Beneficial Interest & Repossession

Queen

Hi,

I have been searching threads for age's to confirm that if BI is purchased I am just about to send forms for both myself & OH to purchase we went BR in Nov 08 our house is £40,000 negative equity for OR to be interested so offered this for £1 but what I can get clarified I have spoke lots of time with insolvency.gov who give conflicting info if we purchased BI and in a few yrs time property was repossessed or sold with a shortfall would this be included in BR or not does anyone know!!!

peachyprice

As far as we know, nobody has put it to the test yet.

skylight

Logically (nothing is logical in BR though!) - you buy back the BI; meaning the property and all vested interests in it are yours, lock, stock and barrel.

If, after owning all this after your BR, the place gets repo'd with a shortfall, the logic bit dictates that you are responsible for this debt and it cannot be included in your BR.

However. 2 things - Firstly as Peachy put it, no-one here has tried it. Secondly, there is nothing to stop you going BR for a second time if it all goes wrong and you have a proveable debt to include in your second BR.

Queen

This means extra cost of going BR again and the stress as I'm sure 2nd time round would not be easy

dalip

No second bc usually have FTF interviews and things are looked in to more "deeply".Dx

blind-as-a-bat_2

the defanition of Beneficial Interest is the profit in the property, what you are buying back is the future benefit of any profit if you where to sell the property.

You are NOT buying back the liabilaty of the loan on the property.

There have been many discusions on here regarding this, and many conflicting posts after conflicting advice from many sources.

As far as i am concerned it is a debt that prosceeds BR, therefore your liabilaty for it goes into that BR if it becomes unsecured in the future

The legaslation supports that, unless its changed recently

blind-as-a-bat_2

382. "Bankruptcy debt", etc
(1) "Bankruptcy debt", in relation to a bankrupt, means (subject to the next subsection) any of the following -
(a) any debt or liability to which he is subject at the commencement of the bankruptcy.
(b) any debt or liability to which he may become subject after the commencement of the bankruptcy (including after his discharge from bankruptcy) by reason of any obligation incurred before the commence- ment of the bankruptcy,
(c) any amount specified in pursuance of section 39(3)(c) of the Powers of Criminal Courts Act 1973 in any criminal bankruptcy order made against him before the commencement of the bankruptcy, and
(d) any interest provable as mentioned in section 322(2) in Chapter IV of Part IX.
(2) In determining for the purpose of any provision in this Group of Parts whether any liability in tort is a bankruptcy debt, the bankrupt is deemed to because subject to that liability by reason of an obligation incurred at the time when the cause of action accrued.
(3) For the purposes of references in this Group of Parts to a debt or liability, it is immaterial whether the debt or liability is present or future , whether it is certain or contingent or whether the amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion; and references in this Group of Parts to owing a debt are to be read accordingly.
(4) In this Group of Parts, except in so far as the context otherwise requires, "liability" means (subject to subsection (3) above) a liability to pay money or money's worth, including any liability under an enactment, any liability for breach of trust, any liability in contract, tort or bailment and any liability arising out of an obligation to make restitution.

tigerfeet2006

Every time I have spoken to the IS or NDL they have stated that the mortgage debt SHOULD go into the BR if the house is repo'd after you are discharged and have bought the BI.

I am assuming that would still be the case if you changed mortgage provider

Though as Peachy say's nobody has tried it yet, so what could happen and what should happen are entirely different matters :rolleyes:

Queen

Thank you for all your comments

ilovemydebts

I would of thought if you change mortgage provider then it becomes a new debt, a debt after BR therefore not provable. I'm guessing it only works of you stay with your current provider at the time of BR

stintond

I had this situation , in the end I decided to let it get repossed just to be on the safe side , I had neg equity 60k