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 bankruptcy postbag for august
 Bankruptcy, Negative Equity & Repossession
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New Member

77 Posts

Posted - 23 September 2008 :  05:31:24  Show Profile  Reply with Quote

I've just filed for bankruptcy and wanted to double-check something the OR told me, as what few snippets I've found on the Web seem to contradict each other.

I'm a homeowner but in negative equity due to a large secured debt. He says that, because of the negative equity, I won't lose my home and the secured debts won't count as part of the bankruptcy. Meanwhile, both my mortgage company and secured creditor agree on that. However, he says that, in theory, I could stop paying my mortgage and secured loan repayments until those two companies repossess my home and the debts to them would then be incorporated into the bankruptcy.

I'm not after advice on which way to go - believe me, I've spent many a restless hour listing the major pros and cons on both sides and wouldn't necessarily go down the repossession route - but I just wanted to check the facts (and also any time limits involved).

Many thanks


Junior Member

United Kingdom
325 Posts

Posted - 23 September 2008 :  11:55:29  Show Profile  Visit JulianDonnelly's Homepage  Reply with Quote
Hi SG and welcome to the forum.

Secured debt is excluded from BR, so as you're in negative equity, you will be able to keep your home (a third party who you can nominate can buy your beneficisal interest for £1 + costs ... total circa £211).

However, if your property gets reposessed in the near future, any shortfall in what they realise at sale/auction and what you owe will become a new unsecured dent to yourself and can be included in your BR.

Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk
Don't forget the helpline on 0800 078 9367

Edited by - JulianDonnelly on 23 September 2008 15:25:01
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