There is no timescale, daisy daisy. You should speak to whoever is dealing with your bankruptcy and advise them. They should deal with the secured lender to arrange the mechanics of the property being sold.

Hi Kevin so that means I can dispose of property any time within the 3 years of bankrupsy? Thank you

You can dispose of property any time you like Daisy Daisy, the only difference is that whilst you are bankrupt then your trustee has to have some involvement too.

Hi Kevin thanks for that. Can you give an outline of what my IP will have to do? Thank you

I take it there is likely to be a shortfall owed to the secured lender?

It would need to be sorted out as to who would be responsible for supervising the marketing and sale of the property. Often the secured lender will take possession and do this themselves, given that they are the ones that will suffer from any shortfall.

If the secured lender wishes to make a claim for any shortfall in the sequestration then they would either have to sell the property first and then claim for the amount of the shortfall, or they could value their security and make a claim for the projected shortfall based on that valuation.

There is a common misconception that if the property is not sold until after the bankruptcy period has ended then you would be liable for any shortfall. This is not the case - while the secured lender still has a right to enforce their security after discharge (ie sell the property and pay the proceeds towards the debt they are owed), they are not entitled to seek to recover any shortfall that might arise from doing so.

Sorry if that is getting a bit technical. Hopefully it makes some sense!

Is it really the borrower's decision if and when to 'hand back' a property?
Is there any possibility of a lender refusing to sell because of perceived shortfall, or even the trustee refusing to sell if there is only a small amount of equity-say ?é£500-?é£2000?

Hi, yes basically the decision is yours, unless you stop paying the mortgage and it is repossessed first.

Hi thanks Kevin and Shona for your comments. The lender is owed 142K. It's a newbuild, the housebuilder went into liquidation and the properties left to sell are being marketed at 128K. So more than likely a shortfall which l would not be liable for?
Thanks

That's right Daisy Daisy

Hi Kevin so I would not be responsible for any shortfall when the property is sold as long as I put the property in to the bankrupsy within the 3 year period? Thanks

Hi Daisy Daisy.

I think that this automatically became the case when you became bankrupt.

Hopefully one of the experts can confirm.

Technically, even if the property was sold after the end of the bankruptcy period then you would not be responsible for any shortfall, as long as you have not remortgaged since going bankrupt.

It is only the mortgage lender's security that is not discharged at the end of a bankruptcy, not the debt itself. So they still have the right to repossess and sell the property if you do not pay, but they would not be able to enforce payment of any shortfall.