Warning-Your Home May Be at Risk if You Fail to Pay Even On Un-Secured Debts

shinyhead

Nige,
Technically yes as they may wait until you do have equity and then go back to the court to force a sale.
Could be a good argument to give the judge against the award of a CO though.

Thoughts: I wonder what could happen going BR with no equity in your house and depressing house prices. Would the OR wait until equity is available, even if this could be several years after the order?

If you have no equity and the house is in joint names, what's the likely value of any beneficial interest in the property you may have that the other joint owner can buy out? Could it be pennies? Anyone know?

Reason I ask is that as some have mentioned BR on this thread would it become a viable option for some once this comes into force?

Sagaris

Signed - will get OH to sign when he's back from work.

blind-as-a-bat_2

shinyhead wrote: »

Nige,
Technically yes as they may wait until you do have equity and then go back to the court to force a sale.
Could be a good argument to give the judge against the award of a CO though.

Thoughts: I wonder what could happen going BR with no equity in your house and depressing house prices. Would the OR wait until equity is available, even if this could be several years after the order?

If you have no equity and the house is in joint names, what's the likely value of any beneficial interest in the property you may have that the other joint owner can buy out? Could it be pennies? Anyone know?

Reason I ask is that as some have mentioned BR on this thread would it become a viable option for some once this comes into force?

if you have little or no equity then in almost all cases I have seen the bankrupt has been allowed to keep the house by buying the beneficial interest back of the official receiver for a token £1 payment + costs (about £220).

Assuming you are up to date with your payments (or have reached an agreemant with the lender if you are in arrears) and can afford the payments on the mortgage of course.

If you have any secured loans on the property, that will complicate matters as well as those will still remain if you keep the property

The only exception to this is where the cost of the mortgage (and secured loan payments) has been considerably higher than the rent of an equivalent property (or more suitable where the mortgaged property exceeds the needs of the bankrupt and there family) In such cases (and I have only seen a couple) I have seen the official receiver try to disallow the mortgage payment and only allow the equivalent rental, thus freeing up money to be paid to an IPA. Not sure if any official receiver has succeed in doing that yet as though as those where still under contention so not decided yet.

Once a charging order has been made however it seems that debt is no longer written of in bankruptcy and treated just as any other secured loan, so yes if you have no equity or any other assets of value, such as an expensive car, I would say bankruptcy would be worth considering if the situation is right regarding the equity on your property as it would actually protect your property as long as it was before an order was made.

It also frees you from all other unsecured debts at the same time, but there are other complications if you where to choose bankruptcy so it is not a decision to take lightly, and something you should research fully, to see how it may impact your life in the future.

Small_elf

Just signed. its now showing 182 signed!!

shinyhead

Thanks BAAB. I realise going BR is not to be taken lightly and there will be consequences but this new change to the law seems to make BR a better option than a long-term DMP, for example.

Also it could mean that creditors in the longer term could get nothing as opposed to the something when on a IVA/DMP.

blind-as-a-bat_2

shinyhead wrote: »

Thanks BAAB. I realise going BR is not to be taken lightly and there will be consequences but this new change to the law seems to make BR a better option than a long-term DMP, for example.

Also it could mean that creditors in the longer term could get nothing as opposed to the something when on a IVA/DMP.

It would depend on your surplus income after BR and how much a subsequent IPA may be for 36 months if it applied, but in most cases they just cover the IS's admin fees so yes the creditors are less likely to get much, if anything

peachyprice

shinyhead wrote: »

Thoughts: I wonder what could happen going BR with no equity in your house and depressing house prices. Would the OR wait until equity is available, even if this could be several years after the order?

The OR has a maximum of 3 years to take a house, after this time it reverts back to the owner and the OR has no legal claim to any equity.

With a CO there is no such time limit, so they can just bide their time until the market improves.

HTH

(signed yesterday!)

Hopeful1

Signature total is 184 now.

It concerns me that possible legislation like this doesn't seem to be a surprising anymore. We are being led by someone who wasn't chosen by the citizens of this country. With everyday it seems the views of the ordinary people in this country count for nothing.

Rabbit-in-headlights

195 names there now - come on everyone, let's get it to the magic 200 tonight!!

Now Gordon has said if he can only make the life of one person better, he'll be happy :mad: :mad: - %$&^%&%^%£$ :eek: :eek: (if you know what I mean!:rotfl: :rotfl:


Rabbit

shinyhead

Thanks for the replies, I know that there would be complications as mentioned before but perhaps if we are going to contact our MP's on this then we should shout the fact that this will probably make BR a better option to more people, with the resulting consequences on the already fragile property market, plus the fact that the changes in the law seem to have quite a possibility of backfiring on the people who wanted them.