Mortgage after Bankruptcy

rockingbilly

ukamber1 wrote: »

Hi silvercar,

If it was 7 years later, then I agree, you'd hit a grey area but under section 382 of insolvency law, the shortfall is bankruptcy debt even "after discharge from bankruptcy" as it was a debt/liability which the OP became subject after bankruptcy because of an obligation incurred before his bankruptcy.....Insolvency law doesn't put "any" time restrictions on this...thats why they include "contingent debt" in the legislation, as the debt is based on a "future event" (in this case a repossession)

In this case the OP's repossession took place over 2 years after but as it was bankruptcy debt from the start of the bankruptcy, the moment the shortfall became contingent debt and settled under bankruptcy, is the moment when the default date needed to be corrected to reflect the bankruptcy...If there is no bankruptcy, then the repossession date would stay the same but where bankruptcy is present, insolvency law has final say....

Just wanted to add.....

Closed accounts stay on file for 6years so the mortgage account will stay on the OP's credit report 6 years from the date the Lender sold the property BUT as bankruptcy debt, the default marker(repossession) should be backdated to the bankruptcy order (April 2010) when this is done, the default should automatically drop off the credit report as its been over 6 years since the bankruptcy and the mortgage account should just show as up-to-date and closed.

If the OR is satisfied that there is no equity in the property, to put it bluntly, they will want rid.
The bankrupt would pay the OR (it used to be a £1) would then be offered the property back to take over the mortgage and continue to live there.
Any property which cannot be realised is quickly got rid of by first offering it to the bankrupt.