BR and repossesion**help plz

bobblebot

Going BR 27th June managed to get an earlier date (original was 15th July) but being pregnant and so stressed waiting doesn't mix well so a lovely lady at the court managed to bring it forward.
Anyhows what to do with the house is the question:
Its in negative equity situation with a 8K redemption charge to boot, had to go on Income support as pregnant but am looking for work (had interview yesterday so fingers crossed but no news as yet!). IS won't pay mortgage interest for 9 month but would pay rent-ludicrous I know! So I realsie house will get repossessed as can't pay and can't sell.
My concern is that if I wait for house to get repossessed, which gives me a few more months to get a house to rent I will then be liable for costs and shortfall of sale as occurred post BR. I have to go BR this month as can't cope with stress and phone calls etc so can't wait for repossession. I contacted insolvency service and was tole I would never become liable for payment of shortfal that even if happened post BR it would go into the BR. But reading here seems to suggest different.
I've found out I can voluntary let the bank repossess (spoke to bank today) by completing a form befopre BR to make sure shortfall goes into BR but then I only have a couple of weeks to get enough money to move yikes!!
Does anyone know the facts about BR and repossession?
Does anyone have experience of voluntary repossession and how long before sending form back you have to move out??

Al help much appreciated-sorry so longwinded x

fermi

I'm sure the Insolvency Service is correct regarding the shortfall caused by your negative equity, as that is in effect an unsecured debt as of the current time (i.e. it cannot be realised by sale of a property). This must be something they see reasonably often.

However, I'm no expert on the whole issue of houses and BR, and I'm not sure about your liability for fees etc, or the order and time scale you should do things in.

Hopefully, someone else has direct knowledge or experience in this area can answer this.

Toto

I would call the local council and get advice. As you are going to be repossesed and are pregnant you could be offered council housing which is an awful lot cheaper than private rent and secure too.

fermi

I checked the negative equity part, and found this:

Where there is a shortfall on the sale of the mortgaged property, the mortgagee becomes an unsecured creditor for the remainder of the debt.
Where a property is sold after the bankruptcy order the mortgagee’s proof must be limited to what was due for principal and interest at the date of the bankruptcy order after deducting the proceeds of the sale

Which basically says that if the house is sold after BR, the negative equity becomes a debt that is included in the bankruptcy.

At least that is my understanding.

bobblebot

Thanks for your help...so if its repossessed and they seel for £140'000 and the mortgage is $167'000 the shortfall becomes included in BR.
What about court costs, mortgage arrears after BR and selling fees etc will I be liable for these?

Thanks for all help.