I am wondering if anyone can help me with a query I have relating to my current mortgage lender during and after BR. I've had a look at some previous posts and can't really find the answer to my question.
A bit of background - declared BR in August 2010 - No IPA/IPO after my telephone interview (not enough disposable income) and since this phone call I have had no contact from the OR's office other than a query relating to my life insurance policy. Automatic dischage will be in August 2011 (fingers crossed hopefully sooner!!) I was told my case has been sent to the RTLU or something??? - alothough they havent contacted me as yet whoever they are.
My five year fixed mortgage is due to end in July 2011, a month before my automatic discharge. Now during my mortgage pre/post BR I have never missed a payment and it is my intention to purchase the OR's interest back when i get to this stage (Property is currently in Negative Equity of around £25,000.00). I am currently fixed in at 4.89%.
1) Am I right in thinking that when my fixed period ends I will just change on to my lenders variable rate as normally would if not BR?
2) Has anyone any idea what my lender may or may not do come the end of fixed period? Can they force me to sell or anything? or can they up the rate they put me on?
3) If I changed onto the variable rate and my monthly mortgage payment was to reduce do I have to inform the OR for the sake of a few weeks? With the rates as low as they are at present my monthly payment would probably reduce alot which may mean issues with my disposable income increasing and a possible IPA/IPO?
4) I am also guessing that my lender will not offer me any kind of fixed rate etc so does this mean that I will be stuck on their variable rate for 6years until my BR drops off my credit file and I can start looking else where?
5) Is there anything that I should be preparing for now or after BR relating to my property?
The RTLU is the Insolvency Service's department which deals with assets, mainly property.
As you mentioned the house is in negative equity and you will purchase the interest back when the RTLU gets in touch (it could be worth a telephone call to find out the position). Once this has been done, the OR no longer has an interest in you property. It is extremely unlikely that your mortgage company will force you to sell especially as you have kept up all the payments. The fixed rate mortgage will come to an end and you will be transferred to a variable rate as normal. There is absolutely no reason why the interest rate should be any different to other people's although different mortgage companies will have different rules.
The only thing that you would need to watch is the decrease in your mortgage repayments during your bankruptcy period. If this leaves you with a few hundred pounds a month, you will need to declare it. The OR will decide whether you need to make any payments towards the bankruptcy. Let's hope that you are discharged first.
Mortgage during and after BR
Posted - 25 November 2010 : 18:33:01
