neg equity, divorced and wanting 2 go bankrupt

hazel3603

Hi everyone. This could be long so bear with me!!! Someone I work with needs to go bankrupt. She has been divorced for 4 years, has two kids and lives above a pub(owned by her fianc!). She is not named on the business side of things ad the pub and house above is owned by the fianc!. He ex has a house in Ireland which is around 200,00 euros in neg equity. He rents it out to people who pay half the mortgage and he pays the interest so still in arrears with monthly payments. He has a house in this country which he shares with his gf, has a motorhome and various cars. He earns 50 grand a year. My friend wants to declare herself bankrupt on her half of the deficit as he won't buy her out , neither will he sell the house in Ireland. She has no other debt. Can she still go ahead with BR as he won't meet her half way so communications have dissolved. Once she goes BR will the OR sort out the mortgage side of things, force a property order on the pair of them? She has no assets, pays herself a min wage and has child ben and maintenance payments for the children. Thanking you all in advance. This site was a godsend to me when I went BR 8 years ago and have never looked back since...x

tigerfeet2006

The OR will have no interest in the properties what so ever if they are in negative equity. Would they be likely to move into equity with in the next three years? If not then the OR will not force any sale etc. All that is likely to happen is that if she goes BR is that if the properties are repo'd or sold at a lose at a later date then she will not be liable for the shortfall. Until that happens she is still liable for the mortgage, BR or not and the mortgage firm can still chase her if they wish.

hazel3603

Thank you so much. Will see her in the morning and tell her. Thanks!!!!

hazel3603

sorry to appear dim....can she go through the process of beginning BR, thus forcing a sale once the ex is informed?(by her). Sorry, this is confusing. Our BR petition was so much easier than this one!!!!

tigerfeet2006

Her going BR will not force the sale of the properties. Unless there is likely to be any equity in them in the next three years the OR won't be interested. The mortgage provider won't automatically start repo if she goes BR. Only when the mortgage has not been paid for a while and they are ready to.

She needs to be talking to National Debtline or Stepchange so that she understands what will happen.

hazel3603

Fantastic and Thank You!!!!

hazel3603

oh blimey- one more question!!! When the lady in question applies for BR, will her name be taken off the mortgage and if or when the house is repossessed or sold at a loss, will the mortgage company still come after her years later, for instance, if the ex is forced to sell etc? All od Ireland is having massive issues so the house is likely to never move away from neg equity......(sorry!!)

National_Debtline

Hi Hazel


No, your colleague's name will not be taken off the mortgage as a result of the bankruptcy - at this stage it is still a secured debt and thus not automatically written off. Whenever the house is repossessed or sold, the "shortfall" that she would have then been liable for is covered by the bankruptcy, however far apart bankruptcy and repossession occur.


The whole point of her going BR is that the mortgage lender will not be able to pursue her after the property's sale/repo. I hope that this and tigerfeet's responses make things clear, but as suggested perhaps your friend ought to contact a debt advice charity directly in order to get it from the horse's mouth.


Dennis
@natdebtline

hazel3603

you're all superstars!!!!! Thank you so much!!!!