mortgages for bankrupts repossessions and right to buy

FAQS | page 1 | page 2 | page 3 |

WILL I NEED A DEPOSIT?

The type of mortgage/re-mortgage that our brokers can obtain means that you will always need to have a deposit or certain amount of equity already in the property. If the property is jointly owned and only one of you is bankrupt then your partner's share may be sufficient deposit. Otherwise lenders are looking at between a 10% and 15% deposit.

I CURRENTLY RENT A PROPERTY BUT AM NOW LOOKING TO BUY. IS THAT POSSIBLE?

It is possible where you have obtained your discharge from bankruptcy and fulfilled the other lending criteria. In order to see if we can assist you contact Mortgages for Bankrupts for free advice on 0800 915 3950.

IS MY TRUSTEE IN BANKRUPTCY ENTITLED TO REPOSSESS MY HOUSE?

Although there are certain restrictions on the Trustee the answer in most cases is yes. The Trustee will normally wait twelve months from the date of the bankruptcy order before commencing any proceedings. Most Trustees will attempt to negotiate a settlement with you as this will save costs and maximise the return to creditors. However the fact that they are prepared to negotiate with you should not be taken as a sign of weakness. There are very few circumstances in which a court will not make an order for possession if ultimately a Trustee seeks an order from the court.

I WAS MADE BANKRUPT 12 MONTHS AGO AND HAVE NOW BEEN DISCHARGED. CAN THE TRUSTEE STILL REPOSSESS MY HOUSE?

The Trustee has three years from the date of the bankruptcy order in which to realise their interest in your house. It is irrelevant that you have been discharged. They only lose the right once the three year period has elapsed.

MY SPOUSE/PARTNER WAS NOT MADE BANKRUPT. THE HOUSE IS OWNED JOINTLY. WHAT IS HE/SHE ENTITLED TO?

Depending on the basis on which you own the property your spouse/partner retains their interest in it. In most cases, a jointly owned property is held as joint tenants in which case it is taken that you have a 50/50 split.

I WAS MADE BANKRUPT LAST WEEK, HOW QUICKLY WILL I GET MY DISCHARGE?

If you co-operate fully with the Official Receiver/Trustee and your discharge is not suspended, then you will receive an automatic discharge within twelve months. [If you have been made bankrupt previously then different rules apply].

As at the end of 2005, the Insolvency Service revealed that the average length of a bankruptcy was eight months. It should be noted that the Official Receiver does not inform you if you have obtained your discharge. You need to ask.