Sorry to hear about your problems. Are you absolutely sure that bankruptcy is the only route that you can take? There are other things such as administration orders, or just arranging lower repayments with your creditors can sometimes be enough to give you the break you need.(posted 8434 days ago)It is not necessarily the case that you will lose your home when you go bankrupt. Especially where there is a spouse who isn't bankrupt and for families with small children as well, you will get time to find somewhere else.
If you are wanting to sell your house, then you'll not normally be able to complete unless there are funds to pay everything off. If when your solicitor sends you a completion statement, there is minus figure, he'll ask you for the this balance before the completion takes place. The lender will not allow the mortgage to be redeemed unless the full amount is paid off. Where there is negative equity, sometimes a lender will come to an arrangement, but they don't seem keen to do this.
If you decide to make yourself bankrupt rather than a creditor doing it, then you'll have to pay a fee to the court to do it in the first place and then there'll be fees for the insolvency practitioner before the credtiors get anything.
If you do go bankrupt, you'll get a "trustee" or "insolvency practitioner" who'll look after your affairs. Anything that you have of value will be used to pay off your debts, property, endowment policies, savings etc. The trustee will then assess your requirements to live and give you an allowance. For example, if you were to get a job and earned £150 a week, the trustee might let you take £100 and use the £50 to pay creditors. Things required to run your home, such as bedding, utensils, cooker etc will stay with you.
Bankruptcy doesn't last forever, and after about 3 years or maybe sooner than that, you'll be released from bankruptcy and be able to start off with a clean slate. Of course, you'll still have to state that you were once bankrupt if you apply for a mortgage or credit.
Also, if you're likely to be due a large sum of money, say if a relative leaves you a legacy in their Will, then the insolvency practitioner can come after you and take that to pay creditors at some point in the future.
I would strongly suggest that you think very very carefully before going any further. You'll be able to get more information from www.insolvency.co.uk also.
If you want to write back privately with some more information, I might be able to point you in the right direction - as I said, sometimes you think bankruptcy is all thats left, but thats not always the case.
Pendle