Implications of Bankruptcy in the UK

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Pablo21

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HI there,
I lost my job in ireland in 2008 and then split with my partner. We had a €480K mortgage jointly on a property (Our home). I moved to the UK not long after and have been here since. I didn't declare bankrupt at the time. I rented the house out and gave the money to the bank. The bank has now pushed for a repossession. There is massive negative equity as the house was never fully finished. What are the implications of me now declaring bankrupt in the uk? I'm director of a small company in the UK so I'm guessing I will have to resign as director. Can irish banks access funds in UK account's etc. All info greatly appreciated.
 
Pablo,
From what I have gleaned from other AAM posts I give this comment.

1. Looks like you are in Uk since 2009 ie 6 years.
2. Bank has to now lived with you passing rent to Bank since then.
3. Instead of Repo would Bank (given that you are in Uk since 2009) accept voluntary sale as full and final? Unlikely but worth asking.
4. You say massive Negative Equity so I presume there is little point in offering a fixed amount for a few years.
5. Since you are a director of small company ,I expect you can explain your reasons for resigning Directorship, (All in UK know we went property mad)
6.No Bank can access YOUR funds without your say so.
7. If you go Bankrupt all your assets including funds in any bank account anywhere are (handed) over to person dealing with your bankruptcy.It means you will for circa Bankruptcy time live on little nuff.
8. There are plenty good Bankruptcy advisors in Uk, suggest get an appointment.
Good Luck.
Hope this helps.
 
Hi Gerry,
Many thanks for your response. I'm almost 6 years in the UK. The property hasn't always been rented as it wasn't completed but when it has been rented, and its currently rented for a term of the next two years, the money is going to service the mortgage. The rent is small in comparison to the mortgage but that's purely because the house is not completed. The negative equity is circa 300K with arrears etc so I don't think they will accept the sale as full and final.
I have no problem resigning as a director (Although not excited about it). Will I be restricted from being a director in the future because of the bankruptcy?
I also have a young family here now and would like to buy a property here in the next couple of years. What impact will the bankruptcy have on that? Will my future home be protected from the banks if it has positive equity?
Thanks for all your help!
 
Pablo21 said:
Hi Gerry,
Many thanks for your response. I'm almost 6 years in the UK. The property hasn't always been rented as it wasn't completed but when it has been rented, and its currently rented for a term of the next two years, the money is going to service the mortgage. The rent is small in comparison to the mortgage but that's purely because the house is not completed. The negative equity is circa 300K with arrears etc so I don't think they will accept the sale as full and final.
I have no problem resigning as a director (Although not excited about it). Will I be restricted from being a director in the future because of the bankruptcy?
I also have a young family here now and would like to buy a property here in the next couple of years. What impact will the bankruptcy have on that? Will my future home be protected from the banks if it has positive equity?
Thanks for all your help!
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Not 100% sure but think once Bankruptcy term is finished you can become a Director again.
Once over, the Bankruptcy will have no impact on buying home, your biggest issue will probably be building up an adequate deposit.
You future home will not be protected if it is in positive equity, but provided you keep your payments up it cannot be touched. However if you do not pay your mortgage they will rightly repossess ,take their share and hand you back the residue.
The Bank just might accept sale of Irish House as they are getting more pragmatic, a lot may depend on your ex-partners finances.
 
Thanks Gerry. Are you saying that if I come out of bankruptcy and buy a house in the UK in a couple of years time that the Irish bank could pursue me for some of the equity? Sorry if I misread your post o_O
 
Pablo21 said:
Thanks Gerry. Are you saying that if I come out of bankruptcy and buy a house in the UK in a couple of years time that the Irish bank could pursue me for some of the equity? Sorry if I misread your post o_O
Click to expand...
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Nope , they cannot.
 
Hello Pablo21 perhaps I can add some comments.

You should speak to the bank about what happens to the shortfall if the property is sold. Their response will determine your options. The default position is that they will require the whole amount repaid. if you can show them you have no prospect of making any payments, they may leave matters in abeyance after the property is sold and do nothing. As the debt relates to land they have 12 years to chase you for the shortfall. So if you bought a property in two years, they could register the judgment here in the UK and get a charging order over your new property to secure the judgment. They then get then judgment repaid when the property is sold. It may also hinder you selling the property in due course.

If you decide to go bankrupt, you cannot be a director of a limited company for the 12 months of your bankruptcy. Once you get your automatic release you can be a director again.
The Official receiver will gather in all your assets, this can include cars and excess income. You must need a car for work or to seek work generally to keep it. if you have more income that you need for your reasonable living needs the OR can take and keep this as well, but not just for the 12 months of your bankruptcy, but for 36 months. It is important you take advice on how to manage this if it is likely to be an issue.

Your bankruptcy WILL have an impact on your ability to get a mortgage to buy your property. Your credit file here will be very much affected. Most lenders will not look at you certainly for over three years because of the bankruptcy. After then certain lenders may deal with you but you will pay a price until you can re-mortgage.

Hope this helps

Steve Thatcher
 
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