Tonycee Thank you, a lot of information there. Debtinfo Thank you, I already had the underlying feeling that the offered c£5K might be as good as I might get ... Clearly the second house is the only asset of any worth that could change anything, but only if the mortgage-lender doesn't take priority in an OR forced-sale. I didn't know how this asset would be treated in a bankruptcy before repossession by the mortgage-lender. I didn't know whether the mortgage lender would have the same status as if they had already repossessed the house, and would be first-paid. My thinking was really very simple ... if the mortgage-lender does get first-paid once the house is sold by the OR to repay others then there won't be anything left anyway so there's no point bothering, whereas if the mortgage holder in bankruptcy is regarded by the OR as just one debtor among others including me, then the proceeds of the sale would be split proportionally and there could potentailly be a larger benefit for me than the c£5K I have been offered from the sale of the primary residence. Wishful thinking as it turns out, but thank you for resolving the question, it is appreciated.

I am owed just over £72K, and find myself in the position of having to be *the bad guy* and enforce bankruptcy on someone. I suspect I need to act very quickly as will be seen. Outside of his primary residence he has a second house that was originally bought as an investment. He has no other assets beyond car and personal possessions. He is not a villain, just a genuinely nice guy in an impossible situation which is why I feel in part like a villain myself! He has been open with me. He is in poor shape and has a plan he is now acting upon, and has *confessed* that at best he can only offer me around £5-6K if and when his house sells, which he is now resigned to doing. I can’t afford to write off all of the rest however, I’m not in too good shape myself ... So then ... I am completely unfamiliar with bankruptcy formalities and would very greatly welcome the comments of someone expert in this field in order to help me clarify two things in particular in order to decide on my best course of action. This isn’t helped by the fact that I suspect I also have to move quickly now as the following makes clear: 1 His primary residence is valued at £325K, he doesn’t think he can automatically expect to get that in the present market and will be asking for offers over £295K and keeping his fingers crossed. He has remortgaged and added top-up loans a time or two and needs to make £280K to clear all of that. He has also borrowed from family to keep a past Sole Proprietor business afloat which he has recently had to abandon, hence his bad state now. He advises me that if the house sells reasonably close to value, after clearing the mortgage and repaying the family borrowings he would expect to have something in the order of around £5K+ which would come straight to me. After that he doesn’t expect to be able to do anything more. 2 His other property, currently vacant and bought ten years or so ago in a good spell, was mortgaged four years ago to start the business that has now collapsed. Today this house is in small negative equity with a value fallen to £340K but mortgaged for £350K. There is therefore a borderline possibility that he could break-even with a good sale and walk away with no real damage. However, he can’t afford to keep the mortgage up and is about to stop paying, so soon his lender will take notice. He’s putting that house on the market too and hoping for a quick sale simply to make the best of a bad situation, hoping to avoid repossession and a forced-sale that will leave him with a shortfall debt still back to his mortgage lender. I have two options therefore: 1) be the good guy, let him try and get the best result he can and accept £5-6K perhaps in due course and write-off £60K+, or 2) be the bad guy. I just can’t afford to settle for such a big loss however, I have commitments and more just like everyone else, so have to look at other steps. So firstly, I feel I need to participate in the sharing-out of any profit that might hopefully come from the sale of his primary residence, not just be paid an amount once he’s settled up with Mum/Dad/whoever. This may be very little improvement on-balance, but can’t be ignored really. Secondly, and the most important in deciding if it might be worth taking formal steps at all, I feel I should be able to have an entitlement from the sale of the second property whenever it sells, not just let it sell and repay some/all of the mortgage. However, I’m not sure how this second house would be treated. The lender will have an interest in it as security for the mortgage, so will that take priority anyway and be settled over anything else? If so, then there would not be any money over for me to be repaid anything more anyway and it would be pointless wasting time and effort. So I really have just one or two questions to ask that I am sure are very basic. If someone could guide me I should be very grateful. Firstly, would the second house be treated the way that I describe with a primary settlement back to the lender ahead of anybody else, and therefore provide no real expectation of benefit to me anyway? Secondly, I am drawn toward enforcing bankruptcy not taking him to court. I have no experience of either process but in my simple view I am in the main *only* seeking to participate in the proceeds of the 2nd house sale and receive a fair and proportionate slice of that cake rather than having a Bank wolf the lot. I also expect that looking for a court ruling/judgement wouldn’t necessarily give me a much better return anyway, would take time and probably some cost to deal with properly, and in any case might be rendered sterile if after the event he either goes bankrupt himself anyway or someone else takes that step for him just the same. Am I missing anything glaringly obvious? I’d be satisfied with a fair apportionment under bankruptcy, would prefer that to a drawn-out situation and all the baggage that I expect goes with it. There may well be more, however I clearly need to clear up my thinking on some absolute basics. Also, if I am to take any formal actions I need to do so pretty well right away, after the weekend I think, in order to be sure of stabilising things before some part or other changes. I am going to be Googling a great deal in the next 36 hours I am sure, though from what I have found this morning there is plenty of valuable street-level advice and guidance for those on the receiving-end of bankruptcy but almost none for someone in my position as a very reluctant bad-guy! Any input at all would be massively welcomed, thanks! H