early discharge and house reposession

[sjw]

hi, both hubby and me when br in april , we have both recieved letters regarding possible early discharge however we are having difficulty pay the mortgage and it is very likely to be reposessed in the next few months , wouldwbe be liable for any shortfalls cost or fees incured because of this or would it be covered by the br even if we were to be dischared.

p.s we did not buy back the equity in the house from the OR not sure if this makes a difference.

thanks x

[kallis3]

Hi,

I don't know the answer to this, but I'll bump it back up so one of the technical experts can see it and advise you.

[wen]

By the sounds of it, as you have not bought back the beneficial interest then the house is still under the control of the OR, so I would have thought any shortfall would be covered.

[sjw]

thank both, i thought that was the case but wanted to be sure.x

[Reviva UK]

I would really suggest you speak to the OR as a matter of urgency and advise then that you are planning to leave the house.

Did you remember to put the mortgage company on the UNSECURED list of creditors as well to ensure that any shortfall is covered?

[sjw]

no i didnt paul, but the mortgage was not unsecured at the time, i htought that any shortfall would be covered by the br as the house is not officially ours anymore but the OR's.

[wen]

Paul is right, you should speak to your OR first before you take any steps.

[David Mond]

Don't worry the house vests in your Trustee (OR) even after your release as it was an asset (with or without equity) at the time of your banruptcy - but no harm in speaking to him though!

[Reviva UK]

Hi David

just to confirm - are you saying that if you have petitioned for Br and have not included the contingent liability for the mortgage shortfall, and then either :-

1. subsequently default on mortgage & have the house reposessed

or

2. Change your mind about remaining in the house during the period of Bankruptcy and want to get out of the burden because of the dropping house prices

that the debt ( now incurred after the point of Br) is included in the bankruptcy?

Grateful for your thoughts

[David Mond]

Hi Paul,

My understanding is any asset is caught in any bankruptcy and any missing liability is also caught within the same bankruptcy so:

1. Yes

2. Yes

[Reviva UK]

Thanks David

[David Mond]

My pleasure

[sjw]

thanks for your replies, much appreciated.x