Author Topic: Home repocession if in joint names during personal bankruptcy?  (Read 1324 times)

tommos

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hi there, some advice needed.
 
I am a late 50s senior executive whos job was made redundant just over two years ago. Had no luck on the job front and the prospects are not getting any brighter!
 
My wife has a 25 hours pw part time job and I have pensions (that I took early to get some money to live on) along with child benefit for our remaining child living at home (16yo). This broadly gives us an income stream after tax of circa £2k pm.
 
Our mortgage of £225k has a monthly variable repayment of £471 which until the end of April is being met by payment protection cover. Once that ends we will need to have discussions with the building society. We have a two bed flat which once fees are paid might at best realise around £240k.
 
Our outgoings on household expenditure, insurances etc (exc the mortgage payment) are circa £2300pm. Of that the most worrying is the debt on my credit cards that has built up to around £24k with minimum monthly payments of £400 pm which is eating in to the modest final savings we have of £2k. We have one small car that is owned outright and is registered in my wifes name.
 
All the current credit card debt is in my name. My wife has a loan outstanding that paid for the car but that will be fully settled by September. She has credit but no other debts.
 
We have never defaulted on our debts and our credit rating was previously very good. We have no CCJs from the past.
 
We are seriously considering undertaking personal bankruptcy in respect of my debts. As the mortgage is in joint names would the property have to be sold as part of the bankruptcy process? At best the maximum equity that might be realised would be around £15k.
 
What other options might be open to us as alternatives?
 
In terms of benefits we are wondering if we would be better off renting than owning but the low interest rate we are on with the mortgage could not be matched on renting. Our flats are currently renting out at over £1000 pm.
 
Any thoughts would be appreciated.
 
Regards
 
Dan

James Falla

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Re: Home repocession if in joint names during personal bankruptcy?
« Reply #1 on: Feb 23, 2011, 11:07:26 AM »
Hi there Dan
 
Due to the equity in your property, Bankruptcy may not be the best soltion for you. Even though the property is in joint names, this would not prevent the official receiver forcing its sale to access your half of the equity if they deemed that this would ultimately be beneficial to your creditors.
 
If you declared bankrutpcy, the only way to be sure of securing the property would be for a third party to buy back your half of the equity from the OR. The offer would have to be pretty much the same as the value of your equity (ie about £7500). If this were not possible the OR would keep hold of the title for up to 3 years before making a decision on whether to force the sale or not.
 
Given the above I think it may be better for you to consider either a debt management plan or even an IVA.
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