going bankrupct with a mortage what shall we do

earwig

hi my freind has just brought a flat he brought it on the understand that his then girlfreind would move in with him and pay half the bills but she only stayed for one month and now he is stuck with somthing he cant aford and he cant aford the mortage he needs to go bankrupct and get rid of the flat and debts he has all together

he cant rent the flat out as the rent wont cover the mortage and if he was to sell the flat he would end up owing around ten grand in early payment fees to the mortage company

what he needs to know is how can he hand the keys back to his flat and get the short fall of his mortage debt inculled in his bankrupcty if you can do that he is up to date with his mortage at the momet but is having to use credit cards to live on any ideas thanks

silvercar

There are many things he can do to save himself from bankruptcy and repossession. He could take in a lodger. He could rent the flat out and live somewhere cheaper himself, he would then have the rental income from the flat and could put some money towards it.

Don't confuse bankruptcy and repossession, one doesn't always follow from the other.

If (and its a big if) he wanted to be repossessed and intended bankruptcy, theory is to get repossessed first and the house sold so that the unsecured debt arising becomes part of the bankruptcy.

These are big steps and should be considered carefully and I am not advising this is the way forward.

earwig

thanks he cant take in a lodger it a 1 bed open plan flat also the most he can get for renting it is 550 but his mortage is 762 plus 85 per month service charge and the rent in this area for a one bed flat is 550 so it dosnt make sence to rent his out for 550 then pay some one else 550 there is no way round it the flat has got to go if he would of known that he would be paying it all by him self then he would never of botherd buying it
so what should he do go and get the flat reposed and then go bankrupct or is there an other way

wherediditallgo

Is it possible to swap his (I presume) double bed for two singles? Then maybe a mate might be prepared to share with him. Alternatively, he could use the lounge as his own sleeping area (he could have a futon in there), & rent out the bedroom or put up a partition/screen between the two if there isn't a wall there - he should easily get enough to cover the shortfall in his mortgage. I don't think it's a long-term solution, but it would buy him some breathing space until he can find a better solution.

robkaz69

I recently went bankrupt with a mortgage, i contacted the mortgage lender told them of my intention to go BR and they issued me with a document, this document allowed me to Voluntry surrender my property, in return they would sell (they also have a duty to get best price possible) minus balance of mortgage, advertising costs, auction costs, solicitor costs etc any other monies would be then transfered to your OR or trustee.

As far as current mortgage payment, arrears would also be taken into consideration at sale. Once BR has happened any further arrears is payable my the mortgage holder.

If he wants a repossession without cost he would have to had keys back, rent a flat wait for about 6 months for them to obtain repossession order then go BR