Urgent ish. What to tell mortgage company pre BR

alastairq

If there is a mortgage & secured loan, in both the ex's name, and your partners..even though the ex is bankrupt, both are effectively 'liable' for the secured debts.

Bankruptcy affect unsecured debts only.

Secured debts remain in situ.

However, once the security is sold [ie the property?], then any shortfall of equity becomes an unsecured debt.

Now....if one party has petitioned BR, then..with a joint liability, as above, the other party becomes wholly liable for the shortfall.

This is the downside of assuming marriages remain complete for life....and the downside of joint accounts.

the_worm_that_turned

This is what I would do (and indeed have) if I was struggling to meet my obligations to banks, building societies etc., particularly if "bankruptcy" was being proposed as an option (although in my case, thankfully, it was not). This is NOT advice and I am not suggesting anyone else should attempt this based solely upon reading this.

I have been discussing on a separate thread (Credit Report thread) my stories of how I have "fought back" with very simple but, in my opinion, effective methods.

I have learned that not paying the banks etc anything is the worst thing to do. It immediately puts one in dishonour and potential breach of any contract or agreement.

What I did was review which creditors I genuinely had a contract with and therefore had an obligation to "pay". I then calculated exactly what I believed I could afford to pay to each monthly with enough money to enable me to survive (feed, clothe etc me and family). In my case I did not include my mortgage obligations as I was not certain of the process at the time, but if felt that I were facing "bankruptcy" then I would definitely include the mortgage too.

To those creditors where a genuine obligation lay, I made an official offer as below, with a cheque stapled to the offer:

Official Offer
Offer to [bank] by [my name] to now operate on account [number] £[affordable amount] effected monthly as satisfaction on all account demands/obligations

Once the bank had removed and cashed the cheque I interpreted their actions as an acceptance of the offer and then continued to make monthly payments in accordance with the contract. If my financial position changed I just changed the offer amount up or down with a new offer that superseded the last.

Like I said though, this is NOT advice and no value is assured to this post and I accept no liability for any action taken by anyone following their reading of it.

tiggerbodhi

the_worm_that_turned wrote: »

This is what I would do (and indeed have) if I was struggling to meet my obligations to banks, building societies etc., particularly if "bankruptcy" was being proposed as an option (although in my case, thankfully, it was not). This is NOT advice and I am not suggesting anyone else should attempt this based solely upon reading this.

I have been discussing on a separate thread (Credit Report thread) my stories of how I have "fought back" with very simple but, in my opinion, effective methods.

I have learned that not paying the banks etc anything is the worst thing to do. It immediately puts one in dishonour and potential breach of any contract or agreement.

What I did was review which creditors I genuinely had a contract with and therefore had an obligation to "pay". I then calculated exactly what I believed I could afford to pay to each monthly with enough money to enable me to survive (feed, clothe etc me and family). In my case I did not include my mortgage obligations as I was not certain of the process at the time, but if felt that I were facing "bankruptcy" then I would definitely include the mortgage too.

To those creditors where a genuine obligation lay, I made an official offer as below, with a cheque stapled to the offer:

Once the bank had removed and cashed the cheque I interpreted their actions as an acceptance of the offer and then continued to make monthly payments in accordance with the contract. If my financial position changed I just changed the offer amount up or down with a new offer that superseded the last.

Like I said though, this is NOT advice and no value is assured to this post and I accept no liability for any action taken by anyone following their reading of it.

IMHO a very risky and potentially disastrous way forward, or actually no way forward at all, as most banks etc will accept reduced payments, they love them as they can then levy; Late payment charges, failure to pay contracted amount charges, extra interest and anything else they can think of.


They will sell the debt on to a CRA who will hound you and surprise surprise put on more charges, your strategy is just head in the sand, the debts do not go away, they get bigger and you are paying out every month just to stay still with no hope of getting credit in the future, moving house, paying bills on budget schemes and more.


Your advice is only suitable for short term issues with personal cashflow or until you wake up and smell the coffee and deal with your debts long term, if I had taken your advice I would still be many thousands in debt, paying out every month with an escalating debt.