Hi, went to court last week and declared myself bankrupt. My home is jointly owned with my husband who was not involved in the bankruptcy. We are hoping that he will be able to buy out my equity so that we will not lose our home but what I'm worried about is that we have a part endowment. part repayment mortgage and the surrender value of the endowments is around £13000. Will the OR take these endowments?? Also the letter states to get some independant advice, who is the best person to ask for that would it be the citizens advice bureau or do you have to get a solicitor?
Thanks for the reply Julian. The orignial mortgage we got was an endowment mortgage and then when we moved we increased our mortgage and the bank advised us to take the rest on repayment so half is repayment and the other half endowment. The endowment when matured in 10 years time will then be used to pay off the endowment part. I was worried that if the OR makes us surrender the policy then in 10 years there is no funds ?? Also the endowment is in joint names and it is only myself who is bankrupt.
That answer is not strictly correct. The Trustee will only be able to encash jointly held endowment policies with the agreement of your husband. If he fails to agree, the Trustee will have to register an interest in the policies and wait until they mature to get their money.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com
If you follow the link below this will take you to the insolvency service's guide to Bankruptcy pages 11 & 12 explain about Life Assurance policies including Endowments.
“If the life assurance policy has been legally charged to any person for instance" an endowment policy used as security for the mortgage on your home, the rights of the secured creditor will not be affected by the making of the bankruptcy order. But any remaining value in the policy may belong to your trustee.
If the Mortgage company set up the endowment part of the mortgage as security for their funds loaned via the mortgage then it is unlikely there will be any remaining value.
However Melanie is correct in the sense that the trustee will not be able to cash in the policy should your husband not agree and therefore could register a charge over your half until maturity, but this would be in a case whereby the endowment was not security for the mortgage.
mortgage endowment policies
Posted - 02 May 2008 : 22:01:46
