Sercure debts and bankruptcy

minkybunny

I filled for my bankruptcy in April 2011 and was discharged from it in April 2012. Included in that, was my house that my ex wife still lives in. We had a mortgage and a secured loan on the property. These were both included in my bankruptcy. The insolvency service told me that any interest I had in the house would be taken over by them.

I also have in writing from them saying that I'm not liable for these debts any more.
The ex is still paying the Mortgage company but not paying the secured loan and they are chasing me for it. I've sent them copies of the letters but they wont give up. They keep saying it's a secured debt and it's not included in the bankruptcy. I've phoned the insolvency service and have asked them a number of times and they say not to pay, I'm not liable anymore but this afternoon I had a phone call from the loan company saying they had spoken to the insolvency service and they have got their wires mixed up and I'm liable. I've told them I want it in writing from the insolvency service.
Is this the case and would should I do?

fermi

Loan company is full of bull. You don't have to pay them anything. You should not pay them anything.

The only recourse they have against the debt at the moment is to repo the house.

Your liability for any shortfall would then fall into your bankruptcy, leaving your ex as the only one liable.

debt_doctor

Hi,

As this is currently a secured loan then it is outside the scope of BR and at this moment in time you are liable.
However, as fermi says, once (if) the house is repossessed, the resultant shortfall unsecured debt will become part of your BR, whenever that happens.
Never sign anything relating to the mortgage or secured loan.

DD

fermi

"Liable" in the sense that they can ask you nicely to pay the loan payments. If you tell them to get stuffed, then all they can do is repo and dump the debt into your BR. They can't do anything else if you refuse to pay.

SteveABC

Something similar happened to me.

I had lots of hassle from First Plus during my BR in the time it took the first lender to repo the house.

They kept telling me the secured debt was not included in my BR, which technically was true, but 100% of my disposable income formed an IPA, so I couldn't pay anything anyway.

My way to deal with it was just to ignore them (and the debt collection agency they instructed to act for them).

Eventually the house was repo'd and that debt fell into my BR and I never heard a peep from them again.

fermi

Even if you had have had spare income, they couldn't have forced you to pay anything or taken action against you personally for non payment. If you don't pay a mortgage or secured loan, the only choice for the lender would be to repossess and sell. Then and only then could they come after you personally for a shortfall, but at that point your BR covers it, so they would be blocked from that.

The lenders know this, so they will do their best to mislead you into thinking that you are obliged to make payments as you are "liable". In this case "liable" means it technically hasn't fallen into yout BR yet. What they want you to think is "liable" = "you must pay". It does not.

minkybunny

Many thanks for all your replies, I'll just ignore them and tell them I cant afford to pay.
I have once again asked the Insolvency service to clarify this so see what they say.

fermi

Doesn't matter what your OR says. You can tell the lender where they can "place" their demands.

arcon5

minkybunny wrote: »

Many thanks for all your replies, I'll just ignore them and tell them I cant afford to pay.
I have once again asked the Insolvency service to clarify this so see what they say.

Ignore them, don't tell them you can't pay, outright ignore them. They don't care if you can't afford it and want to deceive you in to accepting liability, so don't care to entertain them with words. Ignore, ignore, ignore.

And NEVER sign ANY documents they send you. From them AND the mortgage company!!