Bankruptcy and joint mortgage

millie84

I am considering going bankrupt, and I have a mortgage with my ex partner. I have tried (unsuccessfully) to get my name off the mortgage, after 4.5 years.
If I was to go bankrupt, what would happen with the mortgage? Would my name be removed?
I have considered a DRO, but I don't think I fit the criteria.
Also, would it affect my current partner, whom I live with but we have no joint debts or commitments? I don't want to affect his credit rating.

debt_doctor

Hi,
You are correct in that you do not fit the DRO criteria if you are still named on a mortgage contract.
If you went bankrupt, your name would not be removed from the contract, and as it is a secured loan it is outside the scope of bankruptcy.
However, if you went BR and in sometime in the future the property was repossessed and there was a shortfall then the shortfall would always be part of your bankruptcy, whenever than happened.
Does you Ex still live in the house? If they re-mortgaged in their own name then you would be off the mortgage.
You need to get advice from CAB or other as to other implications of BR. If the property has equity then the OR may want to pursue the interest in the property.
If you don't have any joint borrowing or joint bank accounts then your new partner will not be affected by any dip in your credit rating.
DD

millie84

He still lives in the property, I've tried to ask him to buy me out or we must sell the house. Currently, he refuses to tell me which he will do, leading me to think that he can't get a mortgage on his own or afford to buy me out.
There is around £12K equity in the property.

HappyMJ

millie84 wrote: »

I am considering going bankrupt, and I have a mortgage with my ex partner. I have tried (unsuccessfully) to get my name off the mortgage, after 4.5 years.
If I was to go bankrupt, what would happen with the mortgage? Would my name be removed?
I have considered a DRO, but I don't think I fit the criteria.
Also, would it affect my current partner, whom I live with but we have no joint debts or commitments? I don't want to affect his credit rating.

You won't affect your current partner's credit rating but it will affect him in that he can't use your income to secure a mortgage if he were to buy a house for you to live in. It also might make it a little more difficult to rent another property as your credit will be checked on a joint tenancy agreement and the bankruptcy will be seen by landlords.

debt_doctor

It depends if he can be reasoned with. Is it £12k minus sale costs and the arrears?
Would always be best to sell if possible rather than re possession - does the lender do an assisted sale scheme? - the better ones do, often they will bear or discount the selling costs.
How much other debt do you have?
DD

millie84

The £12k is not minus sale and court costs. There are no arrears on the mortgage.
I have around £15k of debts, one loan is joint.
I'm in the position that my next step is obtaining an order for sale. My solicitor told me I can claim against my ex for him to pay all costs because he has been obstructive and unreasonable, but I don't know if this will happen in reality. I cannot afford to pay all the costs myself.

debt_doctor

Orders for Sale can be difficult to obtain, and potentially costly. Would a District Judge put someone out of their home if their mortgage was up to date to settle what amounts to a credit debt (your interest in the house)?
Genuinely hard to say - and his non co-operation would certainly come in to it.
Costs are often awarded.
DD