Possible Bankruptcy But Have Property Portfolio??

Richard_S

maxmycardagain wrote: »

meant to ask what the status if of property when they are the stock of your business.

if i had a £20K van as a haulier the OR couldnt touch it as a "tool of the trade", but if i owned a house which was let out and i earned my living as a "lettings landlord" it seems the OR could take it and put me out of work....

Hi Max,

The "tools of a trade" are not the same as the assets of an investment company, and that's how the O.R would view a property portfolio; in the same way they would a business that traded in stocks, shares, bonds commodities etcetera.

Danny would be able to keep his van and tools for property maintenance, but not the investment side of his business; regardless of assets and liabilities or income and expenditure.

Regards

Rich

Addicted2Chocolate

I would avoid BR at all costs. In some cases the Trustee can collect the rent from the tenants. leaving you unable to pay the mortgage and the property being repossesed. I would read the chapter 31 technical manual that was posted very carefully. I think it mentions the steps the oR woudl take and when rents may be collected.

dannyboyracer

Fiveryearplan, I have posted before that the company whom i have lent from for the last project is very agressive, i have been told by a reliable source that they will want everything stright away should i hand the keys back and they wont think twice winding me up to get it... i battle to understand why cos they wouldnt get anything if they did but apparently thats what they will do?

I still have a good relationship with the company as i have done many projects with their help in recent years, they have been good in a way, the original facility was only for 6 months... im now about 3 months beyond that and theyve agreed to extend it another 6 months while i a) sell or b) remortgage.... only prob is will i sell within 6 months... i doubt it, and can i get a remortgage... again i doubt it as my credit file is a little screwed what with the recent missed payments.

At present there is still about £10k equity in the project but with a taking of £1750 and a debit of £4k a month its not long before im soon outside the £10k equity and getting further into neg equity. Each 6 months that goes by is another 15k ish loss... compund interest as well so it will only get worse as time goes on.

Any suggestions?

dannyboyracer

Q. How much has been wiped off the valuation of the properties in total in the last 9 months, and how much are the repayments VS the incomes? which is rising and which is falling?

I am a casualty of overvaluation, i was buying houses at say 150k and turning them into 300k houses within 8 weeks with a project cost of around 20k each. they were only getting valued at 300k due to their rental yield as they are mostly 6 bedder properties rented to students at £300 a room p/c/m. now that surveyors are not valuing on rental yields and have rather gone back to the quite rightly bricks and mortar value some 300k house which have a 250k mortgage on them are now battling to reach the 200k valuation mark so im quite heavily in neg equity as a result... please bear in mind that even with a 250k mortgage i still make in excess of 800 on some houses profit per month. i have 2 flats in the city centres, they obviously have dropped considerably and they are the ones that actually cost me 300 a month at the minute which is getting funded by those making profit.

In all i recon something in the region of 250k has been wiped of the valuations in the last 9 months.

dannyboyracer

Richard_S really has given me some sound advice of which im truely gratefull... he seems to have been in my position before hence prob knows the ropes quite well.

I have applied for an IVA tonight but i doubt it will go through, still you never know.... only 75% have to say yes on the day and i have proposed £950 a month. If you take my car out of the equation my total debts are in the region of £100k but some of those debts are joint... about 15k of them. @ £950 a month ill repay about £57k throughout the duration which is higher than the 40p in the £ ive been reading about as now the minimum banks are accepting?

Failing that im going to take Richards advice and battle it through with a DMP rather than BR... i dont think it will be such a hard slog, im quite good at making money and so long as im disciplined enough i recon i can repay it not to long after the 60months proposed with the IVA above... im just going to need to get my thinking cap on :-) Anyone need a jack of all trades for a little hoem DIY, gardening hell even escorting at this stage - HA HA

deedee_3

Danny who have you done the IVA application with?

The only ones that are recommended on the forum are CCCS and at a push Payplan. I hope it is not one of these IVA factories you see on the TV or in magazines.

Edited to say if you are going for an IVA get yourself on the IVA sub board for help and advice.

dannyboyracer

Is everyone in this world just trying to make a buck out of those with little if no money?? I got refered to a company called Begbies Traynor in Liverpool and have submitted the paperwork to them. What do CCCS do differently, ive already talked to the CCCS who have organised a DMP last week but i put it on hold until i decided what i wanted to do. They never said IVA would be an option?

maxmycardagain

Just a note.

An IVA shows online on the IS website (a public domain site) just like a BR does...and for longer!

dalip

With an IVA your property is still at risk, maybe thats why cccs reccomended a DMP rather than an IVA. As dee says get over to the IVA sub board.

My OH is doing a DMP with CCCS at the moment(first payment jan) and they have been very good,although the allowances are a lot less than in bc.Dx

blind-as-a-bat_2

Richard_S wrote: »

Hi Danny,

I've been reading your Thread with great interest, but unfortunately not had the chance to post anything that may be of assistance.

We had a complicated bankruptcy, and it did include property, leases and Ltd Co.'s but not specifically a portfolio of BTL properties. JCS has accurately outlined the situation should you declare, or be petitioned for bankruptcy, and you really should avoid that option if at all possible.

As you're obviously well aware, the odds are seriously stacked against you, in terms of lenders reluctant to lend, and falling asset values, but your only hope is to "tough this out" and keep going.

If you default on the rolling loan on your latest property the creditor has to prove that you're unable to satisfy your debts, that you're insolvent, and that you should be declared bankrupt. A Statutory Demand is a bluster that means nothing if it's not followed through, and if they serve you with a Petition for Bankruptcy, then go to Court and make an offer to the creditor; if it's reasonable the Judge will accept it, and the creditor can do nothing more unless you fail to abide by the offer you made.

The first time I faced bankruptcy I was 28yrs old, and I managed to avoid it, only to re-build a business and get caught out again with ambitions that exceeded the capital I had available. I've found it much harder this time, having been declared bankrupt, than I did the first time when I managed to avoid it, and my advice would be to carry on until you're dragged kicking and screaming into that Bankrupcy Court.

If you can reduce your expenditure to a bare minimum, and maximise your income by taking paid employment, or robbing a post office,:rolleyes::rolleyes: defrauding an insurance company, :rolleyes: :rolleyes:whatever it takes to balance your budget, then do it. You may well bounce back, and you are relatively young, but it'll be a long sluggish painful bounce if yougo the bankruptcy route.

Regards

Richard

The problem is that an aggressive (or stupid) creditor will see the BR petition through. And i think a judge will see dannyboyracer as insolvent

If the property's are in negative equity then there is no assett value to the portfolio, only the income from the rent, which is at presant less than the rolling intrest on the loan.



If you let the current project go that will leave you with a huge shortfall, as you said, that adds to your already sizeable personal debt, and i doubt the "agressive company" will stop piling intrest on so your going to have to secure a very good wage to cover all those.

So the question is, is there any market value in any of the propertys? If not your already insolvent, and a judge will rule as such im afraid.

So the only way to avoid BR is not to get petitioned for it BR in the first place, which from what you have said is out of your control unless you can get this agressive company paid off, as it sounds like they wont settle for anything else.

Dont fall into the trap of thinking logic has anything to do with it, just because you dont see how they will profit from making you BR makes no differance, they will still do it if that is there policy. Thats how RICH_S lost, because of one stupid creditor, who was actually owed less than his legal fees probebly ended up costing him to petition Richard_S for BR