My husband and i each have unsecured debts. He has unsecured debts of approx £30000 and i have an unsecured debt of approx £10000. The house and mortgage is in my name, and i also have a secured loan on the property in my name. My husband is unemployed and has been told his JSA will be stopped after tomorrow, which means we have to live on just my income. I have a monthly income of £1635 after tax, and child benefit of £130 a month. Our monthly outgoings (excluding the unsecured debts) is £1690. We are not in arrears on the secured loan or mortgage. We contacted the CCCS 2 years ago to help us with the unsecured debts. We can no longer pay the agreed amount, and we are looking at bankruptcy, but only over the unsecured debts. Is this possible? Would we still risk losing the house? We have no equity in the house. The secured loan is £50k and the mortgage is £68k. The house is valued at approx £85k. Any advice would be greatly appreciated.
welcome to the forum The secured debts can't be included in bankruptcy anyway. You are well into negative equity so in brief here is how it works.
You both declare bankruptcy and the house is safe as long as you keep up the secured repayments. The OR who deals with bankruptcy case will only ever be interested in a property if there is equity. The secured lenders won't care either as long as you pay. If not they will just follow the usual repossession route at some stage.
However, to keep the property even when there is no equity you do have to pay the OR for the beneficial interest. This may sound bizarre but you will be able to buy your husband's BI, and he yours for the pricely sum of £1 each. There is also a legal fee of £211.
Thus your property will stay with you for £1 + £1 + £211 and for as long as you pay the mortgage and secured loan.
My husband and i each have unsecured debts.
Posted - 19 March 2009 : 21:07:27
