I was declared bankrupt in September 2010. My home has negative equity of £40k and therefore is of no interest to the OR. The mortgage is not in arrears. My lender has indicated no problem with my continued occupancy. I have every intention of trying to eventually pay off the mortgage. I will be discharged in September 2011. My question is - if in say 3 or 4 or even 5 years time it becomes obvious I am flogging a dead horse and the property is never going to get back in positive equity and I, at that future point, had been unable to pay off any amount of any relevance to bring the debt down and reduce the negative equity and I either, a)allow my home to be repossessed or b)voluntarily surrendered the keys back - is the shortfall covered by the bankruptcy that long after discharge? I understand there are 'risks' of liability outside of bankruptcy if I signed a deed of agreement (which I have not and would not do) or I bought the beneficial interest - which I have not done either as there, is none! I thought that as any shortfall would be a provable debt (regardless of any time that had lapsed) and would therefore be covered by the bankruptcy. This is my understanding by researching the internet. However when I asked the person looking after my file at the OR office - I received a reply saying I would be liable for any shortfall once discharged if I had the property repossessed or handed the keys back? I am confused which is the right answer now? Thank you in advance - yours with gratitude.
You are right the debt falls into the bankruptcy no matter how long it takes to crystalise because the agreement was signed before the bankruptcy order. So as long as you dont alter the agreement in any way (for instance by remortgaging) then that will remain the case forever
I am confused Which is the right answer ?
Posted - 09 March 2011 : 20:12:15
