Unsure whether to take the plunge!

Annon

Hi all

I'm unsure whether to do it or not and just need a few answers to how it will effect my personal circumstances.

My dh and I jointly own our home which is in negative equity (mortgage was 87,500k and we owe 92k due to missing payment interests). The property is 50% shared ownership so we pay rent as well.

We have no items on hired purchase and my car is owned and insured by my mum.

I am wondering if I do declare BR would I lose the house?

I'm approximately 8k debt and at the moment paying between 1-£10 per month to my creditors. All our utilities are higher too because of missed payments.

For the passed year or so we have paid our mortgage, rent, gas meter, electric meter and other utilities efficiently but do not have a lot left at the end of the month to put more towards the debts.

IF

Hi Annon and welcome to the Bankruptcy (BR) Board. I'm sure other posters will help, your first step is to make a list of all your creditors, debts and assets. Secondly and most important is contact one of the following debt charities. Please try these they don't charge and are impartial. They will go through all your options with you and if they suggest bankruptcy then come back to this board and we will help you all we can. Also if your not ‘clicking’ with one of the Debt charities do try another. We advise you to try at least two others for your own piece of mind.
Your BR could be refused if you have not sought advice.
Advice on here does not count, this has to be from one of the Debt Charities, an IP, an Accountant or a Solicitor. The Judge just wants to be sure that you can never come back and try and overturn the order on the basis that you were not aware of all the consequences.

* Blue text on this forum usually signifies hyperlinks, click on the blue links below *

Main recommended sources of help:

• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)
• StepChange (formerly CCCS) - Website: StepChange Telephone: 0800 138 1111

Others:

• Business Debtline
  - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

Please don’t do anything rash take your time and weigh up your options and read everything you can.


For ‘essential’ BR info the ‘Look here first’ sticky by Fermi.

BR friendly home insurance thread.

BR Friendly Bank Accounts ~ [Updated Sep 2012 re: Co-op Cashminder withdrawal]

BR Abbreviations

Beth's Guide Reasons for your BR

Charities who help with BR Fees

Bankruptcy NDL Guide

Basic Bankruptcy Advice & Guide NED CAB

And do remember we’ve all been through this and anything you don’t understand don’t be afraid to ask.

Best wishes
IF...x

alastairq

Hi...whilst it is clear you are in a debt spiral situation, I'm not sure a BR petition would be of a significant advantage to you....given that the debt situation you have arrived at would only be repeated after BR...if you remained as you are in other respects?

HOwever, if you decided that you current home is too expensive to finance, and decided to move out to....for example, a rented home, then BR would indeed prove beneficial, especially if dealing with any shortfall of equity.

A BR petition may not result in having to sell the home. [you mention negative equity?}

Much will depend on whether you can continue to finance the mortgage and rent?

I also assume you would both petition BR?

adyj73

I'd be interested to know what your joint income is as if you say you have no other loans or credit cards other than your mortgage and part rent. This would suggest you have a property far in excess of what you can afford and not knowing when you bought it or the advice you received i wonder how you came to be offered the mortgage on it. I am not saying this in judgement of you but more towards whether you may have been mis sold when you bought??? For someone to have no other debts - but to not be covering their housing costs (all things remaining equal ie income) suggests you bought in way beyond your means and I would be looking at who authorised the mortgage....

Annon

Thank you for your kind replies.

We got our mortgage with preferred mortgages 6yrs ago, as long as we both earnt 17k a year which we did (we had ccjs and poor credit at the time but preferred accept people with ccj's and the like) As it was one of these high interest places for people with bad credit mortgages we were paying £800 a month but when the interest rates went down we now pay £280 and it has been that way for quite some time but that's not to say it won't shoot back up tomorrow!

We're in a very bad place financially with the house. At the moment because the mortgage is so low and the rent is £335 a month it's not too bad and we're managing that side of things. But as we're in negative equity and to sell the house it's going to cost 5k for estate agent and solicitors fees we can't afford to sell.

The mortgage was a mistake and I don't mind going into renting but apart from repossession and finding a rental agent who will accept our poor credit what else can we do?

Dh doesn't want to declare BR even tho his debts are worse than mine. I'm around £8k minus the mortgage and he is nearer 40k

alastairq

HI..............if you move out, to rent, and cease paying the mortgage, etc, on the old property...then..eventually...the mortgagor will apply for re-possession, and..eventually again...sell the property.

They will then pursue either or both of you for the shortfall, and probably back-rent as well.

Could you both afford to pay this particular debt?

If the answer is 'no'...then BR is a way forwards, with the shortfall [now unsecured] falling into the BR.

Be aware, you may be responsible for the Council TAx on the old property until it is actually sold [depends on Local Authority policy in this respect]

However..if you gained your lender's agreement, and sold the property now, could you still afford to stump up the shortfall? [and fees?]

If DH is unwilling to look at BR, how does he suggest he deals with the debt situation?

[bearing in mind, you have joint liability towards the property?}

As If says, contact one of the debt charities for advice on dealing with your debts?

There are other debt solutions available, such as IVAs and DMP's...but go through the debt charities first [CAB, etc].