Bankruptcy and former home

thesilent1

Hello everyone,

Thank you to all those that started this forum to help people like us during this trying time.

I am divorced but my name is still on the mortgage where my ex wife and our 6yr old son live. I am now in the process of filing for bankruptcy and need to confirm ow this affects my son's home. I have confirmed that there is definitely no equity in the property. The current value is £87,000.00 and the mortgage balance is £101,000.00

I am re-married but currently renting. There is no other property in my name. Any advice is greatly appreciated.

Thanks

debt_doctor

Hi,
Assuming your figures are correct then there is no current risk to the property from the OR, and will be revisited at the point 2 yrs 3 months from your BR date to re evaluate. If still in neg equity at that point then the process will start to revert the ORs interest back to you for no charge.
Considering the fairly large amount of neg equity, the OR could choose to revert the interest to you early if it is felt clear that there is no chance at all of positive equity within 3 years.

DD

thesilent1

Hi DD,

Thank you so much for that. I was worried.

alastairq

Another point so far not raised is...what happens if your ex falls into the re-possession trap?

Normally, with your name still attached to the mortgage, both of you would still be liable, and pursued, for the shortfall of equity.

However, once you have petitioned for BR, the mortgage provider would then pursue your ex for the entire amount...[it becoming an unsecured debt, with your portion falling into your BR...thus you would be protected from pursuit of that debt]

If your ex is in a precarious financial position, such circumstances may have a further adverse affect on her.