If I sold my house during the year of Bankruptcy would the negative equity be covered by the BR or would it be a debt payable by myself. At the moment I am hoping to keep the house with my Mum buying the BI.
G x
There is light at the end of the tunnel, I can actually see it !!!!
question is would your mortgage lender allow the sale if the proceeds do not redeem the mortgage.
If you have not indicated to the OR verbally or through the SoA that you intend to sell or give up the property, and you are still making the mortgage repayments then it may well be that the shortfall if you should decide later to sell would not be included. I thinkthat if you are still a bankrupt at the time you sell or give up the property then the shortfall should indeed be included but it just might not be that straightforward depending on the OR's and the mortgage lender's viewpoint.
If you think about it why would you incur cost to sell a property for less than it's mortgage value whilst you are a bankrupt anyway? Where would you find the solicitor's and estate agent fees? It's cheaper to hand the property back.
You really need to decide before what you would like to do with the property - keep it or hand it back.
My understanding is that if you have not bought the Beneficial Interest - i.e. is still sits with the Official Receiver - then the negative equity / shortfall would rest in the bankruptcy estate.
However if you go br and then decide to hand the house back you will need a considerably larger deposit to rent a house.
This can be up to 6 months rent in advance.
Take your time but think carefully about the house and get your ducks in a row before you petition. You have much fewer choices afterwards.
Thanks for your replies. I think we will stay in the house with Mum buying the BI. Next Feb (2010) when my discharge is due my mortgage reverts to the base rate so hopefully the payments will reduce and because the 12 mths of BR are finished the extra money would not be taken from me in a IPA. Am I right in what I am thinking?
G x
There is light at the end of the tunnel, I can actually see it !!!!
Would negative equity be included in BR?
Posted - 29 March 2009 : 10:42:17
