How do I go about not losing my home if I file for bankrupcy?

Question

I have a terrible problem and I either need to file for bankrupcy or get an IVA but the house I will lose is my mothers but is on my name along with my Dads who passed away a couple of weeks ago. My mother knows nothing about my problems and is already severely depressed and thinks debt is Satan and would be devastated if she lost her home as before my Dad died he paid the whole mortgage off to ensure that she would get by.

Answer 1

You won't lose your house. Go talk to a bankruptcy attorney before you worry yourself to death.

Answer 2

Welsh Girl

My answer only applies if you live in the UK. As a professional debt adviser I am very worried that you are seeking help here and not through a channel with credibility. I am sure that the previous answerer's are well meaning but frankly they appear to be mis-informed or American therefore under different jurisdictions.

Your situation is serious as I am sure you realise and the house you mention IS at risk in a UK bankruptcy. The fact that your mother lives in the property will not deter creditors from seeking to sell it to clear your debt because if it is your name on the title, in the eyes of the law you own the house and it can be sold to pay your debt.

I am reluctant to advise you through this forum because I do not know enough about your circumstances and I sympathise with an earlier comment that suggests there are many companies offering debt help but with a hidden agenda. The inference is that fee charging companies are not as good as the charitable organisations. This is untrue, people in your position need clear and accurate advice whether they pay for it or not, the emphasis should be on best advice not cost.

You do have other options an IVA you have already mentioned, but it may be that the equity in your house excludes you from doing that.

The advice given by IVAN R is flawed in many respects. For ease I will list the points I don't agree with.

1. You will keep your property in an IVA , but there is no guarantee that creditors will allow you to enter into an IVA, it depends on how much releasable equity rests in the property
2. You cannot assume that you will write off any percentage of the debt. Creditors expect as much as is possible to be repaid and if there is a balance at the end of the IVA term that would be required to be paid through a remortgage.
3. IVA providers are highly regulated by both the DTI and the IPA their governing body, it is the unregulated debt management companies which are giving other companies within the industry a bad name. As long as you choose an accredited company you should have no problem.
4. The CCCS do give free advice (like many others) but if you need to do an IVA they will pass you onto their Insolvency Practitioner who will charge just like any other IP in the country.
5. In bankruptcy you will definitely lose your house and details of your bankruptcy remain on the "Bankruptcy Register" for a minimum of 6 years. You will be automatically discharged from bankruptcy after 12 months and will be able to seek credit from that point on.
6. In whatever type of repayment plan you enter into, you are only allowed to have a basic bank account this is because ordinary bank accounts have overdraft facilities which are technically credit.
7. The comment about not having credit on a mobile phone is rubbish primarily because it is not credit, how can it be you have to buy it, that's why it's called "Pay As You Go"

You need a qualified expert to help you out, organisations like the CAB are fine but the advice you receive will be as good as the VOLUNTEER you meet on that particular day. Let me put it this way if you had toothache you would visit the dentist, the expert, not the doctor who could identify the problem but not necessarily help

I suggest that you contact an independent Insolvency Practitioner and seek some professional advice, most will give a free consultation and then recommend a solution. If you are unsure how to access one my company myIVA-Adviser has an in house Insolvency Practitioner who will make no charge for advice given to individuals in your position. Please follow the link at

http://www.myiva-adviser.com

or call 0800 088 7503 for free advice

One more point to bear in mind , your question doesn't indicate where your fathers half of the property has gone, if it has been left to your mother and she is not party to the debt at least half of the equity is ring fenced.

Your situation is complex and I am sure you understand my reluctance to go into too much detail I would however be happy to give you free advice with no obligation. If you want to contact me call 0800 088 7503 and ask for Chris

Answer 3

Hello,

(ANS) You need to be clear about the difference between IVA & Actual Formal Bankrupcy to start with. There are BIG differences between the two things.

**With an IVA you can and would keep your property (keep your home), with IVA a large chunk of your debt will be written off it could be as much as 50-60% but you still have to agree with your creditors to pay the remaining amount left over. This could be in very smal amounts over a long period, but its whats acceptible to the creditors, its how much they are willing to accept from you in regular payments.

**NOTE: with IVA avoid panicing and going to debit busting companies that make BIG promises to magically clear your debits. Why? because if it sounds too good it probably is!!. These debit busting firms will set you up an IVA but will charge you a large fee for doing that. Normally its around 10-15% of the total orginal debit, a typical fee could be around £6,000 for a 100K debit.

**DO CONTACT:- The CCCS ( thats the consumer credit counselling service) They are a national charity who help people who have got themselves into financial difficulties, they can give you free advise and can help you with an IVA too. They have a website & phoneline you can contact them on.

A quick Yahoo or google search for CCCS should get you their details.

**In formal bankrupcy YES! you definately are in real danger of loosing your property if its your biggest assett. With Bankrupcy it affects your credit history with immediate effect and used to remain on your credit history file for 5yrs but I think thats changed now too only 1year. If you are declared bankrupt you will only be able to have (hold) a basic bank account but NOT any credit cards and you will be prevented from taking out any new credit in any form, even mobile phone top up's etc. until the 12months have passed and your bankrupcy is lifted.

Hope that helps?

IR

Answer 4

Filing a Chapter 13 may allow you to keep certain properties for which exemptions are allowed. You would either have to know the exemptions that are allowed in your state, or you'd have to consult with a bankruptcy attorney. If you have a steady source of income, and can come up with a reorganization plan to pay off your creditors in a number of years, then it may be possible. You should probably talk to an attorney to determine your best course of action.

Answer 5

UK answer. You won't lose your home as your mother is living there and other reasons but you do need good financial advice. If you are in the UK ,Citizens Advice Bureau should be your first call. Do not and I repeat not file for bankruptcy without professional help first. You probably don't need to go bankrupt. Good luck.

Answer 6

You will never loose your home in Bankruptcy. Not unless it's a home your not living in yourself and is a rental or something like that. Then they may sell the home to pay off your bills. The system never puts anyone out on the street.

Answer 7

You need to consult with an attorney. Most jurisdictions allow you to keep a portion of the equity in your primary residence. That exemption can be substantial but you'll need to consult with a bankruptcy attorney to know what you're dealing with.

Answer 8

you're entitled to eliminate own possessions except those that are completely affixed to the premises (jointly with lights furniture). you're also to leave residing house equipment which got here with the residing house as area of the acquisition fee, no matter if or not they're completely affixed.

Answer 9

thjey cannot take away your home if you are made bankrupt, in fact they cant take away things that you need to live. If you are made bankrupt, all debta are gone, you owe nothing to anyone, so no-one can send debt collectors round either.

Answer 10

if you go bankrupt you wil lose the house.

and how is the house in your name if it is your mothers ??