Bankrupcy Question - Bit Weird?

jaysancort

Hi All

Myself and my partner have been together for 12 years, I moved in with her. We bought our house from the council in 2007, a right to buy. (Its an interest only mortgage, Property Value £80K Mortgage £58K)

The rent book was in her name so the deed is now only in her name but the mortgage is in both our names as I was and am the main earner.

The question is this - Is there a way for only me to go Bankrupt and not effect the house, I don't want my partner and kids to suffer because I need to go Bankrupt.

Its not that the debts are unmanageable but that I have such a bad credit file I cannot get a better job due to employers doing credit checks.

Have spoken to debt advisors and no one can give me clear advice.

tinkerbell28

jaysancort wrote: »

Hi All

Myself and my partner have been together for 12 years, I moved in with her. We bought our house from the council in 2007, a right to buy. (Its an interest only mortgage, Property Value £80K Mortgage £58K)

The rent book was in her name so the deed is now only in her name but the mortgage is in both our names as I was and am the main earner.

The question is this - Is there a way for only me to go Bankrupt and not effect the house, I don't want my partner and kids to suffer because I need to go Bankrupt.

Its not that the debts are unmanageable but that I have such a bad credit file I cannot get a better job due to employers doing credit checks.

Have spoken to debt advisors and no one can give me clear advice.

Two things. Yes it will effect her.

One as you have a joint financial link, and it will effect the house, you're on the mortgage, are the main earner, so will have significant BI. With 20k+ equity.

Bankruptcy is only for people who are insolvent. If your debts are manageable then you may even find the petition refused by a judge.

What line of work? I'm asking because, lets be honest BR is the ultimate black mark. More so than showing you're being responsible and managing your debts. If they aren't unmanageable, why are you not paying them back? Why is the credit file a mess? When employers do credit checks, it's part of a package. To see how much debt you have and if you're a financial risk. Plus to judge you on how responsible you are, how much you shirk on your responsibilities. Which usually comes with cleared jobs. Unfortunately that's just the way it is.

It would look better if you paid what you owed, rather than petition for BR with any job I know of, it would also mean you are clear after a set period. Some jobs will ask, and check if you've EVER been BR.
Which can pretty much bar you from a job, depending on what it is.

alastairq

Hi, & welcome!

Its not that the debts are unmanageable but that I have such a bad credit file I cannot get a better job due to employers doing credit checks.

Firstly, to comment on the above....if you had a Bankruptcy on your credit records, nothing could, effectively, be worse.

It would stay on your records for 6 years from date-of-petition.

And, if anybody with a reason should ask, you would need to declare that BAnkruptcy for ever.

Plus, record of your BAnkruptcy would be in the public domain in perpetuity.[London Gazette for England & Wales]

There isn't a way you could petition for BAnkruptcy, and it not affect your house & home. The Official Receiver would seek to realise all your assets...which would include your beneficial interest [which would vest to the OR] in the house.

The OR would want at least 50% of the equity on the property [your 'share' of the equity...] This is regardless of the fact your wife is the sole name on the deeds....especially as you will have patently contributed towards the mortgage payments.

The first question you need to ask yourself is, are you insolvent?

This means, are you unable to meet your debts, as they fall due?

If not, then you need to seek a way of managing your existing debts.


This is why perhaps you feel you have not received 'clear advice?'

Firstly, you need to list all your debts....monthly payments, etc.

Draw up a 'statement-of-affairs' to see exactly how your expenditure for essential living stands?


And Tinkerbell beat me to it!!

TheGardener

Hi - I would agree with the other posters - a poor credit file can be improved with management but BR will blow your credit record out of the water completely for a minimum of 6 years and potentially for many years after that.
Try the StepChange online debt remedy tool and then seek some more advice from them.
BR is not the answer to a poor credit rating - proper management of your income and expenditure is.

woodformoretrees

Bankruptcy is definitely not the answer to making yourself more employable if you think you're having trouble with employers now. It strikes me it would be the absolute opposite.

If your debts are manageable then pay them each month as they become due. This alone would improve your credit references in a way that Bankruptcy never, ever will.

jaysancort

Okay I was not clear, I am insolvent. I cannot pay any of my debts, the mortgage is in arrears, council tax not paid. Im on the sick (SSP).

tinkerbell28

jaysancort wrote: »

Okay I was not clear, I am insolvent. I cannot pay any of my debts, the mortgage is in arrears, council tax not paid. Im on the sick (SSP).

THAT changes everything and is in complete conflict with the op. You are insolvent then.

Right you need professional advice on how this is going to effect the house, as I presume your other half does not have access to be able to buy you out?

But be under NO illusion. Going BR will not wave a magic wand over you're employment prospects. Debt counsellors won't really be able to advise on it, because it's all to do with why you are being vetted.

If you're being refused now, you will be refused when bankrupt too, for a good few years at least. Many employers who credit check and are BR, friendly would ask to see a good few years post discharge of responsible management.

It depends what your trade is. Some people when finically checking are looking for debt levels. So risks of fraud/corruption. They also look for financial responsibility. Some jobs bar you, if you haven't kept good order of your finances. Then there is jobs which require clearance, so rightly or wrongly, a person in financial dire straights could be seen as unstable, unreliable, as well as it risk of corruption.

It all depends on the job, see I know for my OH that would be curtains, for ever. As they ask have you EVER for us.

mattannar

I may be wrong but I was under the impression when we took our mortgage out, that if you wer on the mortgage you had to be on the deeds as what are you borrowing against.

longtermplanner

If you are not on the deeds as you were the main earner, the OR is likely to decide that you have "beneficial equity" in the house, assuming that there is some equity.

Your choices would seem to be:
- get better and sort your finances out (ok getting better isn't exactly a "choice" but is it a possibility?)
- your partner working more - that is a pretty small mortgage you have
- struggling through until Support For Mortgage Interest kicks in (see https://www.gov.uk/support-for-mortgage-interest_
- selling the house, using the equity for a deposit to rent (when you will be able to get housing benefit) and clearing as much as possible of your other debts

montymud

jaysancort wrote: »

Okay I was not clear, I am insolvent. I cannot pay any of my debts, the mortgage is in arrears, council tax not paid. Im on the sick (SSP).

I feel your pain, I really do. I would pretend to everyone that everything was hunky dory when it absolutely was not. It was a massive thing for me to finally admit how dire things really were and I am petrified of any form of credit ever again. I am not long bankrupt so the wounds are very fresh, if only we could go back in time eh?!

The bankruptcy will undoubtedly affect your other half I'm afraid.

You really need to seek the help of a professional. There are so many people out there that can help and do not charge for the advice. Bankruptcy should only be the route you take when there is really no other option. It will affect you for a long long time.

alastairq

I feel your pain, I really do. I would pretend to everyone that everything was hunky dory when it absolutely was not. It was a massive thing for me to finally admit how dire things really were and I am petrified of any form of credit ever again. I am not long bankrupt so the wounds are very fresh, if only we could go back in time eh?!

'BAck in time'?

We all think this about our situations..yet...would things have really turned out much different?

For sure, we could have adopted different decisions, but....would those decisions proved to be any better?

Or, just different?

I think..on this forum at any rate, most of us have been far from profligate with our finances......money has been spent on what we considered , 'essential' stuff....yet debts mounted?

Things would always be viewed differently, at another time?

We all know the promises our employers made years ago, about how our earnings would progress, etc.

And..they did not[for me, the Government lied through their collective teeth!!]

We all rightly assumed our assets would increase in value...everybody told us they would, didn't they?




SO...would things really have turned out differently, if another path had been followed in the past?

''If only'' isn't the way forwards, guys....