Ask a StepChange debt advisor a bankruptcy question

Joyful

I hope Stepchange are still here. My disabled daughter was made bankrupt a few years ago. They receiver asked for £500 to declare no interest in her home. She did not have this. They have now contacted her to say after a visit that there is £8000 equity on the house and they want to sell it if she cannot give the money to them. As her husband was previously in the army they contacted poppy Scotland who put them in touch with the Army CAB, They have still not been offered any resolution and the solicitor is about to put the house on the market. Can you offer any advice please?

fatbelly

Joyful said:

I hope Stepchange are still here. My disabled daughter was made bankrupt a few years ago. They receiver asked for £500 to declare no interest in her home. She did not have this. They have now contacted her to say after a visit that there is £8000 equity on the house and they want to sell it if she cannot give the money to them. As her husband was previously in the army they contacted poppy Scotland who put them in touch with the Army CAB, They have still not been offered any resolution and the solicitor is about to put the house on the market. Can you offer any advice please?

Stepchange are still here but they work Mon - Fri.

Can you give a more exact date of the bankruptcy? Month and year would be enough.

Joyful

It was more than 5 years. They are emailing the solicitor to get the date.

StepChange_Patience

Joyful said:

I hope Stepchange are still here. My disabled daughter was made bankrupt a few years ago. They receiver asked for £500 to declare no interest in her home. She did not have this. They have now contacted her to say after a visit that there is £8000 equity on the house and they want to sell it if she cannot give the money to them. As her husband was previously in the army they contacted poppy Scotland who put them in touch with the Army CAB, They have still not been offered any resolution and the solicitor is about to put the house on the market. Can you offer any advice please?

Hi there

Thank you for getting in touch and sharing your daughters situation, I'm sorry to hear about what is happening. When Bankruptcy is applied for in England, Wales and Northern Ireland the Official Receiver has three years in which to check if there is equity in the property and make a decision.

The Official Receivers options for dealing with the property are:

• Sell the client’s beneficial interest to a joint owner or third party for its approximate market value
• Apply to the court for an order for sale
• Offer the case to an insolvency practitioner (IP) to oversee the sale of the property, if there is more than £10,000 worth of equity
• Place a charging order on the property for the value of your daughters interest in it at that point

The process in Scotland would be different, the trustee would have four years to decide what to do with the property.

I think it would be worth your daughter seeking legal advice. 

I hope this helps. 

Patience

Elithelittleblackdog

Hi there. I left the UK to get married, over ten years ago. I was previously badly advised in buying a property in UK, and the market was terrible. I just couldn't sell this property. So I cleaned it, then handed over the keys to the building society. Please do not judge me, I have ALWAYS paid my way in life, ALWAYS. My question is, if I came back to live in UK, how would I stand debt-wise? I have worked since I was 15, now 67 and retired. Thanks.

StepChange_Aidan

Elithelittleblackdog said:

Hi there. I left the UK to get married, over ten years ago. I was previously badly advised in buying a property in UK, and the market was terrible. I just couldn't sell this property. So I cleaned it, then handed over the keys to the building society. Please do not judge me, I have ALWAYS paid my way in life, ALWAYS. My question is, if I came back to live in UK, how would I stand debt-wise? I have worked since I was 15, now 67 and retired. Thanks.

Hi,

Thanks for posting and welcome to the forum. Please be assured that we’re here to help, not to judge you.

If the proceeds from the sale of property were not enough to cover the outstanding mortgage balance, there could be a shortfall to repay to the lender. Whether this debt is still enforceable will depend on if and when the lender has taken any court action.

Mortgage shortfalls have a limitation period of 12 years for the capital and 6 years for the interest from the date you handed the keys back (although FCA guidelines state that the lender must notify you within six years if they intend to pursue the debt).

If you haven’t made any payments towards the debt, acknowledged it in writing and the lender hasn’t taken court action within this time frame, it would be statute barred which means it’s effectively written off.

There's some more information about statute barred debt here.

In any case, even if there is an outstanding debt that's still enforceable, you’ll be able to come to an arrangement to repay it in affordable instalments or include in a debt solution.

I’d recommend contacting a debt advice agency in the country you live in to get further guidance, but if you do return to the UK, StepChange will be able to support you.

Kind regards,

Aidan

pevonia

Can you explain the difference in walking away from my and going bankrupt . 

Thanks

pevonia

I am in uk 

StepChange_Patience

pevonia said:

Can you explain the difference in walking away from my and going bankrupt . 

Thanks

Hi there

Thanks for getting in touch. 

I apologise if I've misunderstood your question, if you're wondering what the difference is between walking away from your debts and going bankrupt are, then I'll gladly help. If this isn't correct please come back to us.

The main difference would be the action your creditors can take, if you walk away from the debts (I would always recommend seeking advice if you're struggling) there is a risk your creditors can take further action to recover the debt. You can find out more information about this here.

If you go bankrupt, you're protected from any further action from your creditors, contact and interest or charges. It does cost to go bankrupt and as it's a form of insolvency there is a formal process to go through. You can find out more information about bankruptcy here. 

If you haven't done so already, I'd recommend seeking impartial debt advice. When you're ready, you can get in touch with StepChange who will gladly have a look at your situation. You can find how to contact us here. 

I hope this helps.

Patience

pevonia

Thank you so much for your advice.