going bankrupt whist owning own home

hazel3603

wowzeeee...thank you...i was expecting a grilling at some stage! I too have depression-but I know the biggest hurdle is getting the debts out of the way. Sorting the kids out will be a doddle compared to all the traumers associated with going BR.....THANK YOU SOOOOOO MUCH!!

hazel3603

Oh yes....and i will talk to them about geting their names on the housing list also...thank you..

PippaGirl_2

The problem with the housing is, they won't be accepted as homeless under certain circumstances. Not paying your rent or mortgage and getting in arrears and being forced out is seen as being 'intentionally homeless' and the council have no legal obligation to house them, though they should still offer them advice.

Also though everyone is entitled to apply to be on the housing list they will be at the bottom of the list as they are currently housed. Most lists are 6-8 years waiting list but those that are currently adequately housed are unlikely to be housed.

I would phone the local housing department and ask if there are 'floating support' services that your friend could be referred to. A floating support worker is all about maintaining or getting necessary housing and will help with forms and applications and will offer practical and emotional support. They can act as a 'go-between' between them and the council if and when necessary and can attend housing panels where the applicant can't. They can also refer people to mental health services, get children's or adult services involved if they think it will help the housing process or if needed.

It sounds as if there is considerable equity in the property if the mortgage is almost paid off, so I think it inevitable that the OR during the BR process will seek to pay off all the debts using that and will place a claim on their house and they will lose it. I don't think they will be able to find the money to pay off all their debts themselves instead of losing the considerable interest in the house by the sounds of it so if they do go BR they need to accept the house may go.

Worth exploring alternatives to bankruptcy in order to save the home

tigerfeet2006

Pippa, I understood it as three years and the arrears would be paid off if they continue to pay £40.

Hazel, sweetheart, please get them to get help from one of the debt charities. They MUST do this as their petition could be delayed if they don't.

PippaGirl_2

ah, ok.

So OP, how much is the house worth and what amount of mortgage and secured loans are on it?

hazel3603

oh blimey.....even more complicated than I'd anticipated. I'll have a look through their mortgage stuff today... a little uncomfortable about asking them to let me do this, as I feel I am invading their worst nightmares. The house is worth considerably more than they paid, initially 15, 000, years ago though, but they re-mortgaged to buy double glazing and I fear more re-mortgaging to clear debts. Too scared to ask...but all the details will have to be discussed anyhow. My friend thinks they owe abot 7000 in all, to creditors but I suggested she resign herself to the fact it's likely to be more. They ought to have enough money, if they sell the house themselves, pay off all the debts and purchase another property. There is a three bed house nearby going for 177 thousand and a 2 bed flat for 115. Would be a squeeze though as they have dogs and 2 kids, one of each. Oh god, what to do. Will they have to pay for someone to come out and value the house? It's got to be worth at least 160...worried I'm out of my debth and of course dont want to mis-inform them. Even if they remortgaged to clear all the debts, they would keep the house as the mortgage payments would be so small anyway. Confused...will have to go see them..wish us all luck and thank you all so much for your very sound advice. Wishing you all well..xx

PippaGirl_2

If all they owe is £7000 then there are other options rather than BR open to them. Get them to call one of the free helplines or visit a CAB.

Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
National Debtline - Website: National Debtline Telephone: 0808 808 4000
Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)

patman99

As her hubby has had a heart attack are they not entitled to any kind of help from the benefits agency ?.
Hazel, you are being a really good friend to the pair of them and going way beyond what would be expected of you.

Is there any way you could persuade them to allow you to assist them further by writing to their creditors on their behalf to see if they will freeze the interest for a few months ?. Also they need to create a SOA. This alone may help to uncover any things that could be cut back on. Also, I would be surprised if the O/R would not require a SOA to be done should they try the B/R route.

Speaking as someone who suffers from depression, I can safely say that when things start going a bit Pete Tong the panic sets-in. I know when I needed to find nearly £600 to pay for repairs to my van, I really got in a state when I couldn't get a loan. As it was, with a bit of financial fund relocating, I was able to pay without a loan and now see the rejections as a message from above that all was not that critical financially.

Your friend is likely to be concentrating so hard on the negative that she is failing to see the big picture. You say she spends £60 a week on scratch cards. People on here may see this as a waste of money, she will see it as a potential way out of their debt nightmare if she wins. In the meantime, she is getting further into debt. This then makes her feel worse. It is a natural defensive reaction to the situation.

gravitytolls

Mmm, only £7000ish. Keeping up with the mortgage.

They'll not be able to remortgage or take a second mortgage, as those with a good credit history are struggling to do so. However, bankruptcy seems a drastic solution for such a relatively small debt in comparison to assets.

They urgently need advice. TBH, if they pay £1 per month to their creditors whilst trying to sort out what they can do, the worst that will happen is they'll get a CCJ. They may eventually get a charging order on the house, ensuring the creditor gets their money upon sale of the property.

Unless things are much much worse than you've been led to believe, BR is possibly not the right option as that in itself brings so many concerns and worries.

tigerfeet2006

Hazel, they really need to be talking to someone like the CAB on this. Please, please, please get them to do go down there, take them down yourself if you have to. Or sit them down and ring National Debtline and sit with them while they talk to them.

Just please get them to get advice, really please.