Ask a CCCS counsellor a bankruptcy question

StepChange_Pavan

CCCS_Pavan wrote: »

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

Hi again!

Just to update you – we have managed to get through to the Insolvency Service and they have confirmed what I mentioned earlier.

If you can’t remortgage in your wife’s name only and she is unable to maintain the 50% of the BTL mortgage, the property will be repossessed. The tenants would be protected for the remainder of their tenancy but you would not be able to keep the house.

Hope this helps.

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 break. We'll be back in the office 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

Dear Pavan

Sorry to be a pain, but just wanted to clarify something so that I am sure of what will happen.

If you can’t remortgage in your wife’s name only and she is unable to maintain the 50% of the BTL mortgage, the property will be repossessed. The tenants would be protected for the remainder of their tenancy but you would not be able to keep the house.

No, unfortunately we wouldnt be able to remortgage due to the negative equity.

So will the OR take half the NET rental income in the BTL, AFTER all expenses have been allowed for (mortgage, 10% monthly agent fees, insurance etc) or will the receiver insist on exactly half of rent regardless of costs, which will mean my wife may be out of pocket if she has to pay all costs out of her half of the rent? She had been receiving a small surplus each month with the mortgage currently being so low.

Also what would happen in the event that I didnt have enough income for an IPA, even with half of the net rent supplementing my income. Would I be allowed to keep the rent if that was the only way I could meet my half of the monthly bills (mortgage on home etc). With not being able to find work yet, i am not optimistic of earning a full time income in the near future.

If I was allowed to keep the rent towards my living expenses and didnt have an IPA, what would happen to the flat when I am discharged?

Having an IPA doesnt bother me if I am earning enough, but I am terrified of my wife losing out because of me, especially if she is chased for half the shortfall, if the flat was repossessed. As long as the mortgage is paid on time, is there any reason why we would lose it?

Sorry for so many questions again, but I really do appreciate your help as it is really stressing me out. That is why i am writing this instead of celebrating New Year!

I look forward to your reply in the New Year

Best Wishes for the season

debtinfo

no half the money would be paid to the OR before the mortgage is paid, the OR wont pay the mortgage. you can only use your half of the money topay direct costs such as a broken boiler

Kimbles76

Hi, I hope I am posting this in the right place; I'm a total newbie!

I am filing for personal bankruptcy and I am in the process of completing the forms.

Do I have to include my husbands earnings?

We have a joint tenancy (we rent a house) we are nervous about our landlord being contacted, would it be a good idea to put the tenancy agreement in my husbands sole name at this stage?

Would appreciate any advice, many thanks xx

Facing_Up_To_It_2

Hello,

I am considering BR this month. I'm married with a baby and about to return to work part time. However, my debts (credit cards, university loans and misjudged lending to family) are nearly £59,000 and I have no way of payng them off. I will be sinking by about £1.700 a month from this month onwards.

Our house is jointly owned and there may be a little equity, but my husband has always paid the mortgage and the 2nd mortgage (secured loan) on it.

If I go bankrupt, are there any mortgage companies who will take on the mortgage solely by my husband? I am terrified of making more of a mess of things and us losing our home with our baby.

I would appreciate any help.

charleyfarley76

Hi I'm new to this forum but would just like to ask a question about bankruptcy but first some background info...

I have a beauty salon which is suffering a downturn at the moment and it has got to the point where I am unable to pay myself a wage. This in turn is affecting my ability to pay my personal credit cards etc. I am a sole trader and in total owe about £26,000 (overdraft, bank loan and 2 credit cards.)

It is highly likely that in the next few weeks I will have to close the salon and if I am not able to find employment will have to file for bankruptcy.

I have a question about 2 pieces of salon equipment that I have on finance for which my father is a guarantor. I would like to keep this equipment and my father has agreed to keep paying the payments until I sort myself out. However I wondered if this equipment would be seized, sold and used to pay off other debts?

Thank you for reading...

StepChange_Pavan

bankrptct_beckoning wrote: »

Dear Pavan

Sorry to be a pain, but just wanted to clarify something so that I am sure of what will happen.



No, unfortunately we wouldnt be able to remortgage due to the negative equity.

So will the OR take half the NET rental income in the BTL, AFTER all expenses have been allowed for (mortgage, 10% monthly agent fees, insurance etc) or will the receiver insist on exactly half of rent regardless of costs, which will mean my wife may be out of pocket if she has to pay all costs out of her half of the rent? She had been receiving a small surplus each month with the mortgage currently being so low.

Also what would happen in the event that I didnt have enough income for an IPA, even with half of the net rent supplementing my income. Would I be allowed to keep the rent if that was the only way I could meet my half of the monthly bills (mortgage on home etc). With not being able to find work yet, i am not optimistic of earning a full time income in the near future.

If I was allowed to keep the rent towards my living expenses and didnt have an IPA, what would happen to the flat when I am discharged?

Having an IPA doesnt bother me if I am earning enough, but I am terrified of my wife losing out because of me, especially if she is chased for half the shortfall, if the flat was repossessed. As long as the mortgage is paid on time, is there any reason why we would lose it?

Sorry for so many questions again, but I really do appreciate your help as it is really stressing me out. That is why i am writing this instead of celebrating New Year!

I look forward to your reply in the New Year

Best Wishes for the season

Hi again,

Unfortunately, the OR is likely to want 50% of the rental income before any of your expenses such as the mortgage is paid. This would mean that your wife would have to make up the shortfall and pay out for any other expenses on top.

This would be regardless of your other expenditure so your budget would have to show that you have enough to live on without relying on the rental income.

The only way you would be able to keep the flat is if your wife is able to pay the remaining mortgage once the OR has taken his cut. Like I mentioned, the alternative would be that the flat would be repossessed and your wife would be liable for the shortfall.

I’d really recommend that you call our free Helpline (0800 138 1111) so that you can discuss your situation in more detail and we can see if there are any other options available to you. If bankruptcy is determined as your best solution, our specialist bankruptcy team will be able to support you through the process and also answer your questions straight away so that you wouldn’t be waiting for a response.

Kind regards,
Pavan

StepChange_Pavan

Kimbles76 wrote: »

Hi, I hope I am posting this in the right place; I'm a total newbie!

I am filing for personal bankruptcy and I am in the process of completing the forms.

Do I have to include my husbands earnings?

We have a joint tenancy (we rent a house) we are nervous about our landlord being contacted, would it be a good idea to put the tenancy agreement in my husbands sole name at this stage?

Would appreciate any advice, many thanks xx

Hi Kimbles76 and thank you for your post.

You certainly have posted in the right place, welcome to the forums!


You don’t have to include you husband’s income but you will need to show what he contributes to. For example if you each pay half of the rent, you could put a comment next it on the budget to say ‘Husband pays half’. Similarly, if your husband pays something in full, you can just put £0 and a comment to explain that your husband pays in full.

With regards to your tenancy, there shouldn’t be any problems provided that you can afford to maintain your rent and you don’t have any arrears. I’d also recommend that you check your tenancy agreement to ensure that there are no terms in there that would affect you if you went bankrupt.

Sometimes it’s best to be upfront about these things as your landlord won’t necessarily be informed but he could find out (through a credit search for example). As long as the rent is maintained each month it shouldn’t affect your landlord.

Hope this helps.

Kind regards,
Pavan

StepChange_Pavan

Facing_Up_To_It wrote: »

Hello,

I am considering BR this month. I'm married with a baby and about to return to work part time. However, my debts (credit cards, university loans and misjudged lending to family) are nearly £59,000 and I have no way of payng them off. I will be sinking by about £1.700 a month from this month onwards.

Our house is jointly owned and there may be a little equity, but my husband has always paid the mortgage and the 2nd mortgage (secured loan) on it.

If I go bankrupt, are there any mortgage companies who will take on the mortgage solely by my husband? I am terrified of making more of a mess of things and us losing our home with our baby.

I would appreciate any help.

Hi there and thank you for your post.

It’s difficult to say exactly what will happen as it is ultimately at the Official Receiver’s discretion.

You would need to prove that you husband has always paid the mortgages and it would also depend on how much equity there is in the property. Even though he has always made the payments, you may still have beneficial interest in the house, as you are jointly named on the mortgage and will have contributed towards the household costs. I wouldn’t recommend remortgaging until we can give you some more detailed advice.

This leaflet from the Insolvency service gives you more information, but I’d really recommend that you call our free Helpline to discuss your situation with one of or trained counsellors.

We will be able to explore all of the options that are available to you and if bankruptcy is your best option, our specialist bankruptcy team will be able to support you through the process, help you fill out the forms and answer all of your questions.

You can call us on 0800 138 1111. Lines are open Monday to Friday 08:00-20:00. If you do decide to call us, please have details ready regarding your income, expenditure and creditors, as this can help speed up the referral process. If you have all of the necessary information ready, it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

Hope this helps.

Kind regards,
Pavan