|
|
 |
 |
FORUM |
|
> Browse and post on our forum |
|
|
|
 |
|
 |
|
Note: You must be registered in order to post a reply.
To register, click here. Registration is FREE!
|
| T O P I C R E V I E W |
| Jules |
Posted - 14 March 2009 : 18:36:50
Hi everyone,
I am in the process of considering bancruptcy, but as with many of you, I have a million or so questions first before I take this route.
My situation is that I have a fixed rate mortgage on my flat tied until 2010 and have never missed a payment. Unfortunately it is now in negative equity. 2 years ago, I lost my job and as I had debts of £30k following the break up of my marriage I panicked and moved in with my Mum 60 miles away and got a tenant in the flat to help pay the mortgage. I got a job immediately as an insurance advisor and also an evening job to suppliment my income. I took advise with the CCCS and got a payment plan organised with them to pay my debts, I have a further 7 years to go.
2 weeks ago I was signed off by the doctor with stress and exhaustion and he advised me that working the 2 jobs was directly affecting my health. I spoke to the CCCS and with a change in my income my debts would take 16 years to pay off. We talked about considering bancruptcy. My questions are:
1) What would happen to my flat and would I be able to continue to rent it out?
2) I know that I would not be able to work in my current job if I was bancrupt as it is regulated by the FSA,what happens when I lose my job as a result of going bancrupt? Would I need to get another job first?
I have many more questions, but these are the 2 burning questions which are presenting a hurdle for me. I only know that I cannot continue with my current lifestyle any longer.
I feel I am running out of options, can you help advise
Many thanks
|
| 2 L A T E S T R E P L I E S (Newest First) |
| Jules |
Posted - 15 March 2009 : 20:18:50
Hi John,
Thank you so much for your reply to my questions. I really appreciate your advice as I have no idea what way to turn at the moment.
My flat is in negative equity and I don't want to hang on to it. Is there a way I can hand the keys back to my lender and not owe them anything after bancruptcy?
I am not so concerned being out of work for a short time while I find another job (ie. I don't want this to stop me taking the best option) but what would this mean to the OR?
Many thanks
Jules |
| John |
Posted - 15 March 2009 : 18:15:56
Hi
if you are occupying the property yourself and it is in negative equity you would normally be offered the opportunity to purchase your beneficial interest back from the OR for a nominal fee.
The alternative would be that the OR could wait a while as he has 3 years in which to decide whether to force the sale of the property or offer the beneficial interest to you. If the OR believes the property market is such that the value is unlikely to increase sufficiently for the property to gain equity during that time then you will be offered the BI for a fee as stated above.
The key is that the OR must decide which way to go within the 3 years as if he does nothing it's too late and the property will automatically become yours again.
With an investment property the rules are quite different. The OR is not restricted to 3 years in which to deal with the property, there is no time limit therefore in your case his obvious route would be to put a charge on the property.
If at anytime in the future you wish to sell the property the OR is now an additional chargee as well as the mortgage lender.
Lets assume you wait 10 years and there is £30K equity over and above the mortgage amount. If you sold it all of the £30K would go to the OR to pay off the charge.Worse, if it increased by £50K then your creditors would be paid in full on the sale of the property as would your mortgage lender. The remaining £20K would no doubt be claimed by the trustee as his fee.
To summarise, if you cannot service the mortgage payments and live in the property yourself, perhaps letting out a room or two, then I see little point in holding onto it.
It would make sense to get another job before bankruptcy or you are guaranteed to have a period of unemployment between losing your current position after bankruptcy and finding a new one.
John White
England Jackman & Spacey |
|
|
| bankruptcyhelp.org.uk Forum |
© bankruptcyhelp |
 |
|
|
|
|
 |
|
|
|
|
|
