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Moderators: TalbotWoods, JaneClack

By Lopez12
#310073 House worth 90K ? , Interest only mortgage 60k expires in 2 years, Joint paragon secured loan ( 37k left ) expires in 2018
House unsaleable due to wall cracks and condition, other houses in street have sat unsold for months.
Will be retiring in 2 years at 60.
Hoping to move to rented property in a couple of months.
In DMP since 2005, currently down to 25K after PPI claims
Wife already retired on 60 per month pension.
Any thoughts or advice ?
User avatar
By JaneClack
#310083 Welcome to the forum!

Well depending on your income after retirement you can either continue with the debt management plan for ever or look at bankruptcy as an option when you are in rented accommodation.
The mortgage shortfall would go into the bankruptcy and depending on your disposable income you may or may not have an income payments arrangement but that would last for three years. Bankruptcy is going to cost £700 to start with but you may feel this is a reasonable price to pay for becoming debt free.
Speak to your case officer in your debt management plan who should be able to advise or alternatively give one of the people in the mods signatures a ring!
By Lopez12
#369363 Thank you for the guidance.
A pension question.
I do not have a private pension but have been paying into the company pension scheme for 40 years, what happens to it in bankruptcy ?
User avatar
By TalbotWoods
#369453 Hi Again

Providing it is a HMRC recognised pension, which nearly all are nowadays, and you haven't been putting large additional voluntary contributions into it, then nothing at all. As since 1996 the Official Receiver has not been allowed to touch them.

But a couple of things to be aware of

:!: If you enter into bankruptcy, any basic payments you make towards the pension are fully allowed in your Income and Expenses, so going bankrupt doesn't stop you having or accruing a recognised pension.

:!: If you leave your current employer and move to another, then the pension is still safe, the OR cannot touch it

:!: If you retire and draw on the pension (even if you draw on it before retirement, which some people choose to do) then that is classed as income, and will be used in the Income/Expenses calculations to see if you are to have an IPA/IPO.

:!: If you retire or opt to release funds (under any form of equity release scheme) this will be classed a a windfall, so the OR will want all or most of that windfall.

Other than that, that's it.