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| T O P I C R E V I E W |
| CallMeAndy |
Posted - 02 March 2009 : 22:05:48
Some more questions folks!
My wife and I are possibly to both file for bankruptcy. She is ready to file now to avoid the bailiffs knocking. But I can probably survive 3 to 4 months as things stand at the present. The property is in negative equity, is it correct that the BI can only go to a party not involved with the bankruptcy?
We are currently only 1 month in arrears with the JOINT mortgage but both of us are now unemployed and so we have to assume for now (considering the climate) that there will be no further payments until the arrears become unacceptable to Northern Rock. Obviously there will come a point where we have to hand the keys back, but if she files now "how will it effect"/"what will be" the likely timing?
A possible additional complication is that there is a JOINT unsecured loan that was arranged in connection with the mortgage on the same repayment terms. The timing is important because unless I can get a job or start generating enough income to cover the mortgage payments quickly enough we need to save money in order to rent somewhere to live. I fear this is going to be difficult if not impossible once she has become bankrupt.
The timing is also important because I am considering starting a business which I hope will at least generate enough income before my time is up to cover the mortgage (hopefully the result will be better than this by then), but even if it means I have to still go bankrupt we might be lucky enough to hang on to the house. Its a question of rent now; or shoot for hanging onto the mortgage and the property further down the line with the risk that if things go wrong we might not be able to rent down the line due to my wife already being bankrupt.
So another question then about the BI in the property, if it needs to be sold to another party such as a relation, my choice is really only my mother and she is retired without any serious income, certainly not enough to pay the mortgage (obviously in reality I will still pay assuming that I have the income) but is this going to be acceptable to Northern Rock and if so what will be the contractual relationship between Northern Rock, myself and my Mother?
In short will this scenario give my wife and I the right to continue to reside in the property?
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| 2 L A T E S T R E P L I E S (Newest First) |
| jayne1970 |
Posted - 03 March 2009 : 13:45:33
Hi
We are in similar situation, and I also thought a thid paty had to buy BI, that's great news, So as long as we can raise funds, we need not involve anyone else?
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| John |
Posted - 03 March 2009 : 08:18:04
Hi
Re BI
no, your BI can be purchased by your wife and vice versa even if you are both bankrupt at the time.
As your property is in negative equity and you plan to hand back the keys your bankruptcy timing has little effect. The property repossession schedule will be determined by the lender on the basis of non payment of the mortgage. If you intend to apply for local authority housing you should not hand the keys back but wait for repossession and finally eviction. This is likely to take upwards of 6 months. If renting privately it's best to do so before bankruptcy as you will find it more difficult to pass any credit check. This could mean a guarantor is required or 6 months rent in advance or both.
The insecured part of your borrowing with Northern Rock will be included in your bankruptcy as will any shortfall on the mortgage if the eventual sale price falls short of the mortgage sum.
The decision on whether or not you should take the risk in respect of your planned business venture is one that only you can decide upon.
A above, your mother need not become involved in the BI. But if you should decide that a 3rd party buys some of the BI that person is not liable for any mortgage payments. The legal liability for the mortgage will remain with you and your wife, a 3rd party buys the benefit, not the liability.
John White
England Jackman & Spacey |
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