house and BR

Richard_S

bobblebot wrote: »

Dopes anyone know the answer to the above-will I be liable for court fees and negative equity to mortgage company if I go BR?? I want to move out and am evebn thinking of relocating to cornwall-as always wanted to live there and now seems actually perfect time for fresh start.
Does anyone know if I will be made to pay the mortgage company if they repossess and sell at a loss even if I am BR??
Thanks in advance

Hi bobble,

We were in a very similar situation to yourself but I'm late for a meeting and only got time for a quick post; I'll try to add to it tomorrow.

It's the date of your bankruptcy that is relevant here. If the house is repossessed and sold then the mortgage company will look to you for the shortfall and all their legal fees and court costs. If you then declare bankruptcy they're included as a creditor and ultimately written off.

If you go bankrupt before the house is sold then your bankruptcy only covers debts up to the date of your court hearing. When the house is sold the mortgage company would look to you for any shortfall and fees, and it wouldn't be covered by your bankruptcy.

I would stop paying the mortgage, keep the money you save somewhere "safe" and let the mortgage company repossess the property. It would also be a goot time to stop paying any unsecured creditors, other than a £1 per month nominal payment.

Hope this helps,

Richard

bobblebot

Does anyone know how long it would take for the mortgage company to repossess. if the OR takes over my finances does he not have the house and I no longer have?? If its in negative equity do I have to keep it?

bobblebot

E-mailed insolvency and this is what was told:

I am having difficulties paying my mortgage and am going bankrupt.
My house is in a negative equity situation so wondered what would happen to it in
case of bankruptcy. I can't afford to live in it but have heard that I would
have to pay the mortgage company any loss when they sell even after my
bankruptcy. Could you please advise as to what would happen in this
situation.
Many thanks

Thank you for your email today.

What you have been told is not true. If you go bankrupt and the house is
sold at a loss, the amount that is still owing to the mortgage company would
become an unsecured debt in your bankruptcy. I would point out that if the
house is jointly owned and the joint owner does not go bankrupt, the joint
owner would be liable to pay the full amount of the shortfall from the sale
of the property.

I hope this clarifies the situation for you.

The Insolvency Service is constantly trying to improve the quality of its
service and therefore we would like to ask you to spare a few moments of
your time to complete a customer comment card which is available at
https://www.insolvency.gov.uk/comment.htm . Your opinions will help us to improve
the service which we provide to you. May I thank you in advance for your
co-operation.

Yours sincerely

gettingitsorted

ok so that means basically what Richard_s has said then.

bobblebot

I've e-mailed for further clarification as im still not sure. If house hasn't been repossessed and sold-is she saying that as part of bankruptcy process house would be sold and then the outstanding owing to mortgage co. becomes an unsecured debt?? If keys are handed over to OR is it there responsibility then to make the mortgage co. sell the house or can they wait until you are discharged then sell and ask you for money...in which case I'd have to declare bankruptcy for a second time lol!!
Oh you got to laugh at times!!

gettingitsorted

i know what you mean bobble sometimes i wish these expert companies would speak in clear english lol

gettingitsorted

Bobble iv just re read miserables thread that i posted for you and she had great advice and help over the house situation from her local Citizens Advice centre.

bobblebot

Latest update:
Thank you for your further email today.


If you have joint unsecured debts with your ex husband (debts to which you were joint signatories) such as bank loans or credit cards, he will be liable to repay those debts if you go bankrupt. You would be released from the debts on discharge from bankruptcy.

As there is no equity in the property the OR will not sell the house. He would only be interested in doing so if, 2 years and 3 months after your bankruptcy, the house had acquired any equity. If it doesn't, the interest in the house would revert to you 3 years after the bankruptcy. So it would be a case of you selling it (although I appreciate you would not have sufficient money to pay the costs of the sale) or the mortgage company repossessing the property. If this happened and the house sold for less than what is owing to the mortgage company, the shortfall would go into your bankruptcy. If your ex husband is still listed as being down on the mortgage, he would be liable to repay the shortfall. Whatever happens, if you go bankrupt you would not be liable for the shortfall. The house does not have to be repossessed prior to bankruptcy in order for a shortfall to become an unsecured debt in the bankruptcy. The crucial thing is that you are indebted to the mortgage provider prior to the date of the bankruptcy order.

I hope this is helpful.

Seems to suggest that I wouldn't be liable??

gettingitsorted

morning bobble ,

it does seem to suggest that ,and they are the experts .

Richard_S

Hi bobble,

I've replied to three of your posts below, my comments are in blue. I never say anything is a fact unless I'm 100% certain, which is why I use terms like "I think" or "our experience was". I would be really interested in what response you get if you email the Insolvency Service or take legal advice because the advice that we were given was that any debts that occured post bankruptcy date were not included in our bankruptcy.

The facts are out there somewhere but sometimes they can be very difficult to find.

Best regards

Richard


Post No. 13
Does anyone know how long it would take for the mortgage company to repossess? if the OR takes over my finances does he not have the house and I no longer have?? If its in negative equity do I have to keep it?

Repossession is not a quick process, the mortgage company have to issue you with a notice of default, they have to present the repossession paper to court and then a hearing date has to be fixed and that depends how busy the courts are. I think it would take six months at the earliest and probably closer to a year.


Post No. 14
E-mailed insolvency and this is what was told:

I am having difficulties paying my mortgage and am going bankrupt.
My house is in a negative equity situation so wondered what would happen to it in
case of bankruptcy. I can't afford to live in it but have heard that I would
have to pay the mortgage company any loss when they sell even after my
bankruptcy. Could you please advise as to what would happen in this
situation.
Many thanks

Thank you for your email today.

What you have been told is not true. If you go bankrupt and the house is
sold at a loss, the amount that is still owing to the mortgage company would
become an unsecured debt in your bankruptcy. I would point out that if the
house is jointly owned and the joint owner does not go bankrupt, the joint
owner would be liable to pay the full amount of the shortfall from the sale
of the property.

I hope this clarifies the situation for you.

I think you need to be more precise with your question bobble. If you email them again put some assumed dates in e.g. If I go bankrupt at the end of May 2007 and my house is repossessed and sold in December 2007 will I be liable for any shortfall on the mortgage, estate agents, Court costs and legal fees? Your other option is to speak to a solicitor who specialises in insolvency, you should qualify for legal aid and some solicitors do offer a free consultation.

Post No.16
I've e-mailed for further clarification as im still not sure. If house hasn't been repossessed and sold-is she saying that as part of bankruptcy process house would be sold and then the outstanding owing to mortgage co. becomes an unsecured debt?? If keys are handed over to OR is it there responsibility then to make the mortgage co. sell the house or can they wait until you are discharged then sell and ask you for money...in which case I'd have to declare bankruptcy for a second time lol!!
Oh you got to laugh at times!!

Almost certainly the mortgage company will want to sell the property as quickly as possible; you shouldn’t need to do anything there bobble.