bankruptcy and my house

andrewwales666

hello and hope you can help me,
i have about £15.000 unsecured debt,a mortgage of £82.000 and negative equity of £28.000 through 2 other secured loans but not with the mortgage company and the house is worth about £70-75.000.the cab did advise me that bankruptcy is possible but i would actually like to lose my house so that i could then move to my girlfriends town.is this poosible please
regards
andrew

National_Debtline

Hello there.



If you would like to give the house up there are a couple of ways to do this.

• You can try and sell it;
• You can hand back the keys; or
• You can stop paying and wait for one of the lenders to repossess it.

The difficulties with selling would be that the secured lenders could object to the sale due to the negative equity situation you have. It is possible, however, to seek a court order allowing the sale to complete - usually so long as you can show you're getting best possible price.

You can go bankrupt either before or after the house is disposed of. If you do it before, any future shortfall on the mortgage or secured loans will automatically get included once the house goes. If you become bankrupt after you have disposed of the property you would simply include any shortfalls along with your other debts in the bankruptcy petition.

For the record, for those who are in negative equity it may be possible to go bankrupt and keep the property. Mortgages and secured loans do not get included until they become unsecured, so to speak.

Hope this makes sense!

There is a useful guide to bankruptcy and the home via the Insolvency Service website: http://www.bis.gov.uk/assets/insolvency/docs/publication-word/what-will-happen-to-my-home.doc

We have a good general guide to bankruptcy here:
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=01_bankruptcy

If you have any further specific questions feel free to ask.

Best wishes,

David.

andrewwales666

thanks david
ive been working 12 hours in 2 jobs for the last 7 years but have now had enough and will soon give:money: up my 8 hour job which i am strugglng with,will that go against me.

National_Debtline

In regards to bankruptcy? I cannot imagine that it would. I think having a fair work/life balance is important. Working all hours to satisfy creditors could cause serious health-related implications, and that can never be a good thing.

Best wishes,

David.

andrewwales666

thanks david
would it be best to give my job up first or to say at the bankruptcy meeting that i intend to give it up due to stress
thanks

debt_doctor

andrewwales666 wrote: »

thanks david
would it be best to give my job up first or to say at the bankruptcy meeting that i intend to give it up due to stress
thanks

Hi, It really doesn't make any difference Andrew. The OR has no influence on whether you work or not. If you feel it is right for you to give up work due to illness,pressumably with the support of a 'sick note' from our doctor, then that is your call.
You may need to claim ESA, and will need a sick note to do that.

DD