Can Anyone Give Me Some Advice???

toostressestooeat

HELLO this is my first post on the site as have been reading up all i can
basically am in debt of unsecured 50000, mortgage of 92000 and first plus loan secured on house of 60000. house valued at 145000 so am in neg equity
have managed so far to pay unsecured debt by borrowing for one to pay another and mortgage and loan are upto date but am now so stressed over this cant even eat without feeling sick. husband aware of situation and is worried more so because we have a 3 year old
does anyone know if we go bankrupt will we loose house?
not any equity in house so not sure what that does?
any advice greatly received
thanks

sparky25

Morning,

I, like you, have spent many an hour covering all aspects of bankruptcy.

My understanding is that if there is not any equity in your property, the official receiver will not try to sell your home. It is his job to realise your assets to pay off your debts, i.e. sell your house to get money back out of it. As there isn't any money available in it, he wont bother.

The official receiver has 3 years in which to sell your property to raise funds. But you also have the option of buying back the beneficial interest, i.e. any money that you would have made if you were to sell the house.

Basically, if you owe say £100,000 and your house is worth £90,000 he wont try to sell it. A judge would want your beneficial interest in the house to be worth at least £1000, i.e house worth £101,000 before he would give the official receiver the go ahead to sell.

In the meantime, should property prices start to rise and again, say your house became worth £105,000, your beneficial interest (the amount due to you after debt has been paidhas now become £5000. It would be at this point that the official receiver would ask if you were interested in acquiring that beneficial interest. Once you agree to buy back the beneficial interest (this is normally done by family or a friend), the interest in the property reverts back to you.

If, however, the property remains in negative equity and the official receiver is unable to get any money out of it during the 3 years, at the end of the 3 years, the property no longer forms part of your bankruptcy order and will become yours again.

There is an order that the Official Receiver can place on the house which can last for 12 years. It is therefore in your best interest to acquire the beneficial interest or discuss your intentions with the official receiver as soon as possible following the bankruptcy order.

I am in the same boat and am hoping on a wing and a prayer that my property remains in negative equity.

The official receiver usually prefers to sell any beneficial interest back to you just to save a lot of time with advertising the property, estate agent fees etc.

I am not a financial expert (wouldnt be in this boat if I were), I have just read a lot. Please dont take what I have said as gospel. Your best bet before going thru with banktruptcy would be to contact someone like CCCS or your local citizens advice bureau.

Good luck.

toostressestooeat

thanks for the advice
have visited cccs online and basically are saying bankruptcy only option
am checking out insolvency website for forms etc

robsimps53

im also in the same boat as you here and what sparky25 said is pritty much true. i have spoken to someone from the insolvency and asked a few questions about the benefical interest, they did say that The OR can offer to sell the benefical interest after only 3 months and when this is done you should be protected from having your house taken from you and the 3year period they normaly give would not apply

this all depends on the OR and amount of debt you have, they may see that you house may gain some equity in the future and come back to you within the 3 years where they will then offer to sell the BI to which is normaly half the equity Plus £211 solicter fees

as it stands now, with negative equity you would only Pay £1 plus the £211

hope this helps

rob

nervousmother

toostressestooeat wrote: »

HELLO this is my first post on the site as have been reading up all i can
basically am in debt of unsecured 50000, mortgage of 92000 and first plus loan secured on house of 60000. house valued at 145000 so am in neg equity
have managed so far to pay unsecured debt by borrowing for one to pay another and mortgage and loan are upto date but am now so stressed over this cant even eat without feeling sick. husband aware of situation and is worried more so because we have a 3 year old
does anyone know if we go bankrupt will we loose house?
not any equity in house so not sure what that does?
any advice greatly received
thanks

you would still have to pay the mortgage and the 60k loan that is secured on it though, if you dedided to keep the property that is. It would only be the unsecured debts that would be wiped out.

Scarlett.1974

Something else to bare in mind is how much are the costs of your mortgage and SL in relation to similar rental properties in your area? If they're VERY much higher then the OR might not be happy to let you continue paying those costs when renting would be cheaper.

I would strongly advise you call CCCS and speak to someone there if you haven't already

sparky25

Does anybody know what the threshold on is from an OR's point of view and what considerations they would give as to where you rent.

As I stated in another post, I have 3 children who due to their ages, all attend different schools.

My mortgage and secured debt would cost me £1204 per month. Renting can be anywhere from £900 to £2000 where I live. Basically, if I go bankrupt to throw the towel in to include house as well, I would look to rent somewhere near my youngest's school. This makes rental about £1100 per month.

If push comes to shove, I would have to make my 11 year old get a bus to and from school (2 buses actually) if I had to rent cheaper. This in turn hopefully means I could keep my car as my 8 year old would not be using public transport.

Wouly my reasons for renting at £1100 to be nearer schools be justified to the OR. I should explain I work evenings and my mum stays during the week to look after the kids. In order to arrive at work on time, I need to be able to collect my youngest from school and it would be helpful if he could be walked home by my mum.

Any suggestions.....still playing with the idea of trying to keep my house!

mazzatee

Hi too stress

My understanding is that whilst they can come back for up to 3 years, they usually deal with it now by selling beneficial interest. They are so busy nowadays they wouldn't have the time to chase up every property!

Sparky the OR will hopefully use their experience to make a decision. As not much difference betweeen rent & mortgage for your area may not force you to move as you would have extra expenses. Also factor in if you moved to cheaper area for housing whether you would have increased travelling costs.They do try to be reasonable & consider moving costs, upheaval for family when deciding what to do.
If renting in your area was £600-£700 per month and you're paying £1200 then they may look at you moving but really up to who you get!