Move back into the house after bankruptcy?

[No name]

Hi , myself & husband declared bankrupt in 2016 and discharged in 2017. I recently requested a copy of my credit report and it stills shows the mortgage. When I rang the bank I was told how much there was in arrears and was I in a position to clear that now!!! I had to explain to them what the circumstances were and he said that there was no record of it there and that the house was just up for repossession.
Obviously I don’t want all the arrears that have built up but just wondering if there is anything stopping us moving back into the house and paying the mortgage ?

 

[TLO]

No. Go for it. Depending on your new financial circumstances, and the level of arrears, this might be a good opportunity to stay on the property ladder.

The "family home in bankruptcy" is covered in this thread:

https://www.askaboutmoney.com/threads/update-on-dealing-with-family-homes-in-a-bankruptcy.210611/

In a nutshell, the Official Assignee (OA) has three years in which to do something with the family home. If the OA does nothing then after 3 years it reverts to the former bankrupt(s) unless the bank has sold it in the mean-time. The main reason for the OA doing nothing would be if the property is in negative equity.

If the bank is willing to cease repossession proceedings in exchange for a resumption of monthly mortgage payments then moving back in could be a good move. The arrears are unlikely to go away so if you are planning on staying long-term then you should plan to pay them down.

Just be careful that you aren't taking on responsibility for too much debt. In other words, are the arrears too much to manage? Bankruptcy is, amongst other things, supposed to give you a fresh start.

 

[No name]

Thanks for the reply , we are in a position to pay the mortgage again so that’s why it would be great to think we could go back in.
I was just hoping that in the time since we declared Bankrupt those arrears wouldn’t be liable for us to pay ?

 

[TLO]

You're not liable for the arrears, or the rest of the outstanding mortgage. Your bankruptcy removed this responsibility from you. But you don't get to keep the house and dodge the mortgage or it's arrears. Mortgage payments are often cheaper than rent. So it might make sense to move back in, start paying the mortgage again, and in six months to a years time see if the bank will let you pay an increased monthly amount that will pay the arrears over the remaining term of the mortgage. They might. It'll be up to the bank.