Bankruptcy and a mortgage

lclarke1980

I have approx £40k of unsecured debt and am considering bankruptcy.

I am unsure how this will affect my mortgage. My property is worth approx £75k and my mortgage is £72k. I am wondering what will happen with my house, will I be forced to sell it or will I be able to carry on as I am.

If I can't keep my mortgage is there a chance that my mortgage company would transfer the existing mortgage into my partners name (he earns the same as me) along with the deeds to the house, or would it be as simple as transferring the house into his name and keeping the mortgage in my name.

I really am confused about the best way of going about this.

Please help!!!!

Conor_3

lclarke1980 wrote: »

I have approx £40k of unsecured debt and am considering bankruptcy.

I am unsure how this will affect my mortgage. My property is worth approx £75k and my mortgage is £72k. I am wondering what will happen with my house, will I be forced to sell it or will I be able to carry on as I am.

If I can't keep my mortgage is there a chance that my mortgage company would transfer the existing mortgage into my partners name (he earns the same as me) along with the deeds to the house, or would it be as simple as transferring the house into his name and keeping the mortgage in my name.

I really am confused about the best way of going about this.

Please help!!!!

OK, it's like this. When you are declared, any equity in the house becomes the property of the OR. If you share ownership, your share becomes the property of the OR.

You then have two choices:
1) Sell the house. The OR would get the balance after the mortgage and secured loans have been paid and that would be used to repay your creditors with any left over being repaid to you.

2) You or a third party buys the OR's interest. Either you can re-mortgage, if you can find someone who will, or a third party can "buy out" the OR. The third party can be anyone and they don't have to be a joint mortgagee so for example, if your parents had a load of dosh and were willing to help, they could buy out the OR's interest.

Mortgages are unaffected by bankruptcy as they are not included in bankrupty - they carry on as normal and you pay them as normal.

A mortgage company will not just "transfer" to your partner. They would have to apply in their own right just as if they were buying the property. BEWARE THAT "SELLING" IT FOR BELOW MARKET VALUE WOULD BE LOOKED ON IN AN EXTREMELY DIM LIGHT BY THE O.R. however selling a £75k house for £72k would probably be OK.

fiveyearplan

If your house is worth £75k and your mortgage is £72k there would be no reason to sell. If you own your house on your own (not joint mortgage with partner) then your beneficial interest is £3,000. I don't know how they calculate costs of selling etc into this so your beneficial interest is potentially much less. I doubt very much you would have to sell providing you can still make your payments.