The job of the receiver/trustee is to repay the debts as far as they can.
If there is equity in the house (ie it is worth more than the mortgage plus the costs of selling) then it is likely that the house would be on the receiver's radar to be sold. If there is no equity, then there is no point selling the house, because it could simply create more debts.
The fact that the mortgage is interest only suggests that there is less likely to be significant equity in the property, so it is less likely to be sold.
As far as the house is concerned, it is as simple as that.
The situation will be more complicated if the house is jointly owned, because the receiver will only be able to take half the equity, and depending on the circumstances they may not even be able to force a sale if there is equity.
Please also note, that regardless of the decision of the receiver, being declared bankrupt is generally a breach of the terms of a mortgage. That means the mortgage lender could decide to repossess and sell, even if the receiver chooses not to.
Sorry everyone, I have written this on behalf of someone I know. Obviously it's not to do with me I'm only 20! I was mistaken, she bought the flat 9 years ago and was renting it out but 2 years ago moved into it. She paid of some of her debts.
They are more than interested in it- they are gonna force you to sell it
to explain simply - you are an idiot
You owe money - you cant repay it from your income but you have assets that are worth money, so you have to sell those assets to pay what you owe.
There is also a good chance tou may be charged with fraud
You say you were declared bankrupt 2 1/2 years ago, but 2 years ago you bought a house/flat.
But in order to do this you must have had cash to add to the mortgage you got in order to buy the house/flat (cos you cant get 100% morgages now) AND you did not tell the mortgage company you had been declared bankrupt 6 months before (cos they would never have given you one)
THAT means its very likely you did not declare that cash at the bankrupcy hearing, AND you obtained the mortgage fraudulently
(both of which are offences)
Corse all of this depends on if your story is true - personally I strongly believe its bullsh//t
Ignore the above, there is nothing to say they ARE going to force the sale.
If the property is worth ￡100k (to keep it simple) and the mortgage is say ￡85k - then they are unlikely to force a sale. By the time they accept an offer on it, pay costs (estate agents etc) then there is probably not enough equity in it.
If however the flat is worth ￡100k and the mortgage outstanding is ￡75k - then they may. ￡100k if they accepted ￡90k paid out ￡5k in costs, there is still ￡10k left in it to pay towards the debts.
It really will come down to the financials. If your friend has young children or is able to negotiate a payment which everyone would be happy with then it may protect the home to some degree.
If this person has only an interest only mortgage then it's likely that the flat will be sold, the mortgage paid off and the rest will go to the official receiver.Your friend needs to talk to the insolvency service to see what their intentions are...as it's an interest only mortgage then it hardly counts as an asset....ring on Monday and ask
So why were you not worried when you went on holiday for a month with BOYFRIEND a few months ago?
Get legal advice you are about to lose your home! And technically YOU own nothing the bank that holds the mortgage does as you have never paid a dime toward the home only interest.
depends where you live, I live in Scotland and a few friends who own their own property and still paying the morgage have went bankrupt and it doesnt affect their home, Good Luck
Hi all,
I was declared bankrupt two years, 6 months ago. I have been living in my home on my own for two years which I own fully. The mortgage is interest only. I have been told by my mortgage company that the official receiver has been in touch with them during may and June. Does this mean they are interested in taking my flat? Is there any way around it? Please explain in basic terms as I'm a bit bad with all technical information! Thanks
