Bankruptcy and property

rorysdad

If someone owns a house - no mortgage/charges on it - and declares themselves bankrupt will the house be taken away?


RD

Flm67

The house would probably be sold. Or if it's jointly owned then you would need a third party to buy out your share. Hope this helps?

woodformoretrees

Wondering whether his debts are greater than the value of the house? Would selling and paying off the debts and being debt free not be a better option - otherwise his share will be eaten up with extra costs relating to the bankruptcy.

longtermplanner

I don't think there are any circumstances in which it is better to go bankrupt if you own either a whole or half of a mortgage-free house. You need to look at getting a mortgage to clear the debts or selling the house if you are not in a position to get a mortgage.

Bankruptcy fees if selling a property is involved are likely to start at 10k and can often end up 30k or more.

foxy894

It's better to consult any attorney that could help you. Filing for bankruptcy can be hassle and takes time so think first before making such a decision.

Worcsman

I though in order to go bankrupt, you had to be insolvent. Owning a house is an asset, therefore the judge would throw out the application based on the rather large asset? Unless of course the creditors were owed more than the value of the house of course.

TheGardener

I think the short answer is - yes, the house would be sold. As other posters have said - unless the 'someone' owes way more than the house is worth, then other options should be looked at before BR.

Try the StepChange online debt remedy tool, I found it very useful.

alastairq

I thought in order to go bankrupt, you had to be insolvent. Owning a house is an asset, therefore the judge would throw out the application based on the rather large asset? Unless of course

Not correct....

Being 'insolvent' means, unable to pay debts as they fall due.

Assets are either [a] money assets.[savings, large deposits, etc] or property assets [property, or items]

The Judge in Court does not scrutinise the financial statement.

That is the task of the OR.

The Judge would only refuse a personal petition if they thought the debtor had failed to take proper advice beforehand..therefore may not fully understand the implications of the petition.

Since, once the Petition is granted, all financial affairs are the responsibility of the OR, then, as has been rightly said, a property with equity will be fair game.

Worcsman

Thanks. Now I know

dojoman

foxy894 wrote: »

It's better to consult any attorney that could help you. Filing for bankruptcy can be hassle and takes time so think first before making such a decision.

In the UK going BR is straight forward and does not need the help of a lawyer to do so.