what happens with mortage and loans in a joint name? I want to move to new zealand, my partner has an NZ passport? how will bankruptcy effect my lease car?
bankruptcy in itself does not affect mortgages as they are secured against your property. If the mortgage payments are not made the lender will eventually repossess and sell the property. If the sale does not realise sufficient funds to pay off the mortgage and any other secured loans in full then the balance is still owed. This sum is known as a shortfall. The shortall debt becomes unsecured as the property has been sold and so there is nothing to secure this debt against. The lender will chase you for the unsecured shortfall. If one of the joint mortgagees declares bankruptcy they are no longer responsible for the shortfall. The other joint borrower then becomes liable for all of the shortfall sum (not just half).
If a loan is a joint unsecured loan then if one party declares bankruptcy the other party is liable for the full amount owed (not just half).
There is nothing to prevent you from moving to New Zealand whilst you are bankrupt but you must ensure that the Official Receiver dealing with your bankruptcy case has your contact address and phone number.
As your car is on lease it does not belong to you so it cannot be taken from you. However, it may be that the monthly lease payments may be an issue in bankruptcy depending on how high the monthly payments are and how essential the car is to you. The official receiver must agree that that quality of car is essential to your professional position.
For instance it would not be agreed that you could continue to lease a ferrari at £2K a month if you were a junior sales rep.
thats great news and great help. i wish the lease car was a ferrai!!!
Would you advice me to stop paying the morgage? As the property is rented out could I take the renters money to sort out some personal (handshake) loans? and to stump up the banckruptcy fee
Could I ask the morgage company to start repossession early?
when going bankrupt do they take my name off the morgage, loan and joint account with an overdraft?
Sorry to keep asking lots of questions but your advice is valuable.
if you intend to give up the property and it has very little or no equity then by all means stop paying the mortgage.
You can continue to receive the rental income and what you do with the funds is a moral question for you to answer. Once the property is repossessed the rental payments would go to the mortgage lender.
If you are in bankruptcy but as yet not repossessed the rental income should go to the OR.
If you are neither in bankruptcy and you have yet to be repossessed the funds go where you decide. Certainly it's a justifiable way to raise the court fees but the repayment of debts to selected creditors pre bankruptcy is preferential treatment and if this becomes known to the OR he has the power to undo the payment and claim the money from the recepient.
Your name will be removed from the deeds once the property is sold. If you are already in bankruptcy the shortfall will no longer be your responsibility but that of the joint mortgagee. You can if you wish advise the lender that you are giving up the property which may speed up the repossession process but from that point to keep the rental funds is an issue as you are doing so when you know you are insolvent and about to declare bankruptcy.
whatever happens provided there is a formal agreement in place the tenants sgould be permitted to occupy the property until said agreement has expired.
Uhfortunately John that's not the case as i heard today on the radio. Personally I would because your tenants could have their home repossesed without knowing anything about it until a couple of weeks beforehand.
As to the ex, again I would, maybe they could buy out your share?
my humble apologies, the formal rental agreement will not stand as RHB has stated.
However, if they have a 6 month AST and you have paid the mortgage to date then the property is unlikely to be repossessed before the AST expires.
You could keep the rental to fund the bankruptcy. The rental would then pass to the OR. Tenants could leave at the end of the 6 month AST (so you need to give them notice) and the property repossessed thereafter.
what happens with mortage and loans in joint name
Posted - 25 March 2009 : 03:59:10
