Bankruptcy Questions

NickS12

Hi All,

I would love some non-judgmental opinions & advise :-)

I’ve got myself in a financial pickle 

I’ve got interest only mortgage, which is currently sat at £150,000 & properties it’s worth less than £100,000, with lest then 10yrs remaining on the mortgage! I got in trouble with the mortgage awhile ago and I accumulated huge additional fees, hence the negative equity issue

I am currently unable to make additional payments as I have also got £40,000 in non secure debt. All via poor money management.

only reason I’m currently surviving is my partners is buying all my food etc.

I currently looking at moving in with my partner into her Council House, then going bankrupt.

If go bankrupt will my property be repossessed/taken? That is the outcome I would like?

my partner doesn’t work and is on benefits as is carer for her child. How would the income & expenditure work?

Thank You

Keep_pedalling

There are several issues here, I will leave others to comment on your debt options, but what you are currently doing is prioritising your unsecured debt over your partner’s financial situation and your secured debt. Rather than get her to pay your living costs so you can pay your unsecured debts I would suggest you stop paying those unsecured creditors.

Moving in with her is going to impact her benefits so that needs to be taken into account as well. 

bazdvd

https://forums.moneysavingexpert.com/discussion/6554603/bankruptcy-property-with-huge-negative-equity/p1

RAS

Start with a new basic bank account (no credit check), transfer your income and essential DDs like mortgage, CT, utilities. Do not use the switching mechanism.

Stop paying non-essential debt except to your current bank, until it's all set up. Then stop paying that bank as well.

There's a lot to consider, like is your mortgage less than rent for a 1 bed property? 

Priorities are accommodation, CT, food, utilities, clothing. 

Your partner needs to spend some time exploring the consequences of you moving in. She could end up partly dependant on your finances so it may be better to wait.

NickS12

Keep_pedalling said:

There are several issues here, I will leave others to comment on your debt options, but what you are currently doing is prioritising your unsecured debt over your partner’s financial situation and your secured debt. Rather than get her to pay your living costs so you can pay your unsecured debts I would suggest you stop paying those unsecured creditors.

Moving in with her is going to impact her benefits so that needs to be taken into account as well. 

Hi,

Thank you we have discussed the impact to her benefits and both agreed long term this would be best solution

NickS12

RAS said:

Start with a new basic bank account (no credit check), transfer your income and essential DDs like mortgage, CT, utilities. Do not use the switching mechanism.

Stop paying non-essential debt except to your current bank, until it's all set up. Then stop paying that bank as well.

There's a lot to consider, like is your mortgage less than rent for a 1 bed property? 

Priorities are accommodation, CT, food, utilities, clothing. 

Your partner needs to spend some time exploring the consequences of you moving in. She could end up partly dependant on your finances so it may be better to wait.

Hi RAS,

I have recently stopped pay the non-essential debts.

We have decided that long term giving up the apartment would be best long term solution, and move in together.

The question I would like the answer to is would the apartment flat be repossessed?

RAS

You need advice as to whether to get the apartment repossessed first, which could leave you with an unsecured debt to the mortgage provider, which would be extinguished by bankruptcy.

That might not be a quick process, it rather depends whether your mortgage provider is inclined to repossess a property with negative equity. They know the answer, we don't.

Bankruptcy before repossession could be messier. The OR may not do anything unless the property gains enough equity over the years. There may be folk here who have some idea.

ManyWays

This is probably going to sound unhelpful, but my comments about bankruptcy, repossession and council tax made on your thread last year still seem accurate to me. 

You will not be saddled with the mortgage and a property in negative equity; bankruptcy will clear that debt. Your only problem is that the local council may charge you council tax until it is repossessed. 

Here you are, nearly a year later, and nothing has changed.

I suggest you take proper debt advice on this: your local Citizens Advice may know what your local council does and will be able to talk about the effect on your partners benefits; National Debtline on 0808 808 4000 if you prefer phone advice; or Shelter have good webchat https://england.shelter.org.uk/get_help

NickS12

RAS said:

You need advice as to whether to get the apartment repossessed first, which could leave you with an unsecured debt to the mortgage provider, which would be extinguished by bankruptcy.

That might not be a quick process, it rather depends whether your mortgage provider is inclined to repossess a property with negative equity. They know the answer, we don't.

Bankruptcy before repossession could be messier. The OR may not do anything unless the property gains enough equity over the years. There may be folk here who have some idea.

Hi,

thank you, who would be best people to advise CAB or Step change or someone else?

RAS

@Minkym00 might have some thoughts. If you speak to CAB, ask for some specialising in repossessions.

But you'd really need to find out how your own mortgage provider approaches repossession in these situations. 

ManyWays

I doubt any debt adviser will be able to help with saying what your mortgage lender is likely to do. These cases are unusual and very individual. No advice agency would keep records about what X lender tends to do, and they could soon be out of date anyway.

Bankruptcy before repossession is not messy for the mortgage debt, only potentially for council tax.