Can a house sale be forced?

HEADACHE

Hi to all the good people on here.Im in BR and the only stumbling block is my house.My Trustee has calculated,based on a house valuation that there will be no proceeds from selling my house to any creditors after all the OR,DTI,agents fees etc etc.
Seeing as the creditors will not benefit from a house sale,will the trustee proceed? House prices are falling and i'm wondering if there are any legal precedents for something like this? I have no 3rd parties to buy the equity but if sold,the equity would be eaten up by all the vultcher fees! can anyone help? many thanks in advance:T

skylight

I wouldn't have thought so. There is not enough equity to give to any creditors, so as long as you are keeping up with the mortgage payments (and can continue to do so) then I think that you are all AOK with the property.

I would suggest calling your OR just to clarify what that means though, for peace of mind.

peachyprice

If the trustee had deemed there to be not enough equity to sell the house you should now be able to buy the BI for £1, plus £211 fees.

If you opt not to buy the BI the trustee will probably hang it out for the full 3 years he's allowed, incase the property market changes.

rog2

I agree with what has been said, and would strongly advise you to 'purchase' the BI for the nominal £1 + £211 costs as peachy suggests.
If not, then the OR can re-assess your BI at any stage during the 3 years.

HEADACHE

I really appreciate everyones comments and replies.
The problem is that the property is worth £125,000,the mortgage is £113,000 so the equity amount is very roughly £12,000 but this will be soaked up by OR/Trustee/Estate Agent/Legal and DTI fees,leaving nothing for the creditors.
Technically there is equity but nothing for creditors,only the OR/estate agent/legal fees etc.
Can a sale be forced? would a judge in law see it differently? BR is all about a return for creditors but in this situation there is nothing after all the vulchers have been paid??
Is the equity worth only a £1?

tigerfeet2006

If there is money there even if it is to only pay themselves then they will most likely want to sell it.

Do you live alone or is it a joint mortgage? If joint your BI is £6000 but with a bit of haggling you may be able to get this down. So potentially someone could buy youe BI for £5000 more or less.

Have you had a valueation done at all or is this the OR's valueation? If you haven't I would consider asking a few estate agents round to value it for a quick sale. You neaver know what sort of price may come up especially in the current climate.

HEADACHE

Hi Tigerfeet,I agree with you,my biggest fear is that they can sell it and pay themselves with sod all regard for me or the creditors.
The Trustee valued it,over 2 months ago,and the valuer was basing his pricing on houses which sold in March/April which meant they would have been agreed last Nov/Dec.
I live alone and am very worried about it,I have no one to buy equity and day to day I live in a feeling of insecurity waking in the middle of the night and in fear of my post.Can I buy the equity myself? if its negligble? say £1,000?

tigerfeet2006

Get ringing those estate agencies and get some realistic prices that are current so you are armed.

Where would you find that sort of money from . This is what the OR would ask.

I am afraid the OR always gets paid first when there is assetts to deal with.

rog2

HEADACHE wrote: »

Can a sale be forced? would a judge in law see it differently? BR is all about a return for creditors but in this situation there is nothing after all the vulchers have been paid??
Is the equity worth only a £1?

HEADACHE - I have just gone through the 'BI' scenario, but in my case there was considerable equity. A Trustee/OR will, in the first instance, offer you the chance to 'buy back' your BI in the property - this could be you, your wife/partner or a close relative or trusted friend. On completion of any such 'transaction' the Trustee/OR will no longer have any vested interest in your house.
Your trustee has, already, told you that there will be little, or no, proceeds for your creditors, after the sale of your house, although he still 'retains' his vested interest in any potential BI. Whilst, at the moment, there is little, or no BI, who can predict what the case will be in 2 - 3 years time? I appreciate that the housing market is in decline at the moment, but it can change without warning, and values could rise very quickly, as has been shown in the past.
The £1 'nominal' fee, quoted, is usually payable when it has been established, and agree, that there is no advantage for the Trustee/OR to 'force a sale through the courts', although this will depend on your Trustee. Your Trustee should have written to you, offering you the chance to buy back your BI at whatever he has calculated your BI to be. If, as appears to be the case, he has calculated your BI to be zero, then you can offer to buy back that BI at a nominal fee of £1, plus the conveyancing costs - the £211, quoted, is a special price that the Insolvency Service have negociated and charge, although not all Trustees use that figure - in some cases it can be considerably more - so it all depends on what your trustee has told you.
As tf says, you do not have to accept his evaluation - you can get up to three independent evaluations and use the lowest, but if the Trustee is saying that, effectively, there is no BI then I would not question his evaluation.
Yes - a Trustee CAN 'force the sale through the courts' but, generally, would only do so as a last resort, again providing that he feels that there is sufficient equity to cover the costs.
It seems, and please forgive me if I am wrong, that your Trustee has not yet made you an offer to buy back your BI. Perhaps it would be worth asking him?

HEADACHE

Hi Rog2-Thanks for your reply.The Trustee has calculated that the equity is £12,000 based on the valuation a few months ago and has offered me to buy the equity for £12,000.If the property was sold then this equity would be spent on all the DTI/OR/Trustee/legal/estate agent fees so would therefore leave nowt for creditors.If I won £13k on the lottery for instance,can I buy this equity myself? or given that there is no equity for creditors,do I have any defence against the Trustee forcing a sale?I beleive,on current house prices the equity would be about £7k maximum,which again,still leaves nothing for the creditors.Any advice? I have no 3rd parties to buy this equity,i am on my own.

rog2

HEADACHE wrote: »

Hi Rog2-Thanks for your reply.The Trustee has calculated that the equity is £12,000 based on the valuation a few months ago and has offered me to buy the equity for £12,000.If the property was sold then this equity would be spent on all the DTI/OR/Trustee/legal/estate agent fees so would therefore leave nowt for creditors.If I won £13k on the lottery for instance,can I buy this equity myself? or given that there is no equity for creditors,do I have any defence against the Trustee forcing a sale?I beleive,on current house prices the equity would be about £7k maximum,which again,still leaves nothing for the creditors.Any advice? I have no 3rd parties to buy this equity,i am on my own.

Hi Headache (nice username :rotfl: :rotfl: )

You are going to have to look at your options, seeing as the OR/Trustee does have the right to 'force a sale' even though none of the money would find its way to your creditors - but that is a legally irrelevant fact to the bankrupt.

So what can you do?

1. You can query the Trustee's evaluation - already explained above.

2. You can negociate with the Trustee - we negociated a 'substantial' reduction on my BI.

3. Being bankrupt does not preclude you from going to your mortgage lender to see if you can increase your mortgage in order to buy back your BI. You would have to tell the mortgage lender that you are bankrupt and he may apply certain conditions. You could, also, approach other mortgage lenders, again you would have to inform them that you are bankrupt, and are unlikely to get the most favourable interest rate.

Certainly, if you wish to keep your house, you should start discussing the situation with your trustee - nothing is going to happen overnight (we were given 12 months from first offering to buy my BI and, in the event, it took almost 18 months). I would, certainly, tell your trustee that you are looking at the possibilty of buying back your BI and start getting some independent valuations.