Bankrupt and kept your house?

Moneytalk_3

Hi

We are facing Bankruptcy - well, my husband goes to the Court tomorrow to get a meeting. Neither of us are sure what this all is really, although have trawled websites for months.. it has been rushed.

We have been told that as there is no equity in our property - it has had two remortgages on it - we aren't likely to lose it.

I am still worried sick.

Has anyone been in this situation?

Thanks

CCCS_Matthew

Hi there,

I would really suggest getting some professional advice before going ahead with bankruptcy when a property is involved, if you haven't already done so.

If there is no equity in the property in the current market, it doesn't necessarily guarantee you will be able to keep the house if the equity increases over the next 3 years. I can't really give you any advice regarding your situation via this forum without knowing more about your overall situation.

If you want some free advice regarding your situation you could call us on our helpline on 088 138 1111

Regards,
CCCS

RAS

hi

post up on the BK subforum, just look up above your thread, and you will find loads of lovely people to hold your hands.

In the mean-time, if there is no equity and the cost of paying the mortgage is the same as the cost of renting, it is quite possible for you to buy OH's Beneficial Interest for a very small fee (about £250).

But the BK folk are the real experts.

Moneytalk_3

When I say rushed into it.. I mean, it was discussed a while back but thanks to my husband not being able to get the time off work.. he has only just been able to get an appointment.

Fortunately for us, a friend of a friend is some kind of an Insolvency specialist with the CAB who went through the paperwork with my husband.

I just find it too hard to believe that they could leave us in the house.

To the Guy who mentioned about what it would cost us to rent a house - what criteria would that be?

We have 3 children under the age of three, mixed sex - I would say we need a 3 bedroom house.. but what might the Courts say?

If we were to rent a 3 bedroom house we would be looking at £700 minimum in this area - the mortgage is £800 a month.

fermi

RAS wrote: »

In the mean-time, if there is no equity and the cost of paying the mortgage is the same as the cost of renting, it is quite possible for you to buy OH's Beneficial Interest for a very small fee (about £250).

Yep. It is often possible. But as said, this really needs to be talked through with a professional advisor.

In the meantime, have a read through this link: What will happen to my Home?

Jointly owned properties only: What should be done if someone wants to buy the beneficial interest?

If an insolvency practitioner is handling your bankruptcy, then your husband, wife, partner, relative or friend should contact the insolvency practitioner for information on what to do about buying the beneficial interest.

If the official receiver is handling your bankruptcy, your husband, wife, partner, relative or friend should contact the official receiver. They may be able to take part in a property conveyancing scheme run by The Insolvency Service and a firm of solicitors.

Under this scheme, the beneficial interest can be transferred back to you, or the beneficial interest and legal title can be transferred to your husband, wife, partner, relative or friend.

Please note they will have to pay:

For a solicitor or licensed conveyancer to act for them in the transaction;

• £211 (as at August 2005) to cover the official receiver's legal costs. This amount must be paid in advance. It includes an allowance for expenses that may be incurred in the transaction. If the allowance is not fully used, they will receive a refund;
• the cost of an independent valuation unless you already have a very recent independent valuation of the property;
• the agreed purchase price for the beneficial interest based on the valuation. If your home is now worth less than the amount you still owe on it, the price of the beneficial interest will be set at £1.

They will also have to give the official receiver up-to-date details in writing of the amounts that would be needed to fully pay off the mortgage and any other charges on the property.

If your husband, wife, partner, relative or friend cannot afford the costs of the scheme at present, they may still be able to take part later. They should contact the official receiver about this.

If, later, they approach the official receiver to buy the beneficial interest, and the property has increased in value, the purchase price is likely to be more than £1.

If the home is mortgaged, the lender may have to agree to the sale - the solicitor or licensed conveyancer dealing with the transaction will be able to advise on this.