investment properties

midlandlady

I have 5 investment properties. Because of various circumstances I am in arrears of 4+ months and the mortgage lenders are soon to start repossesion proceedings. I am going to be filing for bankruptcy soon. One mortgage lender just told me if they repossess and sell the property at a loss (which is highly likely) even if I file for bankruptcy they can still chase me for 6 years for any losses they make on the sale of the property, is this true? I thought filing for bankruptcy would protect me against this

fermi

midlandlady wrote: »

One mortgage lender just told me if they repossess and sell the property at a loss (which is highly likely) even if I file for bankruptcy they can still chase me for 6 years for any losses they make on the sale of the property, is this true? I thought filing for bankruptcy would protect me against this

That is rubbish.

As long as you don't sign anything to state that you remain liable for any shortfall, then they will be included in the bankruptcy.

midlandlady

wow fast reply, thanks I did say that to the "jobsworth" on the phone but he insisted I was wrong and he was right, he said bankruptcy would not protect me. thanks for your fast reply

midlandlady

#3 of course I have concern for my tenants, they are all on long leases and will not be turfed out. I however am losing everything I have worked hard for for almost 40 years including the roof over my own head due to an accident and a broken back causing me to lose my business. sdooley maybe you should find out circumstances before being so accusing. NO ONE wants to file for bankruptcy, tenants are my concern but my own wellbeing is paramount, if that is guilty and unconcerned well so be it.

I dont intend to file for bankruptcy until they have repossessed.

fermi

midlandlady wrote: »

wow fast reply, thanks I did say that to the "jobsworth" on the phone but he insisted I was wrong and he was right, he said bankruptcy would not protect me. thanks for your fast reply

If you go bankrupt after the sales the shortfalls are included by default.

This question comes up time and time again for people who are worried that if their house is repossessed after they go bankrupt they will be liable for the shortfall.

That is not the case.

While the shortfall may not be realised until after the bankruptcy, your legal liability for it is a liability that was incurred before the bankruptcy. Therefore it is a liability that is released upon your discharge from bankruptcy even if the properties are sold afterwards.

peachyprice

sdooley wrote: »

To answer your question - If you declare bankruptcy now and they repossess afterwards, they will still be able to go after you for the shortfall. If once everyone has repossessed and sued you for the shortfall you declare bankruptcy the banks will be unsecured creditors in your estate. That will get you out of being pursued (beyond what you have) but it is open to the court to keep your bankruptcy open for more than 1 year in certain circumstances.

Not true, the debts exist pre-bankrutcy, therefore even if repossession takes place after bankruptcy all shortfalls will be included.

Bankruptcy only lasts 12 months, regardless of any property involved.

gone_awol

sdooley wrote: »

I am so sympathetic for you. You sound so responsible and you've got yourself in this mess through no fault of your own. I agree that you should be able to walk away without making any further payments and without a blemish on your name.

Sorry for the sarcasm but it looks like you have no concern or guilt for the people who will lose out if you take the course of action you propose - maybe I can understand not being too worried about the banks but your tenants being turfed out by the banks or the neighbours who have to live next to abandoned properties.

Sdooley.....It's getting tiring having to defend ourselves against self-righteous, judgemental, ill-informed people like you. Do you want everyone to pour out their story just so you can decide who is worthy?.....who made you God? This forum is for both practical and emotional support for people going through probably one of the most traumatic experiences of their lives.
Please go away.

Midlandlady - best of luck with everything. Ask away and try and ignore the idiot troll people.

fiveyearplan

Midlandlady - don't worry, as has been said it doesn't matter when you go BR, the shortfall will be included. Be sure you list all of them on your BR forms.

midlandlady

Thank you all who have given me correct information. I was advised by someone to join this forum for all the help MOST kind people give. Having only joined today and within 10 minutes of posting my question I got the reply and "telling off" from sdooley. I began to wonder if I had done the right thing in joining afterall this is an extremely stressful time for me as it is for everyone in a similar situation. My faith has been restored in the replies and the "telling off" in return to sdooley for his/her reply. The sarcasm was uncalled for and also the advice was incorrect. I will keep logging in over the next weeks prior to my bankruptcy for any help I may need, thank you all

Cannon_Fodder

Not wishing to re-run the criticism that was offered, it being deleted I don't have the whole picture, so bear with me...

If totally sarcastic/judgemental, fair enough thats unhelpful, take it somewhere else, etc...


However, this forum being about advice and opinion on similar experiences etc, it is I believe fair to ask a few questions, like;

- this was a business, why did the business not provide Keyworker (or similar) insurance.

- was there no healthcare package, Permanent Health Insurance, or somesuch?


It does appear that lots of "little businesses" think they can make money by "jumping on the BTL bandwagon", and while it can I think it good advice, for the next one who reads the forum, who might otherwise jump in with both feet, to say;

"hang on a minute...have you set aside funds for some voids?"
"have you set aside funds, as though employed in a large company, to cover sickness/illness etc?"
"have you developed relationships with other Landlords, so you can cover for each other in difficult times?"

etc...probably a dozen other thoughts that people can add...

There would probably be some tax perks from setting up policies thru the company instead of personally.


Maybe, just maybe, individuals would not find themselves in the awful situation of losing a business, if they identified ALL costs and extracted them from the profits on offer, rather than take the profits and spend them, with nothing for a rainy day.

gone_awol

Cannon_Fodder wrote: »

Not wishing to re-run the criticism that was offered, it being deleted I don't have the whole picture, so bear with me...

If totally sarcastic/judgemental, fair enough thats unhelpful, take it somewhere else, etc...


However, this forum being about advice and opinion on similar experiences etc, it is I believe fair to ask a few questions, like;

- this was a business, why did the business not provide Keyworker (or similar) insurance.

- was there no healthcare package, Permanent Health Insurance, or somesuch?


It does appear that lots of "little businesses" think they can make money by "jumping on the BTL bandwagon", and while it can I think it good advice, for the next one who reads the forum, who might otherwise jump in with both feet, to say;

"hang on a minute...have you set aside funds for some voids?"
"have you set aside funds, as though employed in a large company, to cover sickness/illness etc?"
"have you developed relationships with other Landlords, so you can cover for each other in difficult times?"

etc...probably a dozen other thoughts that people can add...

There would probably be some tax perks from setting up policies thru the company instead of personally.


Maybe, just maybe, individuals would not find themselves in the awful situation of losing a business, if they identified ALL costs and extracted them from the profits on offer, rather than take the profits and spend them, with nothing for a rainy day.

All very interesting but rather like closing the door after the horse has bolted, and I hardly think people read this forum for business startup advice!!

Rather than hijack someone else's thread, why don't you start your own thread "Things I wish I done when I started my business?" or "Things I've learned from going BR" - that might be helpful. Or I'm sure there are other small business forums where your wisdom will be welcomed.