Hello,

See is someone can clarify this doubt I have:

If someone has a mortgage with Northern Rock for, say, £100,000 to be paid over 20 years. It has already paid £20,000 of the capital of the morgage and Northern Rock happens to bankrupt and close business. What happens to this person's mortgage? Is mortgage owner free of this debt and save the remaining £80,000? Has the law got a saying on this?

I assume that if you owe money to a business, but the business, eventually, closes and stop trading, then you are lucky and don't pay that money back, do you?

Thanks a lot,

Fernando

Most likely your mortgage will be sold in the secondary market. I would guess that Northern Rock won't file for bankruptcy but will be acquired by another company, either way you will have to continue to pay your mortgage.

I'm certainly under the impression that if Northern Rock were to go bust, the loands and mortgages on their books would be simply sold on.

I have a small personal loan with Northern Rock, so I made sure I read about such a situation carefully in the various news reports coming out - and from these, I'm given every indication that I will be paying that loan off to completion, either to Northern Rock, or any other company that administrates the debt owed.

Hope that helps, and welcome to Finance Markets.