NorthernRock together - does unsecured loan become secured + other questions?

DotNetter

Hi all

I've asked a similar question on the IVA forum but I'm now thinking I might have to consider BR instead.

I just wanted to know if anyone has gone BR with a NR Together mortgage?

I have a mortgage for £107k, a secured (equity release loan) for £25k and then we got £30k of unsecured with NR and then another £30K via unsecured credit cards. I've not idea how much my house is currently worth as it's never been commercially valued as we bought it from the local HA under the RTB scheme.

I've read that if you have 'little' to no equity in the property then you generally won't loose your home providing you continue to pay the mortgage...is this correct and if so, what does 'little' actually mean?

Cheers


Wayne

EnslavedByDebts

Hi Wayne,

I went bankrupt with a together mortgage. Basically the unsecured loan gets added to your bankruptcy and if you wish to keep the house then you only pay the secured loan part. The easiest way to do this is ring them each month and state that they must only pay the secured part. They were fine with me doing this.

I am not sure what 'little' in equity would be but if in negative equity you would be able to keep the house so long as the mortgage and secured loan payment is not miles higher than rental of the same place.

Hope this helps

EBD

DotNetter

EnslavedByDebts wrote: »

Hi Wayne,

I went bankrupt with a together mortgage. Basically the unsecured loan gets added to your bankruptcy and if you wish to keep the house then you only pay the secured loan part. The easiest way to do this is ring them each month and state that they must only pay the secured part. They were fine with me doing this.

I am not sure what 'little' in equity would be but if in negative equity you would be able to keep the house so long as the mortgage and secured loan payment is not miles higher than rental of the same place.

Hope this helps

EBD

Hi there,

Yeah, that helps a little although tbh I'm a little confused about the chances of keeping my home.

From what I've read, the 'trustee' is likely to sell my home if it has any euqity in it...have I read this correctly anyone?

Cheers


Wayne

EnslavedByDebts

Wayne,

If there is equity in the property then yes the trustee can sell your home to release the equity. You will have the opportunity to buy the equity yourself. Basically they are trying to get the money from the house so if you or a family or friend can buy it then you won't have to sell. If you can't raise funds then yes they could make you sell the house to release theequity.

EBD

DotNetter

EnslavedByDebts wrote: »

Wayne,

If there is equity in the property then yes the trustee can sell your home to release the equity. You will have the opportunity to buy the equity yourself. Basically they are trying to get the money from the house so if you or a family or friend can buy it then you won't have to sell. If you can't raise funds then yes they could make you sell the house to release theequity.

EBD

Thankyou,

That has cleared things up for me. I also understand that they are only entitle to up to 75% of the equity right?...what happens to the remaining 25%?

Regards,


Wayne

EnslavedByDebts

I am not sure about that Wayne, i know that if joint mortgage then only 50% is your equity i am not sure about if sole owner. I would assume that 100% could be taken minus selling fees etc.

EBD

DotNetter

you're right EBD...I was getting confused with an IVA.

Just a thought, if I owe NR £30k unsecured as part of the Together product I took out, could I phone them up and ask them to convert it to a secured loan on the house?

Now...I know you're thinking I must be mental but here's my thinking.

NR probably won't agree to an IVA anyway and they hold 50% of the vote so as soon as they say no it's all over.

If I go for BR with only £132k secured against my house then I would guess that I'll have around £20k equity (very, very rough guess) so the trustee will want to sell the house to free up the beneficial interest.

BUT...if I get NR to convert the unsecured to secured BEFORE I apply for BR then my secured debt would be more than the house is worth and thus I wouldn't have any beneficial interest and assuming it stayed that way for a while I wouldn't have to sell up!

I realise that I would only then wipe off half of my unsecured debt instead of all of it (because NR was no longer unsecured) but my only real concern here is keeping my home.

What do you guys think?

Cheers


Wayne

JCS1

OR could try and overturn the unsecured loan becoming secured prior to your bankruptcy, It would be classed as a disposal of an asset and also favouring a creditor - the OR would consider you for a BRO/BRU and investigate your affairs more thoroughly.

DotNetter

JCS1 wrote: »

OR could try and overturn the unsecured loan becoming secured prior to your bankruptcy, It would be classed as a disposal of an asset and also favouring a creditor - the OR would consider you for a BRO/BRU and investigate your affairs more thoroughly.

ah, this sounds like something I'm not aware of...there is so much to understand about BR's

Can you tell me what a BRO and a BRU are?

Thanks,


Wayne

DotNetter

JCS1 wrote: »

OR could try and overturn the unsecured loan becoming secured prior to your bankruptcy, It would be classed as a disposal of an asset and also favouring a creditor - the OR would consider you for a BRO/BRU and investigate your affairs more thoroughly.

Correct me if I'm wrong but it's sounding like my ONLY option is to go BR and loose my home?!!!!!!

It's unlikely NR will agree to an IVA and I owe too much to be considered for a DMP I would assume as CCCP worked out it would take 29yrs+ to repay my debt!

So if I can't do an IVA and I can't do a DMP then I have no choice but to go for BR and because I have an assumed £20k equity the trustee would probably look to release that. I have nobody who can afford to buy that and I obviously wouldn't be able to raise a 100% mortgage based on being BR and the current financial climate anyhow.

So the short of it is that no matter which way I turn I'm going to loose my home!

I gotta say, this sounds totally barmy to me? There are others who are BR whose borrowings far exceeded the cost of their homes (secured) who were also allowed to borrow unsecured and so overall owe more than I do...but I'm the one at risk of loosing my home because of UNSECURED debt!

I really don't understand this and am feeling a little ill now

JCS1

BRO extends the restriction of your BR for up to 15 years, leaflet with more information here:

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/bro.pdf