bankruptcy or not

wthtodo

Hi all

my situation is

loads of debt approx £75k and approx £100k negative equity in the house.

i have a review hearing due 3rd december by the 2nd mortgage company who we have 50k arrears with - we are fine with the 1st mortgage - we currently pay £200 (previous hearing) to the 2nd mortgage company - now they want full payments and arrears - which would mean around £750 monthly

if we were to go for bankruptcy - would it be best to get a rental - let them repossess - then go for bankruptcy - to clear off everything as unsecured debt

or go for it now or suggest to the judge - would their be a realistic option to keep the house that way, as theres so much negative equity - or will the possible repossession over rule that

also i have a disabled mother in law who lives with us - and would need a rental to suit her requirements - which wont be easy to find

any advice or sharing of experience would be great

wheres the best place to get advice the court would take note of?

PippaGirl_2

Do you have other unsecured debts?

BR only includes unsecured debt so would not include any secured debt in the house while it remains secured (before the house is sold).

National_Debtline

Hello there.

In addition to Pippagirl's post I just wanted to add that if you went Bankrupt before the house was repossessed/sold any shortfall that was to arise at a later stage would automatically be written-off as part of the bankruptcy - even if the property was disposed off after the point of discharge. In a nutshell, as soon as any shortfall becomes 'unsecured' it would disappear as you took out the debt before the bankruptcy date. Hope this makes sense!?

A word of warning, though, the lenders may try and get you to sign a 'deed of acknowledgement' after the point of discharge - please DO NOT SIGN THIS; as it *could* make you liable for the shortfall once more.

If in doubt, don't sign anything and seek advice!

Hope this helps.

David @ NDL.

wthtodo

Hi David

thanks for that

i guess either way it makes no difference.

in your experience do you think the judge would grant the repossession even if there is a ton of negative equity, knowing that at best the 2nd mortgage company would get 10k out of their 112k (with interest).

im really trying to work out the best way forward so we dont end up homeless, plus have some sort of life to look forward to.

its so difficult to get any clues as what the right move is

PippaGirl_2

Yes, reposession would probably be granted however much negative equity there is. If the debt is not being paid as per agreement then the lender has the right to apply.

Have you been to CAB or phoned National debtline for advice?

wthtodo

Hi there

yes i am currently communicating with national debtline and with the cccs

to be honest i find they havent a lot to say - just lots of read this leaflet type of stuff

i am seeing the CAB next week - takes ages to get appointments with them

any idea how long it takes to become bankrupt from filling in the forms to it being granted?

also if i get a rental property - then go for bankruptcy - do i have to tell the rental company - are they likely to throw us out?

just trying to get an idea of all scenarios

people go bankrupt all the time - they cant all be homeless

oooh also are utility debts wiped off by bankruptcy?

JustinCredibleGillespie

Start looking for a rental property asap. As long as you can afford your rent every month then being bankrupt shouldnt matter. With some Estate Agents it could but not with a private landlord. Dont sit back & wait for a repo order to be granted start the ball rolling now by looking for somewhere to suit your needs.

If I was in your situation, I would ring the local court & get them to issue you with Bankruptcy forms so you can take them along to your appointment. It could take weeks to get another one and I could say without doubt that CAB will recommend you go bankrupt. I dont think is any chance of you being able to clear those kind of arrears in this lifetime.

So get the ball rolling & your !!! in gear, if you act now you could have all this sorted before xmas which means less stress.

All the best

JCG

xx

JustinCredibleGillespie

N.B Utilities can also be put into your bankruptcy ie old phone bill etc.

JCG

xx

one2escape

National_Debtline_representative wrote: »

Hello there.

In addition to Pippagirl's post I just wanted to add that if you went Bankrupt before the house was repossessed/sold any shortfall that was to arise at a later stage would automatically be written-off as part of the bankruptcy - even if the property was disposed off after the point of discharge. In a nutshell, as soon as any shortfall becomes 'unsecured' it would disappear as you took out the debt before the bankruptcy date. Hope this makes sense!?

A word of warning, though, the lenders may try and get you to sign a 'deed of acknowledgement' after the point of discharge - please DO NOT SIGN THIS; as it *could* make you liable for the shortfall once more.

If in doubt, don't sign anything and seek advice!

Hope this helps.

David @ NDL.

This is very interesting. I spoke to my mortgage company and they said if I went bankrupt before reprocessing that I would still be liable for the money

Mouse1812

one2escape wrote: »

I spoke to my mortgage company and they said if I went bankrupt before reprocessing that I would still be liable for the money

Mortgage company 100% wrong - and don't sign anything, it will be a trap.

one2escape

I rang my advisor from stepchange and she confirmed that they where wrong and just trying to get me to pay for it. It was rather stressful and was making me worry.