Houses and Bankruptcy

[ThomasT]

Ive noticed alot of threads were people discuss bankruptcy as sometimes the only way out of a large debt situation and that they will probably lose their house, if this happened, where would they live? Surely they wouldnt get another mortgage? or would they? would they have to rent some where until their credit rating was healthier?

[Ethel]

A bankrupt would not get a mortgage for quite some time and would have to rent.

[Didwot]

If someones debts are too big to cope with then they may lose their house anyway. If they own the house with their spouse/ partner it may be possible to do a deal with the Trustee in Bankruptcy for the spouse/partner to buy back the bankrupt's interest in the property, albeit at a fairly full valuation.

[dans1977uk]

You may not loose your house by declaring yourself bankrupt if there isn't a lot of equity within it. If you're considering Bankruptcy if you have a lot of equity within your house see an independant mortgage advisor close to you (don't pay more than �995 at most in broker fees, and nothing until the deal is concluded) as they may be able to release equity from your house and reduce your monthly outgoings.

If you have no equity there would be no benefit to the courts or your mortgage lender in repossesing your house so, providing you agree to maintain repayments (perhaps at a slightly lower level) you'd probably keep your house.

Also, you can now get Bankruptcy discharge mortgages from a number of lenders which you could use in the future should the worse happen.

Maybe you could consider an Individual Voluntary Agreement (IVA) instead of bankruptcy?

No matter how poor or stuck you are I'd always recommend findng some one you can trust, be it an IFA, mortgage advisor or solciitor to speak to before doing anything. Perhaps try Citizens Advice or National Debt line if you're in trouble.

[myvesta-sean]

Hi ThomasT,
The most common bankruptcy questions and answers are discussed in depth in the Myvesta video clip series. I have attached the link below:

http://myvesta.org.uk/media/video/bankruptcy/i ndex.html

Also the forum is helpful too:

http://myvesta.org.uk/forum/viewforum.php?f=2

Hope this helps!