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Land to sell - can we still go bankrupt?
Hi - hope I'm putting this in the right section - apologies if not and please advise where would be better.
My husband and I are in a lot of debt (�30,000 usecured) have a 120% interest only mortgage of �220,000 and are struggling hugely. We have never missed any payments whatsoever and have fought and fought to keep our heads above water but the pressure is becomming immense.
We have a quarter share in some land with planning permission for 9 houses that was left to my husband ad his three sisters by his father in his will.
The land has been up for sale for a year - we had one offer that was accepted but then the builder was unable to get the funds. It looks as though it's going to be a long wait until the land finally sells. The sale would wipe out our debts.
If the worst came to the worst - could we go bankrupt whilst having shares in this land? The land is already on the market for well below the value so I'm not sure where we stand.
Any advice very gratefully received.
Many thanks
My husband and I are in a lot of debt (�30,000 usecured) have a 120% interest only mortgage of �220,000 and are struggling hugely. We have never missed any payments whatsoever and have fought and fought to keep our heads above water but the pressure is becomming immense.
We have a quarter share in some land with planning permission for 9 houses that was left to my husband ad his three sisters by his father in his will.
The land has been up for sale for a year - we had one offer that was accepted but then the builder was unable to get the funds. It looks as though it's going to be a long wait until the land finally sells. The sale would wipe out our debts.
If the worst came to the worst - could we go bankrupt whilst having shares in this land? The land is already on the market for well below the value so I'm not sure where we stand.
Any advice very gratefully received.
Many thanks
Answers
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If you go bankrupt the whole of your assets will be sold off against your owings. Although there will be nothing owed, at the same time you will have nowhere to live and nothing to use as a deposit for a rental. You would be better to talk to citizens advice who will be able to help you. It will be in the interests of the creditors to cooperate because if you go bankrupt they won't get everything they are owed.
120% mortgage - does that mean 120% of the value of the property now, or of the value when you took out the mortgage (which was probably higher)?
Do you want to keep the house, or are you willing to move and rent? If the latter, it is best to move before going bankrupt - get whatever funds you need by stopping paying the creditors (including the mortgage lender if necessary).
You certainly can go bankrupt while you still own the land, but the Official Receiver would take over your interest in it and the proceeds (when it sells) would go to his costs & then to the creditors. The OR's costs in bankruptcy are high and - if there are assets such as your land - will be paid from the proceeds before the creditors get any money.
If you want to avoid bankruptcy, you should certainly try to come to a payment arrangement with the unsecured creditors.
As suggested, ask to see a money adviser at the CAB. Alternatively, contact CCCS (see their website).
Do you want to keep the house, or are you willing to move and rent? If the latter, it is best to move before going bankrupt - get whatever funds you need by stopping paying the creditors (including the mortgage lender if necessary).
You certainly can go bankrupt while you still own the land, but the Official Receiver would take over your interest in it and the proceeds (when it sells) would go to his costs & then to the creditors. The OR's costs in bankruptcy are high and - if there are assets such as your land - will be paid from the proceeds before the creditors get any money.
If you want to avoid bankruptcy, you should certainly try to come to a payment arrangement with the unsecured creditors.
As suggested, ask to see a money adviser at the CAB. Alternatively, contact CCCS (see their website).
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