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cr_w
Starting Member
1 Posts |
 Posted - 09 February 2009 : 22:58:59
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| My morgage is 205.000 and my property is now worth about 140,000 I am fixed at nearly 7% - £1200 per month interest only for another 3 years, I have no real assets should I go bankrupt to offload this negative equity? I may also be made redundant in a few mths time, even if I dont lose my job can i declare myself bankrupt? My fiancee and i have a joint morgage and earn @25K each |
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John
New Member
United Kingdom
73 Posts |
Posted - 10 February 2009 : 01:27:20
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Hi
if you have no unsecured debts then you cannot petition for bankruptcy.
Secured debts are unaffected in bankruptcy.
For the shortfall (current level of negative equity) to become unsecured you would first need to default on the mortgage repayments. This requires that you cease making the repayments for a period of at least 3 months, the actual length it takes for your lender to commence repossession proceedings is a matter of the lenders internal policy. If you did not defend the repossession application in court then an eviction order would eventually be granted and you would need to find alternative accommodation.
Once the lender has sold the property then the shortfall becomes a known figure and an unsecured debt for which both you and your fiance are jointly and severally liable. To write off that shortfall in bankruptcy you will both need to petition the court individually.
Assuming you are by now in rented accommodation and taking into account the £50K annual income all this may not be your best move.
When petitioning for bankruptcy you will both have to submit an income and expenditure report to the Official Receiver. The expenditures you claim must be no more than that which is deemed sufficient to meet the basic reasonable needs of the members of your household.With your joint incomes as they are, you will no doubt have disposable income after the expenditure allowances which means you will be required to pay a monthly sum to the benefit of your creditors (Income Payment Agrement) for a period of 3 years.
The same period, coincidentally, of your fixed interest rate.
On that basis you need to consider the following:-
If you are not made redundant and have no personal debt there is little logic in petitioning.
Swapping a high mortgage payment for an IPA for a 3 year period. You'd be better served making the fixed mortgage payments for that period and review your position then.
If you do have personal debt that will of course affect the balance of the circumstances on which you must base your decision.
If you are made redundant that may well force your hand.
Try to gain as much information as you can on the subject of bankruptcy and take advice on how your personal circumstances relate to the legislation.
It would not appear from the few details in your post that there is a need for speed, please take your time.Bankruptcy does not suit everyone's circumstances and it's very important not to rush things.
timendi causa est nescire
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Edited by - John on 10 February 2009 01:40:17 |
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RHB
Senior Member
1159 Posts |
Posted - 10 February 2009 : 06:59:07
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| That mortgage should be affordable if you have no other debts, whether or not it iis in negatve equity right now doesn't affect things, unless you are wanting to move. |
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movin on
Average Member
United Kingdom
946 Posts |
Posted - 10 February 2009 : 09:42:46
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Im not sure, but i think the poster is looking for answers 'just in case' - I think £1200 is alot for an interest only mortgage at that rate, especially when you take into account all other household expenditure that comes with owning a property.
Please could you advise if you have any other unsecures borrowings so we can advise further.
Hindsight is a wonderful thing
Jenny
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My morgage is 205.000
