Urgent ish. What to tell mortgage company pre BR

cancatsdance

I am planning on going BR and will be calling the mortgage company ASAP and telling them I can no longer pay the mortgage.

Should I mention going BR in a months time

Also this is a joint mortgage with my ex wife

The property has tenants in it

Also what do I say to the mortgage company

Regards

Trinitrotoluene

If you haven't already I would consider contacting one of the debt charities to discuss your current situation.

Is your current property in negative equity? Are the tenants that are in not paying the mortgage that is on the property?

Is your ex wife going bankrupt also?

cancatsdance

I have been with cccs for 2 years so already tried to take control of the debt.

cccs have advised me that BR is the right option.

my ex I could not even care about as she walked out on my and my son paying nothing towards anything ever. and in fact created this debt

the house is in neg equity of 30k and a secure loan on it of 20k

woop

wayforward_2

We had a property in negative equity that we were renting out when we went BR - the OR told us that we could continue to own the property and collect the rent but that the rent must be paid to the OR as an income and they would not allow us to use the rent to pay the mortgage on that property as it wasn't our home.

This effectively meant the property had to be either sold sharpish (but the mortgage company would not allow us to sell it for under the mortgage value) or be repossessed. Also the OR wrote to our tenants very quickly - ie before we had had a chance to tell them which was awkward.

Best of luck

cancatsdance

To be honest I just want the property gone now and not come out if a BR with the house round my neck

longtermplanner

If you aren't living in the property then there is no downside to telling the 2 secured lenders that you will be going bankrupt. There isn't any upside either though! Personally I wouldn't tell them.

But I would want to give my tenants as much notice as possible, it's not their fault they are caught up in this situation.

Trinitrotoluene

Just out of interest, why is the rent from the tenants not meeting the cost of the mortgage? I am assuming the mortgage is much higher than what you are pulling in in rental costs?

It's important you do this the right way as you could land yourself in hot water if you don't. I think there is a level of complexity with your ex wife as she is on the mortgage also, regardless of how you feel about her, if the mortgage is joint the secured lenders are going to get on at her to pay this which could have other implications.

If you have custody of your son full time have you considered CSA against your ex wife?

Personally I wouldn't tell the lenders but I would give notice to your tenants ASAP as they are going to repossess it eventually. You have to be careful here, I don't your personal situation and this isn't legal advice but if you are charged with paying the mortgage on your ex wifes behalf, and you leave the tenants in while not paying the mortgage you may be in the realms of fraud.

National_Debtline

Hello there,

Once you become bankrupt, the property will 'vest' with the official receiver/trustee. Should you decide to not pay the mortgage, it's likely that the property will be repossessed at some point. It doesn't matter if this takes place before or after your bankruptcy, any shortfall due to the negative equity will be written-off under the bankruptcy. You must not sign a 'deed of acknowledgement' after the abnkruptcy order date - as this could make you liable for the debt again. If you go bankrupt it would remove your liability from any joint debts, your ex-partner will still remain liable (unless they also go bankrupt).

Best wishes,

David @ NDL.

cancatsdance

Several months ago I was in a position to pay the mortgage but since my divorce 12 months ago I now have a high rent to pay.

Hence I cannot afford to pay the mortgage

mookie2805

You must not sign a 'deed of acknowledgement' after the abnkruptcy order date - as this could make you liable for the debt again. If you go bankrupt it would remove your liability from any joint debts, your ex-partner will still remain liable (unless they also go bankrupt).

Is this right? My partners ex went bankrupt whilst owning 32% of the house. There is also a secured loan of 25k all in joint names. Now he is discharged is he free from liability for the mortgage and the loan?

tiggerbodhi

mookie2805 wrote: »

You must not sign a 'deed of acknowledgement' after the abnkruptcy order date - as this could make you liable for the debt again. If you go bankrupt it would remove your liability from any joint debts, your ex-partner will still remain liable (unless they also go bankrupt).

Is this right? My partners ex went bankrupt whilst owning 32% of the house. There is also a secured loan of 25k all in joint names. Now he is discharged is he free from liability for the mortgage and the loan?

Yes this is right, any debts incurred before BR are included in the BR, if there are secured debts that are still secured at this time or any time after BR and they effectively become unsecured if the house is re-possessed or sold (if in negative equity) they will be provable debts for your partners ex into his BR, in this case if there is money outstanding the Mortgage/loan company will be looking at the other party to the loan to pay it, in your example your partner.


For example Mary and John have a joint mortgage on a house of £220K, it is re-possessed or sold for £200K there is £20K outstanding, in theory Mary and John Pay £10K each, but if John goes BR Mary is liable for £20K.


If there is equity in the house Mary and John will get fair shares of this once sold, Johns though if he is not discharged will go to the OR, considering if he went BR with equity in the house the OR would have wanted to release this unless it was less than £5K or Mary could buy out the "beneficial interest".


It does get very messy though if a divorce is involved and there are children as I believe the court cannot order the family home to be sold until they are 18, in this case a charging order would more likely be put on the house so that when it is sold in the future the trustees of the OR get their cut.