Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By nervous nerys
#7972 Hi there, I've been scanning through the posts of this site for the last few weeksand have just plucked up courage to do a posting. Basically, house in negative equity (owe 155,500 on house worth 135,000 with interest only mortgage and secured loan for same term as mortgage - no provision set up to repay mortgage at end of term either) plus other unsecured loans/credit cards for approx 60K. Spoke to financial adviser, who advised us to do int only mortgage and secured loan in 2003, a few weeks ago and was advised to "chuck keys back, pay me £300 and I'll do DMP for you". Unconvinced, I contacted CCCS and have an appointment with them later this month. However, having read thru some of your previous enquiries I've a feeling they will recommend both of us to go bankrupt..

As yet, haven't defaulted on anything but having to use credit cards for living expenses and would have to overdraw for bankruptcy petition. If it came to bankruptcy I wouldn't be able to work where I am now and we wouldn't want to remain in this area - would like to relocate miles away. Sorry if this is long winded ! but does anyone know the answers to:-

If we declared BR would we still have to continue paying the mortgage and secured loan ?

In order to relocate (and survive until we got jobs) we'd have to sell furniture (ie beds, wardrobes, settee, table) - would the OR allow us to do so ?

If we were allowed to sell above items, how long after declaring BR could we do so?

Thanks in advance
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By Nicky
#7979 Have you considered the IVA route at all?

Before making any choices on how to tackle the situation, its best to get advice from people who will look at all options available and see which one would be suitable.

CCCS may do this for you. I'm not sure how they work in that sense, I know they offer free Debt Management Plans, but after that, I'm unsure.

You could go and have a chat with someone at your local CAB, or even contact FCL who offer free debt advice and look at you situation to find the best solution.

If you did go bankrupt, you would still be expected to pay your mortgage until the OR decides what to do about your property. As far as your furniture goes, I doubt the OR would be interested in that at all, unless you had antiques that were worth a few thousand. It is however always best to be safe than sorry.

What you need to keep in mind is that once you are bankrupt, your OR takes charge of all you assets and its up to him/her to decide what happens to them.
By nervous nerys
#7981 Thanks for that. I'll wait and see what CCCS say but I don't think the IVA would be for us as our income isn't that great and the mortgage and secured loan cost £854 a month - in March it'll go up by £100 on the mortgage and when interest rates rise so does the secured loan ! Basically, by the time we've paid that plus council tax, etc, and then added on living expenses we'd probably have about £30 spare a month (if that).
Will keep you posted.
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By JaneClack
#7982 If you are thinking og going bankrupt you would not necessarily lose your house - as long as you can continue to pay for it.

If the house is in negative equity you would be able to buy back the beneficial interest for £1 plus the conveyancing fee - the OR's office have a service for this.

Go to http://www.insolvency.gov.uk and download the leaflet on What will happen to my home? that tells you all about it.