Been told Bankrupcy is the only option - How to keep our home? Beneficial Interest???

liferenewed

Hello folks,

Its been a while since I last posted on the forum and to be honest our situation has gone from bad to worse.

The work I had lined up did not materlialise, we have run out of savings and have had to cancel all our DD's with the unsecured creditors.

We have spoken with the CCCS and submitted our SOA and been told that the best option for us (really the only option) is to go bankrupt. This scares the hell out of us, but we are trying are best to accept that this might be the case.

Our biggest fear is loosing our home. We will struggle to keep it, but family have offered to help and for the sake of our children we want to try to offer them some security and their home is about all they currently have.

Bankrupcy is not something we are taking lightly, but I can cope with the shame if it takes the pressue off us that we have been under this last few years. Both my wife and I are starting to suffer physically with the stress and while usually I wouldnt complain if I lost a few pounds in weight, losing 1.5 stones in two months and my wife lossing 2 stones in the same period isnt healthy!

My initial estimates on the house value are probably way off the mark, but I had said £210k with £30k equity. This was on the basis of us putting in a £20k deposit at purchase. However, there are several properties on our development for sale, some at this lower end of the market and even they are struggling to get offers.

Having read through some other posts about Beneficial Interest, I am struggling to come to an understanding of the subject. What I have gleaned is that we are best to get 3 valuations, my thoughts being one from a reputable local agent, one from a property auction house and one from a big company who specialise in quick house sales. The first may try and bump the price up to get my business, but the last two should be realists when it comes to what the house is worth, to guarantee a sale.

My questions are this to those good people who have a better understanding of this than I do:

1. Is it guaranteed that if we go bankrupt we will be offered the BI?

2. Is it guaranteed that if we go bankrupt and our house has little or negative equity, will we be offered the BI?

3. Because both my wife and I will be going Bankrupt, are we able to buy the BI?

4. What process do we have to go through from today onwards if we are choosing bankrupcy in order to put our affairs in order and try and secure our home from not being sold out from under us?

5. We had to put in a £20k deposit at purchase (10%) to satisfy the lender, but to get out of the property deal today we are in today we would have to repay £8k, plus sales fees, plus legals. Would this be enough to satisfy the OR to make us sell the house?

Ive read that the OR can hold onto the BI for 3 years if they feel they may be able to sell the house for more money at some stage. My fear is that, even with all the confusion with house prices going up and down, there is alot of press about the later part of 09 being a time of growth in the property market and for the first time in my life I am actually praying for a terrible valuation!

Will the OR take this into account when deciding if he should offer us the BI?

Sorry for all the questions folks, this has happened very quickly and to be honest if its inevitable I want to get it done as quickly as possible.

Lastly, from where I am today, how long should I expect the BR process to take until I am declared BR?

Thanks again for all your good help and advice.

peachyprice

liferenewed wrote: »

1. Is it guaranteed that if we go bankrupt we will be offered the BI? Unfortunately no, there is no guarantee, although the OR would usually prefer to let someone buy the BI than be saddled with a house to sell.

2. Is it guaranteed that if we go bankrupt and our house has little or negative equity, will we be offered the BI? No, again no guarantee, the OR might bide his time for the 3 years.

3. Because both my wife and I will be going Bankrupt, are we able to buy the BI? No, someone else, i.e family member, close friend will have to.

4. What process do we have to go through from today onwards if we are choosing bankrupcy in order to put our affairs in order and try and secure our home from not being sold out from under us? Not sure what you mean? You cannot sign it over to anyone else if you were thinking of that.

5. We had to put in a £20k deposit at purchase (10%) to satisfy the lender, but to get out of the property deal today we are in today we would have to repay £8k, plus sales fees, plus legals. Would this be enough to satisfy the OR to make us sell the house? If it wiped out the equity, yes, if there was still enough equity after these charges, no.

Ive read that the OR can hold onto the BI for 3 years if they feel they may be able to sell the house for more money at some stage. My fear is that, even with all the confusion with house prices going up and down, there is alot of press about the later part of 09 being a time of growth in the property market and for the first time in my life I am actually praying for a terrible valuation!

Will the OR take this into account when deciding if he should offer us the BI? That's anyones guess, all OR's work in different ways.

Sorry for all the questions folks, this has happened very quickly and to be honest if its inevitable I want to get it done as quickly as possible.

Lastly, from where I am today, how long should I expect the BR process to take until I am declared BR? Anywhere from a few days to a few months. You need to phone your local County Court and ask which system they operate, some you can just turn up, some you need an appointment. As soon as you have the forms filled and the £495 each you can go BR.

Thanks again for all your good help and advice.

Hope this helps some, unfortunately there are no guarantees as far as houses are concerned, it's a bit of a gamble. However, you don't need to go to auctioneers or places that sell houses on the quick for a valuation , just get 3 estate agents to give you a realistic price for a quick sale.

liferenewed

Hi Peachy,

Thanks for your reply.

We could try and struggle on and pay the £1 per month token offers to creditors, but that makes no sense to me, its almost putting off the inevitable.

In most cases, does the OR offer the BI if the house is in Negative or little equity or do some of them like to speculate on rising prices?

Thanks again

badgermum

your situation is scarily similar to ours OH is just getting the ball rolling for bankrupcy has been told the wait is 3-4 weeks instead of the usual 3-4 days due to sheer volume of cases, my name is not on the deeds to our house but we had a joint overdraft £10k which a debt collection agency are chasing so I can't buy the beneficial inerest in our property, but we will try to find a relative to do this,
currently we are in negative equity our place is worth £300k and is mortgaged for £320 so we've been told that oddly enough thats good news for us.
OH has been runing a small construction business but needs to bring in £17k a month just to pay overheads all our debt has been run up trying to keep business afloat for the past 12 months, not on holidays and partying as the debt collection agencies like to believe!! we havn't had a holiday for five years, We have 3 children and are stressed to breaking point with the whole situation.

liferenewed

hi badgermum,

I know how you are feeling, we sent off all our £1 token gesture letters yesterday and it was very hard to finally admit that we cant survive doing what we were doing anymore.

Our home is the most important thing to us and we have had an offer of £165k from one of the buy your house in a week places, so thats not a bad thing (I think) They do undervalue deliberately, but even any agent who is being realistic will know that they wont be able to achieve much more than that for a quick sale.

Good luck to you and your family and take care of each other.

mazzatee

Hi Liferenewed

As other posters have said there is nothing definite about housing. However generally speaking if there is less than £1K equity or no equity at all then family/friend may be able to buy out BI.

I also understand that whilst ORs have up to 3 years to deal with property they dont always exercise this right nowadays particularly with the increased number of bankruptcies as they dont have the time to track them! Most of the time they will try to deal with the house now.

You say you have been counselled by CCCS but did you know they have a support service for clients where bankruptcy is the best advice? Their number should be in the paperwork you have received.

RAS

Hi

When house prices were rising, it may have made sense for an OR to wait, but with the prices dropping, or likely to level out, they will not get more if they wait. It may be in your interest to wait to the end of the year to minimise the equity.

Another factor in the OR's decision is the relative cost of your mortgage against the cost of renting a similiar house?

badgermum

yes thats a good point our mortgage is just under £700 per month but to rent a 3 bed property (we have 3 kids , 4 at weekends!) would cost approx £900 where we live..