Going bankrupt

discoferret

Hello, For the past year I have been in an IVA aggrement. But recently my employee has cut my overtime and changed our contracts which means I am losing between £400-£600 a month after tax. This has now affected my payment for my IVA and now I will have no choice but to go bankrupt. My question is should I stop my mortgage payments since I will be losing my flat in the near future? I dont see the point in paying it if im going to lose the flat anyway. Thanks.

Peter.

tigerfeet2006

If I remember correctly the excepted etiquete is to stop paying your mortgage and put the money towards paying for your BR. I'm sure one of the more experianced bods will be along soon to tell you if this is correct

NekoZombie

Um, I thought it was stop paying all credit bills to save your BR but continue to pay essentials like gas, leccy and housing. You won't necessarily loose your flat, depending on how much equity you have.

wherediditallgo

I think Neko's right - you should stop paying creditors, but pay the "roof over your head" expenses, including council tax unless you were already in arrears on them. That's why I stopped paying my creditors, but continued the council tax & rent & my utilities. Even if you are pretty certain you're going to lose your home, you need to look at your mortgage documents before you stop payments - you don't know when you'll be asked to leave the property, & there's no guarantee that you actually will be unless you've already got a court order to that effect. If you've already made plans to leave the property (for instance, you've found somewhere else to live & intend to hand back the keys asap), or already have mortgage arrears, then that's different, but otherwise you should make sure you have a secure roof over your head until well after your BR goes through.

discoferret

Hi, thanks for all your replies. I have only about £10,000 equity in my flat and I owe over £45,000 so I dont think there going to let me keep the flat. I also cant afford to live there on my own. I am up to date with my council tax and always have been. I'm just at that stage where Im not bothered about the flat, its more of a pain then anything else. Im only staying there when I work late otherwise Im over my girlfriends house which is where Im going when my BR goes through. I've spoken to my family and my insolvence practioner and have told them that I'm happy about just handing the keys over to them. So do you still think I should keep paying my mortgage?

backontheup

As Neko says - dont stop paying the mortgage, you might still get to keep your flat (especially if a valuer can get that £10,000 equity down to £0 - as they will be no point in the OR insisting on a sale if all the money will simply pay back the mortgage lender)

Stop paying the credit cards and save up your fee.

tigerfeet2006

Sorry I read this as the OP was definatly going to give his flat up (sorry I was dealing with screaming baby and tantruming toddler and didn't want to leave him stranded ). I stand corrected on re-reading. Agree with Neko, WDIAG and BOTU.

debt_doctor

Hi, if you are absolutely sure you do not want the flat and cant afford the payments anyway then I see no point whatsoever in keeping up the payments. You could put the money towards your fees or other use - whats the point in paying for something you are going to lose, do not want and cant afford ?

Best wishes

DD

NekoZombie

Yes, what the dd says is true. Do think carefully though about whether you could afford it if you had no debt, and also about any possible IPA that would be imposed on a surplus income of over £100. Make sure you work out the true cost before making any serious decisions.