Ex and I are due to sign a Clean BreakConsent Order and to hand back the keys on our FMH. We both went bankrupt in 2010 - me in response to HMI making him bankrupt (I could see what was going to land on my doorstep.)
We are both discharged but I included the house and related debts in my bankruptcy. No equity in the property, so it''s cheaper just to hand back the house.
Will we get asked to contribute to the sale or short fall? And should my solicitor or the Official Receiver deal with this?
I think it''ll be ok, but this is the last stage. Oh and there is a suspended possession order on the house. What a wonderful marriage we had!
My understanding is that secured debts, such as a mortgage, are not included in a bankruptcy, so even when you hand the keys back, if there is a shortfall when the house is sold by the lender, you will still both be liable for that debt.
Mortgages typically include terms which say that any costs (including legal fees, late charges etc) are added to the mortgage debt so this would mean that any costs of selling the property will be added to the amount owed on the mortgage and will form part of the shortfall.
I would recommend that you speak to someone such as CCCS (debt charity) or Shelter to confirm this.
You may find it would be better for you & your ex to sell the property yourselves, as you can make sure it is attractively presented which may mean you can achieve a better privce and keep the shortfall as low as possible.