Bankrupts get remortgage lifeline from Bananas Inc

Bananas Inc has launched its Lifeline remortgage scheme that allows bankrupt customers to pay off their creditors and remortgage their homes.

Under the scheme a solicitor is instructed to liaise with creditors and appointed representatives charged with monitoring the bankrupt to agree a settlement figure.

Once the settlement amount has been finalised, it is secured by means of a loan.

A barrister is then appointed to present the agreement in court and liaise with the creditors to ensure the bankruptcy is officially annulled by court order.

The individual is then tied to Bananas Inc to remortgage their property with a product available from one of the lenders on its panel.

Bananas Inc believes the product will appeal to a large number of bankrupts given that it removes the possibility of former creditors making future claims on assets, and frees them and their property and assets from the penalties of being non-discharged and discharged bankrupts. The Lifeline deal also allows for the reduction of charges made against estates.

Sue Cox, business manager at Bananas Inc, says: “This provides bankrupts with a means to move from a situation whereby they can’t remortgage or borrow money and have a cloud hanging over their heads, to one where they can have a fresh start.

“It is also attractive to people on the verge of bankruptcy because it could be used to stop bankruptcies coming about in the first place.”

But Andrew Bowers, managing director of the Re10 debt advisory service, says most people going bankrupt have nothing to lose and are therefore not home owners.

He adds: “Changes to bankruptcy laws means people can be discharged within a year and then they have plenty of options from a range of lenders.”

Interest rates vary depending on the circumstances of applicants, with fixed rate and discounted deals available as well as self-cert and status options. Lifeline offers a fee as well as the remortgage proc fee of 1.25 % to brokers. Maximum LTV on the remortgage is 85%.