Confused about Bankrupcy

[surrey_36]

Hello - I am a home owner, albeit a tiny one - tiny one being me and the house :o)

I am confused i just read a post where someone said they went bankrupt but kept their mortgage.

The only reason i am not going bankrupt becuase i dont want to lose my house.

Is it possible for me to go bankrupt and keep my property?

My house is worth (i think approx.) £175k, I owe £155k.

I have 2 secured loans on it totalling about £25k

I have around 20K of non secured debt (2 x loans, 2 x credit cards)

Is bankrupcy something i can do and keep my house?

thank you for any advice ..

much apreciated

[debtinfo]

the answer is a little complicated

 

Basically when you go bankrupt the OR has 3 years to deal with the property. Now if it is in negative equity the OR wont do anything with it at the moment, they will simply wait. If by 2 years 3 months it still has no equity then they will start the process of giving you it back with no fees. If it does have equity by this point then they will ask you to buy them out. If you cant do that then if it is a small amount of equity then they may simply put a charge on the house and give it back to you if it has a lot of equity then they may consider selling the property

[surrey_36]

thank you very much for your reply. I always thought that if i went bankrupt then i would lose the house instantly and any profit that was made on the sale would firstly go to the costs of the solicitors and then be shared between the loan comapnies with the second charge, so this is interesting i did not realise it worked like this. Sorry if this sounds stupid but what exactly does OR mean? Do you think that the OR would consider 20K a small equity?

So really its touch and go whether you would keep your house or not that would be the risk i would take, whether 3 years down the line they decided to take it or not?

thank you again...

[Happyhippy1959]

I don't think the OR would consider 20k equity very small. He or she would want that to help pay your creditors off. When they say small they mean small,,, I have read somewhere they usually don't want to mess with assets less that 1k,,, so I think Surrey your on a loser there. When you say secured loans on the house I take it you have counted that money into the property's worth.?????? ie. Sell house pay mortgage and Secured loans you are still left with £20,000. !!!

 

Could you not raise the £20,000 somewhere, it does seem that BR may not be your option here because you have an asset that would pay off the debt.

[Dodgy Geezer]

I always thought that if i went bankrupt then i would lose the house instantly and any profit that was made on the sale would firstly go to the costs of the solicitors and then be shared between the loan comapnies with the second charge, so this is interesting i did not realise it worked like this. Sorry if this sounds stupid but what exactly does OR mean? Do you think that the OR would consider 20K a small equity?

So really its touch and go whether you would keep your house or not that would be the risk i would take, whether 3 years down the line they decided to take it or not?

thank you again...

 

Technically, with two secured loans of £25k + a mortgagae of £155k you dont have ANY equity.

 

Why do you want to go Bankrupt ?. This will not erase secured loans.

 

OR means Official Receiver ( The Insolvency Service )

 

WEBSITE >>>>>HERE

[surrey_36]

Technically, with two secured loans of £25k + a mortgagae of £155k you dont have ANY equity.

 

Why do you want to go Bankrupt ?. This will not erase secured loans.

 

OR means Official Receiver ( The Insolvency Service )

 

 

thanks for all your replies and helpful info. The reason i am considering bankrupcy is becuase im struggling to meet my payment arrangements and now making arrangements on arrangements. I had a good job within our family biz of 20 years that paid me enough to more than meet my outgoings but since our biz went down the pan around 18 months ago i have been struggling ever since and sometimes it feels as though things are not getting any better. I realise that if i sold the property that the any equity would go to the secured lenders, and im not just trying to wipe them - i cant afford them due to the huge change in my income. I appreciate your info, at least i know now that if i go bankrupt i am still have to repay these secured loans. Please can i stress that i am not trying to run away from responsibilities i took out and loans I have taken out - i cant afford repayments this is the problem. God that means i have NO options!

[surrey_36]

Is this definately right - Bankrupcy wont wipe secured loans - that doesnt seem to be what is said about bankrupcy - its seems to say that all debt is cleared

[Dodgy Geezer]

Sorry if i misled you. Of course your secured debts are included in your bankruptcy. What i meant was, just because you have gone bankrupt, that doesn't immediately release you from the debt. Your debts will be administered by the insolvency service until such a time as they see fit. This could be up to 3 years.

 

Have you tried re negotiating repayments with your creditors? They wont want you to go bankrupt.

 

I have a friend whos mortgage went from £800 ish PCM to £350 ish PCM because his work had taken a nosedive.

[surrey_36]

Hi dodgygeezer - oh i understgand what you mean - yes that makes sense, I dont think BR is a road im going to go down..

the 2 companies that i have the secured loans with - I have mentioend to them before about a lower settlement figure and they said in a roundabout way that they would just go for my house. In other words the full debt is repayable in full otherwise they will go for repossension or whatever it is they do to get their money back.

 

I have often thought that surely they would prefer to negotiate a figure that i can afford to repay rather than me go bankrupt and they get very little?

 

with my mortgage i am on an arrangement, i pay an extra £100 a month ontop of my normal monthly payment until the arrears are clear. How did your friend go about getting it reduced so much?

 

thanks for your help :o)

[Dodgy Geezer]

You have to speak to them. Make them understand that you are at your wits end, and one very, very, small step away from bankruptcy.

They have a wealth of experience. Some will help unquestionably, some will rip the carpet from under your feet.

 

My friend went from capital repayment to interest only for an ongoing period. He keeps in constant contact, and is trying, but things just aren't getting any better.

 

On a personal level. I negotiated a 12 month repayment break with my mortgage co, and the money is put on to the end of the contract. You still have to pay it, and interest, but it gives you a bit of breathing space. I also re negotiated a reduced £350 PCM to £150 PCM with welcome finance, on my secured loan. As things happened, it wasn't enough, and i was made bankrupt anyway, but that's because the Inland Revenue got to the end of their push button procedure, and wouldn't listen on a human level. Serves them right, they ended up with nothing. So did i. I dont want you to make the decision without knowing the consequences.

[bake]

just reading this , ex bankrupt, i was made bankrupt 206 all deps secured or not are included in bankrupcy i kept my house in 209 i made a consent agrrement with the trustee to buy my intrest back it was hard and risky , considering the markets over the last years they are in no big hurry to sell , considering its the trustee that make monies out o this skam, my advice is make sure you vet were you get advice take and get your house re valued as may find at present it will be at lot less than you think , one thing you seid you have sacured loans are they in joint names if so you cant treat them as joint and several, so you could not include in bankrupcy , but if not and you think could do a deal with the trustee and this could take years it did with me it depends on how determind you are to keep your house but it can be done i did

[Dodgy Geezer]

Thank you for that bake.

 

Yes it can be done if you are determined enough. I stayed in my house for 23 months after my BR. I was offered to buy out my interest for £1 but chose to walk away. I have no regrets yet, but would encourage anybody who wants to keep their house to at least try.

[surrey_36]

thank you Dodgy Geezer and Bake for your help and advice