Mortgages Following Personal Bankruptcy
Personal bankruptcy can be declared when it is not possible to stay in control of personal debt. It is often a last resort when all other options have been ruled out and it involves the assets and possessions (with some exceptions) of the debtor being converted into cash where possible. They become property of the Official Receiver in Bankruptcy who is then legally responsible for using the money to pay off any creditors as far as possible.
Bankruptcy does enable the debtor to make a fresh start once the bankruptcy has been discharged but there are restrictions while the order is force and the fact that has been a past bankruptcy will always remain on record.
A property owned by a bankrupt will probably have to be sold and this could be enforced by a Court Order. However, if it is owned in joint names, their partner could offer to buy the bankrupt’s share of the property from the Official Receiver. If there is a partner or dependents living in the property, twelve months’ grace will be allowed for alternative accommodation to be arranged.
It could be easy for some lenders to take advantage of borrowers with past bankruptcies because they know that the loan options are limited. Sometimes these lenders will charge high fees, extensive pre-payment penalties on the home or ask for a fee upfront to "process" the loan.
However, fair deals on mortgages and re-mortgages are available for those with a history of credit problems or bankruptcies and our specialist mortgage advisers are experienced in finding the right mortgage for anyone in this situation. If you would like us to help you to find the best deal available for you or for help and advice, please use our Mortgage Enquiry Form below and one of our experts will contact you. Alternatively, you can give us a call on 0845 108 0505.
