Uk bankruptcy implication for co-owner of property

[Tearyeyes]

Hi there,

Longtime reader first time poster!

I want to move to the UK to declare bankruptcy and I am looking for some advice on my situation.

My friend and I bought a property back in 2007 with a 320,000 100% mortgage with the aim of owning it for a couple of years and reselling it at a profit........obviously that didn't happen.

The property is currently worth approximately 150,000. There is currently 30,000 in arrears on the property as we both took paycuts, lost overtime and accrued stupid personal debt. So the current outstanding mortgage is €330,000.

I would like to know what would be the implication on my friend if I go bankrupt in the UK? I know in theory she would be then liable for the full amount but because the property is in such serious negative equity would our lender maybe allow her to continue to own the property and buy my half out for a nominal fee of €1 as it would be still more profitable for the lender to do this than selling the property.......if they could even manage to sell it!

Also, as I obviously have no savings because of trying to service my debts I need to get money together to set up my COMI in the UK. Do I stop making mortgage/loan/credit card payments now so I can get some money together or do I need to keep servicing these debts until such time as I file my petition for bankruptcy in the the UK.

Any help would be greatly appreciated.

 

[Steve Thatcher]

Hi Teary,

your friend is jointly and severally liable on the mortgage. In truth your friend is in no different position legally in the vent of your bankruptcy than they are.
With such a huge shortfall and arrears of €30,000 you have to wonder how much longer the bank will hold off before taking possession proceedings.

If i was advising you and there was no one else involved I would say stop paying the mortgage and use that money to set up your comi.

That will have an effect on your friend and so you would need to explain what you are doing and why to them.

I guess at the end, you need to take steps to sort out your own problems and as long as you have been clear and honest no one can criticise you.

Steve Thatcher
www.stevethatcher.ie

 

[Tearyeyes]

Thanks is much for the information Steve.

 

[Brendan Burgess]

While Steve has answered the question you have asked, you should complete the
Standard Format for mortgage arrears and negative equity case studies to get a full answer.

It's not usually necessary to go bankrupt to deal with mortgage debt.

You may be able to do a deal with the lender which would avoid the need to go bankrupt. However, if you have lots of other debts, then it's probably the right thing to do.

Brendan