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bankrptct_beckoning

Can anyone help me please?

I will be going bankrupt in the next few months. We have our home and a buy to let flat in our joint names. My wife is not going bankrupt. An insolvency practitioner has advised me that i can transfer both properties (don't know the legal terms) prior to bankruptcy, as long as it is done properly. Our home has little, if any, equity and the btl has a shortfall. Therefore I have nothing to gain financially from doing this except for piece of mind having put my wife's mind at rest that neither property will be lost. I know I could wait for bankruptcy and then benefit from the low cost conveyancing scheme but the btl won't qualify. We are concerned that the flat may be somehow taken away, despite the negative equity and that my wife would be chased for the shortfall. We have no mortgage arrears on either and when the btl is let out again next month, the rent will more than cover the mortgage, which is low for the time being. The IP said that transferring before BR would also protect half the rent being taken for any IPA with my wife having to pay all expenses out of her half. We would only keep the flat as long as it takes to increase in value to the point we could sell and have no shortfall.

Does anyone know how we can perform this transfer without needing the lenders permission? Only because that would be unlikely with current lending criteria. I realise my name will still be on the mortgage and deeds etc.

Has anyone had experience of what i am trying to achieve?

Thanks in advance for any help

StepChange_Pavan

bankrptct_beckoning wrote: »

Can anyone help me please?

I will be going bankrupt in the next few months. We have our home and a buy to let flat in our joint names. My wife is not going bankrupt. An insolvency practitioner has advised me that i can transfer both properties (don't know the legal terms) prior to bankruptcy, as long as it is done properly. Our home has little, if any, equity and the btl has a shortfall. Therefore I have nothing to gain financially from doing this except for piece of mind having put my wife's mind at rest that neither property will be lost. I know I could wait for bankruptcy and then benefit from the low cost conveyancing scheme but the btl won't qualify. We are concerned that the flat may be somehow taken away, despite the negative equity and that my wife would be chased for the shortfall. We have no mortgage arrears on either and when the btl is let out again next month, the rent will more than cover the mortgage, which is low for the time being. The IP said that transferring before BR would also protect half the rent being taken for any IPA with my wife having to pay all expenses out of her half. We would only keep the flat as long as it takes to increase in value to the point we could sell and have no shortfall.

Does anyone know how we can perform this transfer without needing the lenders permission? Only because that would be unlikely with current lending criteria. I realise my name will still be on the mortgage and deeds etc.

Has anyone had experience of what i am trying to achieve?

Thanks in advance for any help

Hi there and thanks for you post.

I'm looking into this for you with our specialist bankruptcy support team, and I'll be able to give you a full answer on Wednesday when I'm back in the office.

I'm sorry for the delay, but I want to make sure that we give you the right advice.

Kind regards,
Pavan

StepChange_Pavan

Hi everyone,

Many thanks for your questions and comments during 2010; we've enjoyed reading and responding to them and being a part of the MSE community. We hope we've helped you with any debt problems you may have had along the way.

The CCCS MoneyAware team are now off for a well-earned Christmas break. We'll be back in the office for one day on Wednesday 29th December and then back to work fully on Tuesday 4th January 2011. Apologies for any delay in replying to your questions.

In the meantime you can still get debt counselling through our online service Debt Remedy 24 hours a day, or phone our Helpline on 0800 138 1111 (our Christmas opening times).

We wish you a Merry Christmas and a very happy and debt-free 2011.

Regards,

Sue and Pavan from the CCCS MoneyAware team
http://www.cccs.co.uk
http://www.moneyaware.co.uk

bankrptct_beckoning

Forgot to say i know transfers can be reversed if done at under market value, which i wouldn't need to do.

What i need to know is if there is anything i can do prior to going bankrupt, to make sure that i am in the best position possible?

Thanks

bankrptct_beckoning

Hi Pavan,

Sorry posted my extra bit before reading your reply. Look forward to hearing from you.

Have a great Christmas, you all deserve it for all the good you do.

Regards

ani_26

Thanks for your reply and help Pavan.

I wish you all a happy and peaceful xmas.

Nohope

belaynvnas

Have a great Christmas, you all deserve it for all the good you do.I wish you all a happy and peaceful xmas.

SteveABC

I have some general questions regarding bankruptcy. Some background information first: My wife left me and the home 14 months ago and moved into rented accommodation. She then declared bankruptcy. Because all the debt was in joint names, I have been paying all the secured and unsecured debt since, but I have now got to the point where I can no longer continue. I am now considering bankruptcy myself, but I do not want to lose my home. My questions:
1. After my wife declared bankruptcy, I bought the beneficial interest off the Official Receiver for £1 + costs, as the house was in negative equity. The house is still in substantial negative equity due to an additional secured loan. If I declare bankruptcy, can I buy the beneficial interest again?

2. The house has two secured debts - the mortgage (£181K outstanding with Northern Rock) and an additional secured loan (36K outstanding with First Plus). The house is worth £180K. If I declare bankruptcy, can I include the secured loan with First Plus in the list of debts to be dealt with by the bankruptcy, leaving me with just the main mortgage to pay, or do I have to continue to pay ALL secured debt to remain in the home?

3. The main mortgage is a "Together" mortgage with Northern Rock. This means I currently make one payment to them, but it is made up of two elements - the secured mortgage, and an unsecured loan. As long as I continue to pay the secured element after bankruptcy, will the unsecured element be dealt with by the bankruptcy?

4. If I declare bankruptcy and continue to pay the secured loans to remain in my home, will Northern Rock be able to take any action after discharge of the bankruptcy (i.e forcing me to sell if the house returned to positive equity in the future) to recoup the unsecured element of the Together mortgage?

5. Finally, if I declare bankruptcy and the Official Receiver decides I can afford to pay towards some debt from my salary, how long does this continue? Is it until you are discharged from bankruptcy, or is it a permanent arrangement?

Many thanks.

StepChange_Pavan

bankrptct_beckoning wrote: »

Can anyone help me please?

I will be going bankrupt in the next few months. We have our home and a buy to let flat in our joint names. My wife is not going bankrupt. An insolvency practitioner has advised me that i can transfer both properties (don't know the legal terms) prior to bankruptcy, as long as it is done properly. Our home has little, if any, equity and the btl has a shortfall. Therefore I have nothing to gain financially from doing this except for piece of mind having put my wife's mind at rest that neither property will be lost. I know I could wait for bankruptcy and then benefit from the low cost conveyancing scheme but the btl won't qualify. We are concerned that the flat may be somehow taken away, despite the negative equity and that my wife would be chased for the shortfall. We have no mortgage arrears on either and when the btl is let out again next month, the rent will more than cover the mortgage, which is low for the time being. The IP said that transferring before BR would also protect half the rent being taken for any IPA with my wife having to pay all expenses out of her half. We would only keep the flat as long as it takes to increase in value to the point we could sell and have no shortfall.

Does anyone know how we can perform this transfer without needing the lenders permission? Only because that would be unlikely with current lending criteria. I realise my name will still be on the mortgage and deeds etc.

Has anyone had experience of what i am trying to achieve?

Thanks in advance for any help

Hi there, and thanks for being patient with my response!

You are right that if you keep the BTL, the Official Receiver may want to take 50% of the rental income, leaving your wife to make up the shortfall.

The best way to transfer the mortgage at market value could be to remortgage in your wife’s name only. We have tried to contact the Insolvency Service for clarification on this for you but unfortunately couldn’t get through. You may wish to try calling them too as it seems as though it’s a bit of a grey area. Did the Insolvency Practitioner go into any more detail about how to transfer the property? You could also try asking him for more details.

I hope this helps.

Kind regards,
Pavan

StepChange_Pavan

SteveABC wrote: »

I have some general questions regarding bankruptcy. Some background information first: My wife left me and the home 14 months ago and moved into rented accommodation. She then declared bankruptcy. Because all the debt was in joint names, I have been paying all the secured and unsecured debt since, but I have now got to the point where I can no longer continue. I am now considering bankruptcy myself, but I do not want to lose my home. My questions:
1. After my wife declared bankruptcy, I bought the beneficial interest off the Official Receiver for £1 + costs, as the house was in negative equity. The house is still in substantial negative equity due to an additional secured loan. If I declare bankruptcy, can I buy the beneficial interest again?

2. The house has two secured debts - the mortgage (£181K outstanding with Northern Rock) and an additional secured loan (36K outstanding with First Plus). The house is worth £180K. If I declare bankruptcy, can I include the secured loan with First Plus in the list of debts to be dealt with by the bankruptcy, leaving me with just the main mortgage to pay, or do I have to continue to pay ALL secured debt to remain in the home?

3. The main mortgage is a "Together" mortgage with Northern Rock. This means I currently make one payment to them, but it is made up of two elements - the secured mortgage, and an unsecured loan. As long as I continue to pay the secured element after bankruptcy, will the unsecured element be dealt with by the bankruptcy?

4. If I declare bankruptcy and continue to pay the secured loans to remain in my home, will Northern Rock be able to take any action after discharge of the bankruptcy (i.e forcing me to sell if the house returned to positive equity in the future) to recoup the unsecured element of the Together mortgage?

5. Finally, if I declare bankruptcy and the Official Receiver decides I can afford to pay towards some debt from my salary, how long does this continue? Is it until you are discharged from bankruptcy, or is it a permanent arrangement?

Many thanks.

Hi SteveABC and thank you for your post.

I’ve answered your questions in the same order that you asked them:

• This will be at the Official Receiver’s discretion but as your home is in negative equity, it is likely that they will allow someone else to buy your beneficial interest. (You would have to appoint somebody to buy this for you)

• Any secured debts will not be included in the bankruptcy if you wish to keep your home.

• Yes, all unsecured debts will be included in the bankruptcy.

• No. Although they are lumped together, they are separate debts and they can’t chase the unsecured element further down the line.

• If you receive an Income Payment Order or Arrangement (IPO or IPA) this will last up to three years. It can be reviewed within this time if your circumstances change for better or for worse.

I hope this answers all of your questions, but we have a specialist bankruptcy team that can support you through the process if you need further advice.

You can call our free helpline (0800 138 1111) and they will be able to refer you if it is your best option.

Kind regards,
Pavan