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bellejane
Junior Member
United Kingdom
179 Posts |
 Posted - 15 August 2008 : 10:12:38
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I am very confused. I go BR on Wed due to debts built up by ex-partner on my credit cards while he was abroad (£30k). He never returned. We have a 2 yr old child (he was 6mths when he left). I own a property that I initially put a £10k deposit down on leaving an outstanding mortgage of £76k. After panicking, I consolidated the credit card debts (3) on a secured loan £39k (£9k debts where shared debts in UK). I now realise I was given bad advice - I should have gone to CAB and not consolidated the debt, thereby securing the debt on the house. I work full-time and after personally paying nearly £7.5k off this debt over 2 years, the settlement figure is £39.1k!). The house is worth £95-£100k max leaving a shortfall of £20-£25k. I think now BR is the only way out of this mess to be able to afford to raise my child in a more financially stable environment. My ex-partner has left the country so I can't legally get anything from him.
My confusion is, what does it mean to keep interest in the house? Won't they need to sell my house to take the profit of £25k out of it to pay some of the secured loan? Am I missing something? If I keep the house won't I still be in the same situation of trying to find the mortgage money of £330 and secured loan payment £360 each month? Wouldn't it be better to hand back the keys and leave the debt behind? Please help an overworked, tired and confused person to understand this jargon. Maybe I'm missing something. Many thanks, Belle |
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John
New Member
United Kingdom
73 Posts |
Posted - 15 August 2008 : 13:13:56
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Hi
If your house is in negative equity then the OR would not force a sale as he would not realise any surplus funds to pass back to your creditors.
In this case the OR would offer your beneficial interest in the property, which becomes his when you go BR, back to you for £1 + £211 fees.
At that point your house is exempt from any further proceedings in the BR.
However, if you are unable to pay the mortgage, and any other loan secured on it, the lender(s) will eventually repossess.
If you allow repossession at the time of your BR then any shortfall from the eventual sale of the property against what you owed, will be written off in BR.
If you go BR and buy back your beneficial interest and at a later date default on your mortgage and get repossessed then, when the shortfall is known you are liable for that amount. This could, therefore, result in you being declared BR for a 2nd time.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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bellejane
Junior Member
United Kingdom
179 Posts |
Posted - 15 August 2008 : 13:44:26
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Many thanks John.
It is hard enough to go through bankruptcy once. Thanks for helping me avoid a possible problem later on down the line.
I will indeed hand over the interest in the house at time of bankruptcy. It is only a house. I will build a new home for my child without debt or the worry of debt hanging over me (or debt collectors calling all hours and causing further stress). It may be rented accommodation but it will be our home with nothing secured against it.
To everyone out there considering bankruptcy, good luck. I hope it brings you a more secure and stable future. No one deserves the harrassment of debt collectors at their door or on their phones (the ones with the fake smiles who were willing to push credit on you in the first place and give you bad advice re raising your credit limits and consolidating your loans and the ones unwilling to help you when your cards are fraudulently used (being a 2nd user shouldn't protect you from liability). Anyway, onwards and upwards. No looking backwards. Time to move forwards again.
Thanks again, belle x |
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Confused re interest in house
