My husband and I have been declared bankrupt in Feb 2010. The property is in my husband name and is in negative equity and we have 2 secured loans. If the house is not sold within 3 years and the receiver will return the property back to us, what will happen with the 2 secured loans and all the arrears towards the mortgage? Are we still liable for the secured loans or not? What will happen with the secured loans if the mortgage lender will give us an eviction date and we have to move out as we cannot afford the mortgage payments? Thank you verry much
The shortfall on the property following repossession is a provable debt in bankruptcy released upon discharge and so are the secured loans. Even after three years when or if the property reverts back to you,even if you purchase the beneficial interests, you will not be responsible for any shortfall on these secured debts at any time, Unless you sign a deed of arrangement with the lenders post bankruptcy.
You are correct that the Trustee has 3 years to deal with the property or it will revert back to you. If the house is in negative equity they might look to transfer there interest to a 3rd party,family member or friend for a nominal fee plus legal costs.
In relation to the mortgage if you do not keep up to date with the mortgage payment then the secured creditor will look to take possession of the property and sell it. If they sell it for more than the outstanding mortgage then the surplus will go to the secured loan creditors who rank in order of the date they registered there secured charge. If there is a shortfall to these secured loans they will revert back to unsecured loans and will be absorbed under the bankruptcy.
Thank you so much for your reply. Could it take longer than 1 year to be discharged if the property will not be repossessed and we have to wait up to 3 years to see if the receiver will sell the property? How about if the bailiff will show up to my door? What will happen with my furniture and stuff? I guess what we are looking forward is to be discharged asap and I don’t know what to do next. We have an 11yr old child and I cannot have a phone line or internet and he needs all of this for his school and the flat is way too small for 2 kids. As well we cannot afford the mortgage repayments and to pay the secured loans. Will it be easier and quicker to be discharged if the flat will be repossessed? Thank you ever so much
The discharge is seperate from job of dealing with your assets and liabilities, as long a syou co-operate you will be discharged in no more than 1 year even if it takes alot longer to sort the house out.
My husband and I have been declared bankrupt
Posted - 14 May 2010 : 21:14:12
