Stimulating article by Constantin Gurdgiev in yesterday's Sunday Times entitled "Borrowers can't be locked into servitude" suggests that where a person falls into bankruptcy and a property is sold leaving a shortfall on the mortgage that a conditional bankruptcy release period should be available and full release should apply after three years.
He goes on to say that during this period no more than 25%-35% of after tax disposable income would be diverted to repayment of mortgage which is reasonably fair given the requirement for bankrupt person to start to pay rent. However he also suggests that not all of a person's savings should be set against the mortgage shortfall.
How the hell can someone with savings lying around in the bank be in mortgage arrears?
Seems like yet another kick in the backside for those who have been and are struggling with mortgage repayments at above 35% of income having already exhausted precious savings to keep up with repayments but see bankruptcy as a terrible failure.
He goes on to say that during this period no more than 25%-35% of after tax disposable income would be diverted to repayment of mortgage which is reasonably fair given the requirement for bankrupt person to start to pay rent. However he also suggests that not all of a person's savings should be set against the mortgage shortfall.
How the hell can someone with savings lying around in the bank be in mortgage arrears?
Seems like yet another kick in the backside for those who have been and are struggling with mortgage repayments at above 35% of income having already exhausted precious savings to keep up with repayments but see bankruptcy as a terrible failure.