Bankruptcy and Negative Equity - HELP PLEASE

confusedinnottingham

I was declared bankrupt a year ago - long long story but also my ex was declared bankrupt a month or so ago - its been a true horror of a few years - debt cost me a marriage, a company, and its been tough - but I should be discharged soon hopefully !!
My question is pretty simple - we still have a house which the OR didn't take as it was in negative equity - its worth about £160K and the Mortgage is about £200k - so even in the next 2 years I doubt its gonna be worth anything. The mortgage is interest only so I am not paying off a penny as I cant afford it - and I live there alone as my ex lives with her new partner. I am 52 nearly so theres no chance of me ever being able to clear the mortgage - and I am totally lost as to what to do


The way I see it is that I could leave bankruptcy and then be landed with owing £100K - my half of the mortgage - and not be able to pay it off with a repayment mortgage - my mortgage ends in 2027 - so how can I afford to pay off £200k in 12 years --no chance


Can I just walk away and hand the keys back ? ---- what would happen ?


Don't mind losing the house -- too many painful memories


Please help

fermi

confusedinnottingham wrote: »

Can I just walk away and hand the keys back ? ---- what would happen ?

As long as you have not signed anything from the mortgage company after your bankruptcy date agreeing to liable for a shortfall, then any produced from a repossession and sale falls into your BR as a bankruptcy debt meaning you are not liable for it.

confusedinnottingham

Do I need to do this before discharge ?---- or can it be done after ?----during the 3 year period ?


Sorry to sound naïve - I am

debt_doctor

Hi,
It doesn't matter whether you walk away before or after discharge,(no time limit) the shortfall will always be included so long as you don't sign an acknowledgement or re mortgage.
DD

confusedinnottingham

Thanks -- and sorry again -- should I just contact the mortgage company and tell them or should I do it through the OR ?

MEM62

How about taking in a lodger and put whatever you receive in rent towards the mortgage capital? Or even invest it in a S&S ISA and pay off a chunk of the mortgage in a few years time.

As long as you have the house there is a chance that your circumstances will improve and you'll eventually be able to pay off the mortgage. Once it has gone you'll struggle to get on the property ladder again at your age.

owlet

I honestly can't see the big deal about being on the property ladder once over 50 years old. Obviously, if you own your house and everything is ticking over nicely then it's great but when in negative equity and struggling, it's a big millstone. If it was me in that situation, I would hand the keys back and enjoy being debt free - but that's just my personal view!

confusedinnottingham

To be honest - not really happy here - marital home and all - would prefer to wipe the slate clean and start afresh

confusedinnottingham

Would anyone advise wether to simply call the mortgage company -- or inform the OR first ?

fermi

Both I would imagine.

National_Debtline

Hi confused


Probably a silly question as you've no doubt planned for this, but do you have somewhere else lined up to live in the event that you do hand the keys back?


And yes, by all means let the OR know what you're planning to do (if only so they're aware of your address change!) but ultimately it's down to you to go through the voluntary repossession process with the mortgage lender. Do please make sure not to sign anything the lender might push your way.


Dennis
@natdebtline