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Bankruptcy and Mortgage

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Hello all. Hope you are all well. I have previously taken a lot of advice and help from this website so I would firstly like to say thanks to everyone who contributes.
Basically, after 10 years of juggling debt and 2 years ago going into an IVA, COVID19 has hammered in the final nail by causing my redundancy from my job. Therefore, it looks like bankruptcy is on the cards to finally have this decade old problem resolved once and for all. I'm so fed up I no longer care about personal possessions however there is one issue I face; my house.
I live with my partner who has a 50% share and we are both on the mortgage. I would very much like for her to retain the house and she has the means to do so. However, she is unlikely to have the "affordability critera" to officially take on the mortgage by herself despite her already doing so. She does have enough savings to buy out my equity which is relatively small as we have only lived here a few years. The big question I can't find the answer to anywhere is if after the bankruptcy order (which I plan on paying for with my final redundancy employment payment) I can stay on the mortgage once my partner has paid the equity? Obviously I'd still be contributing to the mortgage so I'd assume my beneficial interest would raise slightly which again wouldn't be an issue but I just want to try to save the house for her.

After all I've been through frankly I'd live on the streets these days but she deserves better.

Thanks guys,
A Lost Soul.

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Comments

  • sourcrates
    sourcrates Posts: 29,394 Ambassador
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    Well how much debt do you have, going bankrupt with a property is not usually a good idea.
    Bit more info required, what debts do you have and to whom, are they all enforceable ?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • lostsoul2020
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    Well how much debt do you have, going bankrupt with a property is not usually a good idea.
    Bit more info required, what debts do you have and to whom, are they all enforceable ?

    £33,000. All unsecured. Lloyds is the biggest at £15,000 unsecured loan. The rest were credit cards and small loans here and there and things like store credit. We only have a small amount of equity in the house which is why my partner can buy it out. I just wonder if I can stay on the mortgage. Obviously I'd like to avoid bankruptcy but I'm in IVA, have already missed a few payments due to a situation last year and now have no job with no future job on the horizon. Any advice is welcome.
  • sourcrates
    sourcrates Posts: 29,394 Ambassador
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    Well an IVA takes about a year to fail, so don’t be hasty, as a property is involved, you need advice from National Debtline as to your best,options.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • lostsoul2020
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    Well an IVA takes about a year to fail, so don’t be hasty, as a property is involved, you need advice from National Debtline as to your best,options.

    Yeah, I'm just trying to find the answer to wether a bankrupt can continue paying a mortgage once the equity is bought out. Simple question I'd think is common but can't find an answer anywhere.
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
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    Well an IVA takes about a year to fail, so don’t be hasty, as a property is involved, you need advice from National Debtline as to your best,options.

    Yeah, I'm just trying to find the answer to wether a bankrupt can continue paying a mortgage once the equity is bought out. Simple question I'd think is common but can't find an answer anywhere.
    I'd say no but as sourcrates said, you need advice. From one of the debt help agencies. I recommend StepChange, sourcrates says National Debtline. I recommend StepChange because they helped me so much when I had to take out a DRO. 

    An agency will give you all the help and advice you need. They'll help you file your bankruptcy as well, if you like. Nobody ever judges you, either, which I found really good because I felt awful.  Here's a link for you : https://www.stepchange.org/how-we-help/bankruptcy.aspx

    I'm so sorry too because you're obviously totally depressed and need help with that, I know how it feels because I've been there. Except you have your partner and I was alone. If you can bear it, please try to have a chat with your GP. He/she could refer you to a therapist and that may help. You're at your lowest now but the only way is up, and your partner can help. Try not to despair, although I know it's hard not to. I've been in your shoes, my debt was smaller but as I was on my own my debt corresponded to that but I found having a DRO is no different from a bankruptcy except the amount of debt is smaller. It still stays on your credit report for 6 years and it's difficult to get credit, etc. I'm out the other side now, though, I made it. You can make it too. If you speak to someone at one of the debt help agencies, that will help too. You do feel better because you realise that there IS light at the end of the tunnel and you can reach it. Your partner will surely be supportive, too. You've got a lot going for you but I do understand how depressed you are feeling. Things WILL get better, they will.


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  • lostsoul2020
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    MalMonroe said:
    Well an IVA takes about a year to fail, so don’t be hasty, as a property is involved, you need advice from National Debtline as to your best,options.

    Yeah, I'm just trying to find the answer to wether a bankrupt can continue paying a mortgage once the equity is bought out. Simple question I'd think is common but can't find an answer anywhere.
    I'd say no but as sourcrates said, you need advice. From one of the debt help agencies. I recommend StepChange, sourcrates says National Debtline. I recommend StepChange because they helped me so much when I had to take out a DRO. 

    An agency will give you all the help and advice you need. They'll help you file your bankruptcy as well, if you like. Nobody ever judges you, either, which I found really good because I felt awful.  Here's a link for you : (Had to remove link to post)

    I'm so sorry too because you're obviously totally depressed and need help with that, I know how it feels because I've been there. Except you have your partner and I was alone. If you can bear it, please try to have a chat with your GP. He/she could refer you to a therapist and that may help. You're at your lowest now but the only way is up, and your partner can help. Try not to despair, although I know it's hard not to. I've been in your shoes, my debt was smaller but as I was on my own my debt corresponded to that but I found having a DRO is no different from a bankruptcy except the amount of debt is smaller. It still stays on your credit report for 6 years and it's difficult to get credit, etc. I'm out the other side now, though, I made it. You can make it too. If you speak to someone at one of the debt help agencies, that will help too. You do feel better because you realise that there IS light at the end of the tunnel and you can reach it. Your partner will surely be supportive, too. You've got a lot going for you but I do understand how depressed you are feeling. Things WILL get better, they will.



    Thank you, I appreciate it and I'm glad to hear you are better now. I am booking an appointment this week with my GP as you've suggested. I'll contact StepChange tomorrow. Thank you for your advice I appreciate it. It's just difficult as we were on the right path and everything was looking up and over the past few months it's gone from sunshine to rain with the pandemic costing me my job. It's just tiring having the same old story of on the right path then bam something comes from around the corner and hits me back down. We don't really want to lose the house as it will cost more to rent anyway and we worked so hard to get into this place.

    Anyways I'm just rambling now so, thanks again.

  • fatbelly
    fatbelly Posts: 20,978 Forumite
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    I doubt stepchange will be allowed to help as you are under an insolvency practitioner but give it a go and let us know what they say.

    At Citizens Advice we would be told to refer you back to your own IP who will know the details of the agreement you signed..

    One option the IP has is to petition for your bankruptcy, which will save you the £680. It doesn't happen often but in your situation the first people you need to talk to are your insolvency practitioner, who, incidentally, may have a claim on  your redundancy payment, depending on how much it is (you're normally allowed to keep an amount equal to 6 months of pay, but repay more if you find work within this period)

    Just to be clear,  you're only allowed one form of insolvency at a time
  • lostsoul2020
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    Not getting redundancy pay out just one month grace pay I was only there just over a year. I’ve been onto the IP today to offer my proposal other than that I give up and it’s probably bankruptcy. Been in debt since I stupidly fell for the student marketing at uni back in 2012 and I’m very tired of it now. Thanks again for the help :)
  • fatbelly
    fatbelly Posts: 20,978 Forumite
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    Keep posting  as the situation develops. I've bookmarked this one.
  • Minkym00
    Minkym00 Posts: 775 Forumite
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    A bankrupt can absolutely have a mortgage. The same way that someone with negative equity is able to keep their mortgaged house and continue making payments due to that the fact that the OR has “revested” it in them (in other words, the OR has declared no interest in it),  then the same would apply to you if your partner bought out your interest. The issue may be with your mortgage company though (there may be a clause in their Ts and Cs) so I would strongly suggest your next call is to them to discuss your situation. 
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