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cdj
Starting Member
6 Posts |
 Posted - 05 April 2009 : 17:29:05
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| what happens to a secured loan if you go bankrupt. my house is in negative equity in my iva as the mortgage plus the loan is more than myhouse is worth. |
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 05 April 2009 : 17:46:11
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Firstly welcome to the forum
When you go BR you include any shortfall from the loans secured on property after the mortgage and other secured loans are paid by the money raised by selling the house.
What is left becomes unsecured and is covered under BR
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
Life's too short!!! |
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cdj
Starting Member
6 Posts |
Posted - 05 April 2009 : 17:49:12
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so is there no chance of keeping my house then if i go bankrupt?
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 05 April 2009 : 17:55:46
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Sorry if you want to keep the house then the OR will offer you the Beneficial Interest in the property for £1 plus costs.
If you can afford the mortgage or secured loan payments then you buy the BI.
If you can't afford it or don't want to stay then you hand the keys back and it gets repossessed and the balance of debt becomes unsecured and covered by BR.
If at first you want to stay but are not sure if you can afford it i think you can still have any shortfall covered if it is done before you are discharged, i think you have to list the potential shortfall on your BR forms
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
Life's too short!!! |
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cdj
Starting Member
6 Posts |
Posted - 05 April 2009 : 18:09:20
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sorry to be a pain but will i be allowed the loan payment in my payment order like with my iva payment?
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 05 April 2009 : 18:19:35
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yes AFAIK if you decide to buy the BI the mortgage payments are nornally acceptable to the OR much the same as rent would be
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
Life's too short!!! |
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cdj
Starting Member
6 Posts |
Posted - 05 April 2009 : 18:24:09
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i mean the payment on the secured loan
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Sunshine_Girl
New Member
77 Posts |
Posted - 05 April 2009 : 18:26:39
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I found this on the Insolvency Service’s official website, at
http://www.insolvency.gov.uk/faq/faq.htm#16 :
“A debt which is secured by a mortgage or a charge on a property is still a provable bankruptcy debt. The mortgage loan company is "a secured creditor" which means they have rights over an asset, the house, and can require the asset to be sold to pay their debt. These rights are not affected by the bankruptcy.
On the making of a bankruptcy order the mortgage loan company could make a claim in the proceedings but, unless it wished to give up the security, could only claim for any (estimated) shortfall.
If you continue to live in the property it is likely that you will continue to make payments to the mortgage loan company to avoid the property being re-possessed. When the property is eventually sold any shortfall to the mortgage loan company is still a provable debt in the bankruptcy, even if you have been discharged, as you are released from the debt on discharge.
Your bankruptcy does not affect the obligations of any joint owner who has not been made bankrupt to repay the mortgage loan debt or any shortfall, as they are still liable for the whole of the debt.
After the date of the bankruptcy order the mortgage loan creditor may ask you to sign a "deed of acknowledgment" of the outstanding debt. If you have signed such a deed the mortgage loan creditor can take action against you to recover any shortfall following the sale of the property.”
SG |
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markm
Junior Member
United Kingdom
115 Posts |
Posted - 05 April 2009 : 19:23:38
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Hi All...
Im no expert... but on my nolidge on BR... Sunshine girl... is right on wot she says...
my regards lil shaza... |
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John
New Member
United Kingdom
73 Posts |
Posted - 05 April 2009 : 19:48:08
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Hi
if your home is in negative equity and you can afford the mortgage payments and all other loan repayments secured against it then you will very likely keep it.
None of the secured lenders will care as long as you keep up the repayments.
The OR will not claim the property unless there is equity although you, or a nominee of your choice, will have to buy back your BI for a nominal sum.
John White
England Jackman & Spacey |
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Topic |
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what happens to a secured loan if you go bankrupt.
