Negative equity Bankruptcy and Secured Loans any advice

[joolzh13]

Reading different forums and threads it appears that if you're in negative equity you may not lose your house in bankruptcy, is this true?

 

I have a dependent child on disabilility allowance but is 18 years old. The mortgage is the same amount per month as what a house would cost me to privately rent.

 

Question 1 - What is negative equity? My lender says I am a 90% LTV customer but I know houses like mine are selling for £10k less than I owe.

 

Question 2 - the secured loan - there would definitely not be any money towards the secured debt if the house was forced to sale. Therefore this debt would become unsecured. If i went bankrupt but kept the house can the secured loan become part of my bankruptcy?

 

Any help would be appreciated.

 

Thank you

[sequenci]

Reading different forums and threads it appears that if you're in negative equity you may not lose your house in bankruptcy, is this true?

 

Very true. if there is no value in the house it would be of little use to the creditors. You should be able to transfer any 'beneficial interest' in your share of the equity to someone else. All is explained here:

 

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/home.pdf

 

Question 1 - What is negative equity? My lender says I am a 90% LTV customer but I know houses like mine are selling for £10k less than I owe.

If you owe more than the value of the house = Negative equity is the amount you are short by.

If i went bankrupt but kept the house can the secured loan become part of my bankruptcy?

nope. It will remain secured to the property.

The only time it would be involved in the bankruptcy is if you give your house up.