hi i have loads of debts and still wondering if i am going to go br.one of my debts is secured but am i right that this wont be cleared but also i am into negative equity so if house was sold there is only enough money to pay mortgage.what would happen to my black horse secured loan.thanks
Hi bankruptcy would only affect your unsecured debts.
Your mortgage and any other secured loans would still have to be paid. If you tried to sell a property for less than the total secured against the property the lender or lenders can object although the decision lies ultimately with the first charge lender.
So if your house, in the present slump, was worth £150K and you had a mortgage of £150K plus another secured loan of £20K the 1st charge lender could allow this sale. In this scenario, as in bankruptcy, the outstanding secured amount, on sale of the property, becomes unsecured as the proprty no longer belongs to you to secure the loan against. Now that the previously secured loan has become unsecured it can be written off, with your other unsecured debts, by your bankrupcty.
what would happen to secured loan?
Posted - 28 September 2008 : 21:54:19
