Does bankruptcy wipe all mortgage debt?

Take 2 examples

a. a single man with no family with secured and mortgage debt. if he is declared bancrupt will he be free of all debt including mortgage debt at the end of the bancrupcy provided he hands over all assets including his house? Can the secured debtor stop the mortgage being wiped in this way?

b. a man with a wife and children and secured and mortgage debt. the house is in his sole name but the family live there. the OA has to get court permission to sell family home. if the court doesnt allow the sale of the family home what happens to the mortgage debt at the end of the bancrupcy process?
Much appreciated if you can help with this one.
it just seems that if the mortgage debt remains unchanged at the end of the bancrupcy process then whats the point in entering it in the first place if the mortgage is where the problem lies - my own thoughts are maybe the person has to be willing to hand over all secured assets to OA if they are to be truly free on discharge.

The Official Assignee has to make an application to Court to obtain an Order for the sale of the family home. The Official Assignee will only make such an application if there is equity in the house.

The High Court is effectively obliged to give an Order allowing for the sale. However, the High Court will consider any particular family needs, such as children completing school etc. Whilst it may grant an Order for sale, it may place a "stay" on the Order to allow the family to organise themselves. Every case will be treated on its unique facts. The longest stay I have come across is 9 years, which was granted in order to allow the children to complete their education.

Obviously, the longer the "stay", the greater the opportunity for the debtor's finances to recover and be given an opportunity to buy the house back.

Jim Stafford

Many thanks Jim. Much appreciated.

Jim Stafford said:

The Official Assignee has to make an application to Court to obtain an Order for the sale of the family home. The Official Assignee will only make such an application if there is equity in the house.


Jim Stafford

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What happens if the house is in negative equity?