What to do about housing

so_very_confused

Having received good advice from CAB and other debt relief agencies I am going to apply for Bankruptcy. However I am completely confused as to what to do with my house. I am in shared ownership, there is approx 14000 equity in the house. Although the rent/ mortgage is 500 and it would cost me 400 to rent I would not have the worry of the upkeep and maintenance of the house. I had intended to apply for BR virtually immediately as although I was not in default with any loans or credit cards I had recently stopped work due to ill health and can only (just with a great deal of scrimping) cover my basic living costs from a works pension.
However reading the posts I began to wonder if it not better to remain in my present home for several months to save up more money to pay for rented accommodation? I had wanted to get on with Br as I cannot cope with harassment from creditors, however the stress of having to look for a property move home whilst unwell is also taking its toll.
If I am credit checked by rental agents landlords there will be defaults on my record anyway how much worse do they view you wit BR? I have guarantor and a regular income from private pension so can afford to pay rent.
I hope this makes some sense!
Can anyone give any advice to the better course of action? Thankyou

alastairq

Hi, and welcome.

Firstly, there does not appear to be an immediate rush to petition for BR, is there?

{the harassment from creditors can be ignored if, in your own mind, you know ultimately which financial path you are going to take.]

By 'shared' ownership, I take it you have a part share with the mortgagor?

You mention 'equity?'

Is that just your percentage? Or the total equity, shared between you and the other party?

Once BR, the OR will only look to realise your share of the equity for the BR estate.

Generally speaking, if a mortgage can be afforded [and is equal, or less than area equivalent rents]....then...if no equity, or the OR's interest can be purchased, the BR person can stay put.


With regards to renting?

You seem to have all the protections in place for renting...although it would really be better done before the BR petition.


As an aside, renting whilst living off a pension can be a better place to be, benefits-wise, than having property assets.

That certainly is my view, and the way I'm probably heading too....I've paid more than enough into society's system, to want to see some returns, thank you.

so_very_confused

Hi thank you for such a quick response.The equity is my share, I rent the other from a Housing Association who have the other 50%. The mortgage company has agreed to allow me to pay interest only for the next 6 months so it was tempting to remain here for a while as this makes my budget more manageable ( I am otherwise seriously below the bread line). I can continue to pay all utilities including rent/mortgage for this period. This would give me time to work out what my budget would be ie am I able to return to some form of work maybe part time, my health is such that I will be unable to work to cover the outstanding debts which amount to 22,000 or can I get DLA.
If I keep up payment of rent and reduced mortgage would this help me with references even though I will be asking for voluntary repossession after six months as the house requires a lot of repairs that I cannot afford to do, . Also if the BS knew I was BR I believe theymight withdraw the interest only facility and I could no longer afford to do this. To complicate matters further the HA pay house insurance so if I ceased to pay my thoughts are that they would continue this as it is not in their interests for the house to burn down. If I leave the house through voluntary repossession before BR with no default on either rent or mortgage would the BR cover debts whilst repossession takes place???
Sorry this is so long winded, but I am terrified of making the wrong decision.
Thank you again

alastairq

If I leave the house through voluntary repossession before BR with no default on either rent or mortgage would the BR cover debts whilst repossession takes place???

BR would include all unsecured debts incurred prior to date of petition.

Also, if a secured debt becomes unsecured, and the debt originated[secured] prior to the date of BR petition, that, too, is included in the BR estate.

Since you say you have equity in the property, can you not sell it [or rather, your share?]

Although this may take time, at least it might give you some capital to work with?

so_very_confused

Thanks again for advice.Don't think selling the property is an option as the equity is well below what I owe and although sadly don't believe keeping property is a long term option given my reduced income.
Sorry to be a bit dim but if I get BR would this deal with any rent and mortgage payments originating after the date of BR whilst awaiting repossession if there were none stated in my SOA. Think you might have answered this but not sure if I understood.
Thanks again for your help

alastairq

Thanks again for advice.Don't think selling the property is an option as the equity is well below what I owe and although sadly don't believe keeping property is a long term option given my reduced income.
Sorry to be a bit dim but if I get BR would this deal with any rent and mortgage payments originating after the date of BR whilst awaiting repossession if there were none stated in my SOA.

Aaah, so there is negative equity?

You would need to petition BR, IMHO, after you move out.....preferably after the property has been re-poed and sold.

[I get the feeling the rent portion would still accrue between you leaving, and the house being sold?]

Therefore, as I see it, if you petition BR beforehand, the rent portion will be an 'after-acquired' debt....so would not be included in the BR estate.

Mortgage payments refer to a secured loan [ secured on the property].

Therefore these fall outside the BR remit [for unsecured debt]....if you cease paying the mortgage, then eventually the mortgagor must seek re-possession.

If the HA is willing, and the property sold, then any shortfall on the mortgage becomes unsecured, and falls into the BR. This should be regardless of when the BR is petitioned.

So the real problem will be the rent portion.


I humbly await more knowledgeable souls to correct me, or add further info to the above....

so_very_confused

Thank you again!
Clear as day now you have explained it!. So I do need to find a rented property before BR as if it takes time to sell the property I will remain responsible for the rent portion.
Timescale for BR depends on how soon I can find property to rent and move. I am getting together money for BR anyway, so rent and bond will take priority.
Thanks alaister I notice you respond to lots of threads, Bless.

nuttyp

We were in shared ownership with the local council, and the rent part that was outstanding was included in the BR. Mind you this was back in 2009, so things may have changed by now. Good luck with the property hunting, hope you find somewhere suitable soon.

alastairq

We were in shared ownership with the local council, and the rent part that was outstanding was included in the BR.

did you petition BR after you had left the property, and it had been sold?