

https://forums.moneysavingexpert.com/discussion/3582093

Get his Cashminder account set up and running before he goes BR and you shouldn't have an issue with DD's etc.

JCS1

Stepup wrote: »

I'm not sure you've looked into this very well at all. When he goes br, the mortgage is a debt. That gets included in the br. They are a creditor. Then you have the issue of the house and equity.

It's not a case of declare br, pay the mortgage still and the house dosent become involved. You need to get proper advice on this pronto.

Bankruptcy covers unsecured debt only, so the mortgage does not get included in the bankruptcy (unless the property is sold/repossessed and then the secured debt becomes unsecured and goes into the bankruptcy).

If there is negative or little equity then you may still be able to keep the property.

PippaGirl_2

Upavon, if there is equity in the house the house may well be taken by the Official receiver as part of the BR process and sold to pay off the debts. Is there equity in the property? Who is making your dh BR? Also, whether you use your maiden name or new married name makes no difference to whether the debts are yours or not.

Mouse1812

You don't have to pay a mortgage by direct debit, we don't. We make a manual payment each month (on time) which avoids the DD hitting before funds are available and getting all those bounced DD charges, phone calls and letters. Much easier. You could just set up a standing order to send the payment each month, the mortgage company will not refuse that.

upavon1

Thank you everybody. Sorry I didn't go into the full details. We have been given advice and there is about 50k in the house equity. We have been advised that I may be able to "buy" my husbands half of the equity i.e raise 25k and we should be able to keep the house as they £25k I raise will then go towards paying his debtors off if that makes sense? Thank you for all your responses as everyone on this site knows it is a horrible time and all your help it so appreciated.

upavon1

MOUSE 182 - can I set up a Standing Order from my account though as my DH accounts will all be frozen won't they? He seems to think that he will be able to set up a DD from one of his bank accounts that he doesn't owe money too - does this sound right? I was under the impression that once you go bankrupt ALL your bank accounts get stopped is this not the case? If you could let me know your thoughts. Thank you so much

upavon1

tigerfeet2006 wrote: »

Have a read of the bank accounts sticky

https://forums.moneysavingexpert.com/discussion/3582093

Get his Cashminder account set up and running before he goes BR and you shouldn't have an issue with DD's etc.

What is a CASHMINDER ACCOUNT and how do we go about getting one? Thanks for replying

Mouse1812

upavon1 wrote: »

MOUSE 182 - can I set up a Standing Order from my account though as my DH accounts will all be frozen won't they? He seems to think that he will be able to set up a DD from one of his bank accounts that he doesn't owe money too - does this sound right? I was under the impression that once you go bankrupt ALL your bank accounts get stopped is this not the case? If you could let me know your thoughts. Thank you so much

Yes his accounts will be frozen (either by the OR and/or the banks). Those which have money in them will be assets of the bankruptcy and will be taken for his creditors. He needs to get one of those co op accounts set up for afterwards. He might be able to use that later for the mortgage, but I would suggest you use your account for now and see what happens.

My wife pays the mortgage from her account. The mortgage company provided their sort code and account number and she quotes the mortgage reference number when making the payment. Get your husband to call his mortgage company for their account details.

Fob them off about setting up a new DD, just say you need to make manual payments for a while, no need to mention BR. They may not like the lack of DD but the choice is simple, it’s the only way you can pay them.

alastairq

I'm not sure you've looked into this very well at all. When he goes br, the mortgage is a debt. That gets included in the br. They are a creditor. Then you have the issue of the house and equity.

Neither has the poster done any homework on the subject.

As JCSI says, bankruptcy involves unsecured debt.


A mortgage is a secured loan.

Where the house comes into things occurs when the Official receiver seeks to realise the BR's assets.

A property is an asset, and the OR will want to realise the BR's share [the BR's interest]...for the bankruptcy estate.

This is where property owners could be compelled to sell the property.

However,if someone can purchase the OR's interest in that property, then it reverts back.

Also, if the property is deemed to be in negative equity [where the OR will gain nothing for the BR estate] then it will remain as is....[although the OR may well hang fire for three years, just in case values rise again].

If , however, mortgage payments cannot be met, and the mortgagor repossesses the property....any shortfall ceases to be secured, thus becoming an unsecured debt, and falls into the bankruptcy.

The mortgagor isn't a creditor with regards to the BR until that point.