Author Topic: Need to go bankrupt but how?  (Read 5480 times)

Billy12345

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Need to go bankrupt but how?
« on: Sep 12, 2011, 11:09:20 AM »
Hi, Can anyone advise on the following????
I am divorced for 4 years and my ex-wife moved out 5 years ago.  Her name is on mortgage and secured loan, but I have been making the payemnts as agreed to keep the house.  Since then I have been made redundant and have a new job with a greatly reduced wage, nearly half my income.  I see bankcruptcy as an option.

House Value approx £80,000

Mortgage and secured loan balance £110,000

Unsecured debts £26,000

Is it possible for me to go bankrupt?

Thanks for any help

James Falla

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Re: Need to go bankrupt but how?
« Reply #1 on: Sep 12, 2011, 01:30:47 PM »
Hi there Billy
 
It is absolutely possible for you to declare yourself bankrupt. However you need to consider how you will continue to pay your mortgage as a mortgage debt is not included in bankruptcy. If you could afford to pay your mortgage and secured loan if you no longer have your unsecured debt, then you could declare yourself bankrupt which would deal with these unsecured debt. You could then almost certainly make an offer immediately to keep the house if you want to.
 
If you can no longer afford to pay your mortgage or secured debt it is likely that the property will be repossessed anyway. You could then combine your bankruptcy with the repossession of the property. This would then take care of your unsecured debt and any mortgage / secured loan shortfall. 
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Billy12345

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Re: Need to go bankrupt but how?
« Reply #2 on: Sep 14, 2011, 03:59:22 PM »
Thanks for your response.

So if the house was repossessed and I went bankrupt, would the secured and unsecured debt be lifted off me, even with a shortfall?

Cheers

Billy12345

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Re: Need to go bankrupt but how?
« Reply #3 on: Sep 14, 2011, 04:00:45 PM »
I also have utility arrears, would these be accounted for too?

Thanks

James Falla

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Re: Need to go bankrupt but how?
« Reply #4 on: Sep 14, 2011, 04:45:59 PM »
Hi Billy123456
 
If the house was repossessed then the mortgage company would sell the property. It is likely that there would then be a shortfall on the mortgage and secured loan which you would still be personally liable for but these debts would then be unsecured. As such, if you went bankrupt, these debts would be written off. You could also include any utility arrears in the bankruptcy.
 
If you wanted to go bankrupt, you do not have to wait until the house is sold. You can go bankrupt straight away and any shortfall on the mortgage which materialises later will still be included in the bankruptcy and so you would not be liable for it.
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Billy12345

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Re: Need to go bankrupt but how?
« Reply #5 on: Sep 16, 2011, 01:54:49 PM »
Thanks very much for your help, this is helpful.  Would my employers need to know that I was going bankrupt?

Cheers

James Falla

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Re: Need to go bankrupt but how?
« Reply #6 on: Sep 16, 2011, 03:51:54 PM »
Hi Billy
 
There is no need for your employer to know and they will not normally be automatically told. However there are certain jobs where an employer does request you tell them if you go bankrupt or become insolvent. You should check your employment contract or have a discrete chat to someone at work if your are worried about it. 
 
 
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Billy12345

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Re: Need to go bankrupt but how?
« Reply #7 on: Oct 27, 2011, 12:10:27 PM »
Hi James,
Thanks for all your help in this matter, I have 1 more question.  I am going to go bankrupt, but if I file the forms before the house is sold and then there will be a shortfall in the mortgage.  Will I still be liable for the shortfall?  Or shall I wait until the house is sold?  Please could you advise
Regards
Billy

Billy12345

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Re: Need to go bankrupt but how?
« Reply #8 on: Oct 27, 2011, 12:14:20 PM »
When I go bankrupt, how long will the bankruptcy last?  I understand my bank account will be frozen how long for etc...
Cheers

Billy12345

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Re: Need to go bankrupt but how?
« Reply #9 on: Oct 27, 2011, 12:21:07 PM »
Sorry James, do I have to make a monthly payment when I go bankrupt.  I am only earning £850/month from my new job, would they take in to consideration, my rent, utility bills, council tax, housekeeping, phone etc... out of this before deciding what to take?  and how long would this last for?

James Falla

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Re: Need to go bankrupt but how?
« Reply #10 on: Oct 27, 2011, 02:16:50 PM »
Hi Billy
 
I would recommend that you hand back the keys to your property and allow the mortgage company to start the repossession process first. However once that is done you can go to the court and declare yourself bankrupt before the house is actually sold. Eventually when the sale happens and the shortfall is crystallised it will still be included in your bankrupty.
 
The bankruptcy itself will last for 1 year. However if you are asked to make monthly income payments these will last 3 years. Of course you will only pay what you can afford. This is determined from the income and expenditure information that you include on your application form so you must make sure this is completed correctly. Have you downloaded a form to have a look at yet? If not you can do so by looking at beat my debt. You should also open a new bank account before you go bankrupt which you will then be able to use.
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poly

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Re: Need to go bankrupt but how?
« Reply #11 on: Oct 28, 2011, 09:26:01 AM »
Billy good luck!

Hi James,

Wanted to ask the sense of  bankruptcy lasting a year is that universal?


James Falla

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Re: Need to go bankrupt but how?
« Reply #12 on: Oct 28, 2011, 11:35:30 AM »
Hi Poly
 
A standard bankruptcy in the UK will always last 1 year. It is the rule that the Insolvency Service has laid down. It was reduced from a standard of 2/3 years a couple of years ago. The official receiver is only allowed to reduce the 1 years period in very specific ceercumstances where it is clear that keeping the person bankrupt for the full year is not in anyone's interest. The official receiver is also capable of extending the bankruptcy period for up to 15 years using a bankruptcy restriction order. However, this would only be in rare occasions where the individual is not cooperating with the OR.
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poly

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Re: Need to go bankrupt but how?
« Reply #13 on: Oct 31, 2011, 01:36:57 PM »
Thanks James!

Billy12345

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Re: Need to go bankrupt but how?
« Reply #14 on: Dec 14, 2011, 09:39:48 AM »
Hi James, I have started bankruptcy proceedings. But still have my house, it will be repossessed in the mew year sometime, as I will stop making payments, will this shortfall then go into the bankruptcy?  Also I  not in touch with my ex wife, I presume she will then be liable for the shortfall?
Thanks for help yet again