Mortgage Broker & Bankruptcy

98157643

Hi, I am currently in the process of applying for a mortgage with my partner. I went bankrupt in 2007, automatically discharged in 2008, and the bankruptcy has been off my credit file for some time now - which is "excellent" according to credit expert.


We have managed to get a 35% deposit, and have applied via Woolwich. I was clear and upfront about my bankruptcy with the broker from the outset. I gave him the certificate of discharge along with all of the requested documentation. Last week, he came back and said we had received the mortgage offer. Great.


I thought this was all too easy, and double checked that he had declared the bankruptcy on the application. He hadn't. He says it only needs to be declared if it's inside 6 years from discharge. I'm not convinced about this, as the application forms and the declaration both say "ever been bankrupt". This means, that although I gave the broker the correct information and was upfront with him, he has not passed this information onto the lender.


I'm concerned this will cause an issue with the bankruptcy searches when the exchange happens, and that we may potentially loose the deposits. Any advice on how to proceed?


Thanks

tvfreek

Have you asked the broker about this?

miss_sparkle

We have just moved into our new property, used htb & only had 5% deposit.
Told our broker about our BR which was April 2008, so after yours. We never saw any application forms, just left everything with them so not sure if they declared it or not, we gave them all the dates etc.

Anyway we are in our new house, the solicitor does bankruptcy searches which are K16 search, nothing showed up for us. As far as I know they only show up records for 5 years, and are to make sure you have not been declared bankrupt since the mortagge company credit checked you, currently or about to be made bankrupt. It tells you some info on the land registry site about the searches.

98157643

Thanks for the response Miss_sparkle


TVFreek - yes I talked to him about this. He said he had spoken to them and they were not interested if it wasn't within a 6 year period, and that it doesn't show up on a credit file.


I did call the Woolwich however with a general enquiry (without giving any personal details), and they said that you should always declare it.


So I'm getting conflicting information from the broker and from the bank itself.


Maybe I'm being overly worried - if the solicitors K16 search only goes back 5/6 years then all will be ok. Can anyone else confirm how far back a k16 search goes?

Land_Registry

A K16 search is against a name or names only so is not for a defined period - section 3.6 of our Practice Guide refers

lindsaygalaxy

miss_sparkle who did you go with?

miss_sparkle

Nationwide

6ennie

Hi

I'm interested in finding out what actually happened in the end as I'm currently in a very similar situation. Did the Bankruptcy search during the conveyancing find anything or did everything go through without any issues?

Senior_Paper_Monitor

For the OP, from Barclays criteria ....

Lending to a customer with a history of bankruptcy OR who has been the subject of a Debt Relief Order (DRO) or an Individual Voluntary Arrangement (IVA) can be considered provided any bankruptcy, DRO or IVA was registered more than 6 years ago from the date of submission of any mortgage application and no longer shows on the credit reference bureau information.

It is not acceptable to lend where we are aware that any applicant is currently bankrupt or subject to a DRO and/or IVA.

clanbailey

Hi we had the same worries when we went for a mortgage last year, the broker kept saying only in the last 6 years (which we were literally just out of). We went with it as he was the 'expert' and got our mortgage and our house no problem.
I think for all of us this is a fear until keys are finally exchanged then we can breath!
We went with Platform (Coop) got a fixed rate for 2 years of 3.44%

good luck

6ennie

Thanks clanbailey

I have had the same advise (in the last 6 years), I just hope nothing comes up during the conveyancing searches. I have read mix reports; some saying 6 years and some saying there is no time limit and it is your name which is searched. I have also read that the K16 Bankruptcy search is to search if you are currently, or about to be bankrupt, and other articles/ posts saying it searches if you have ever been bankrupt. I suppose like you said it will be a worry until we have the keys in our hand! We have exchanged contracts and are due to complete in 4 weeks, apart from it being my dream home for me and my family, we are now £15,000 in with the 5% deposit and flooring for the house! My bankruptcy was 7 years ago