Bankruptcy & Property with Huge Negative Equity

NickS12

Afternoon,

I’ve made the decision that Bankruptcy is the best option for myself, I’m currently living on Credit Cards etc. due my Mortgage situation it’s interest only payments are over £900 per month with Ground Rent of over £130. I’m also paying £850 per month to service my Credit Cards on a Salary of £2350 per month!!

I currently owe £145,000 & the property is worth £80,000, with only 10yrs left on the interest only mortgage 

How would I proceed in going Bankrupt? Would I stop paying the mortgage then once property is repossessed would I then go bankrupt?

I will be moving with my partner who currently gets benefits etc. these would then stop & I would start paying majority of household bills

Everything I find online seem so so confusing? Please can someone help?

Mark_d

So you pay 900 for mortgage plus 130 for ground rent.  If you get 2350 income why do you need to live of credit cards?

How come you owe 145k on a property that's no worth 80k?  Has the value of your property fallen by like 50%?

You can find information on bankruptcy on the gov.uk website

NickS12

Property originally purchased for £124k, I got in financial trouble few years ago that lead to £21k of additional fees and charges!

other bills etc have result in debt spiralling out of control

I found information, on Gov.uk confusing 

la531983

Is your worry that if you go bankrupt and lose the house, you will be somehow made to pay the shortfall once the house is sold?

No, that not how bankruptcy works.

NickS12

My concern is I’m left with the property after bankruptcy 

fatbelly

The Official Receiver has 3 years to deal with a property.

The detail is here

https://www.gov.uk/guidance/technical-guidance-for-official-receivers/28-freehold-and-leasehold-property

ManyWays

You can stop paying and wait for the house to be repossessed then go bankrupt but this may take a lot longer that you expect. Or you can stop paying, move out and go bankrupt, the mortgage debts is still part of your bankruptcy. 
The only problem that can arise is liability for council tax, your local Citizens Advice may be able to tell you what the council does. 

NickS12

ManyWays said:

You can stop paying and wait for the house to be repossessed then go bankrupt but this may take a lot longer that you expect. Or you can stop paying, move out and go bankrupt, the mortgage debts is still part of your bankruptcy. 
The only problem that can arise is liability for council tax, your local Citizens Advice may be able to tell you what the council does. 

Hi,

I am currently thinking of moving out and going bankrupt, then move in with my partner…

fatbelly

Would it not make more sense for her to move in with you and you live 'rent-free' until the property is repossessed?

NickS12

fatbelly said:

Would it not make more sense for her to move in with you and you live 'rent-free' until the property is repossessed?

Surely, moving out & going bankrupt would be quicker than awaiting repossession 

sourcrates

You can go bankrupt in as little as 48 hrs, house repossession can take many months, then they have to sell it.

Does your partner own or rent there place?