Surrendering home before bankruptcy?

K

Kitty1

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Looking for some advice please.

I am currently looking at bankruptcy / insolvency options. It looks pretty likely that insolvency arrangement will be refused.

If this is the case I will be filing for bankruptcy.

I have no interest in the home I jointly own with my ex partner which is now sitting empty - and he is pushing me to sign forms to surrender it to the bank immediately.

Am I at any disadvantage doing this now , before applying for bankruptcy?

House is worth circa 150k outstanding mortgage is 300k and arrears of 20k. I also owe 25k in personal debt.
 
No, I don't see any disadvantage.

If anything, it would mean that you have no secured debt.

So you could apply for a DSA.

The only possible caveat would be to ask the lender to write off the shortfall for your agreement to surrender voluntarily.

Brendan
 
So far, by asking them "informally" they have said the only option they will entertain at present is the voluntary surrender of the property, and that they will look at the shortfall ONLY after the sale. The documents they sent me to sign specifically state I will be fully liable for any shortfall.

My issue here is it could take them a year or more to sell the property and during that period I have no protection from the other banks that I have personal debt with that I cannot pay.

They have suggested they will refuse any insolvency arrangement at this stage.

Therefore my only option will be bAnkruptcy. So sorry if I sound confused - what I'm wondering is if I surrender the house before applying for bankruptcy will it put me at any disadvantage , or make me not eligible?
Bankruptcy seems better to me than a DSA anyway, as it is over faster, I have no assets and do not wish to keep the property
 
If you surrender the home, you will then be left with unsecured debts.

The lender might support a short period DSA if you have no money to pay your creditors.

Brendan
 
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