Bankruptcy - second charge on home equity

pascoej

Hi,

I have recently gone bankrupt.

My property is valued at £145k now. The mortgage is £100k and a family member has a charge on the property for £50k, so in theory there is no equity to take as £150k is 'spoken' for via charges.

However, an insolvency practitioner has been appointed to try and get the second charge removed via the courst so that they can go for the equity in my house.

How likely is it that they will be able to get the second charge removed ? I would have thought this was near impossible ? please advise.

Thank you..

Rafter

As long as the charge is legal and cannot be seen to be favouring one creditor (the family member) over your other creditors (presumably banks and loan companies) then you should be fine.

If the charge was put in place within 6 months of going bankrupt then you could be on very shaky ground and the IP could successfully argue in court that you have treated your family member preferentially and that therefore the charge is invalid.

R.

pascoej

Hi Rafter,

Many thanks for your reply, much appreciated.

I fear I may be on shaky ground as the charge was put on 6 months ago and if the charge my family member has uses the last of the equity in the house (50k - mortgage company has 100k).

P.

debtinfo

why was the charge put on

pascoej

Hi,
The charge was put on because my couisn (now second chargee) gave me a loan.

debtinfo

If it was put on when the loan was given that should be alright. If it was put on later to protect the asset from other creditors then that might be a problem

the-muffin-man

Did your cousin lend you 50k? If so the OR will want to know where this money has gone, if it was a lesser amount then the OR will likely want to know why a 50k charge was put in place.

blind-as-a-bat_2

pascoej wrote: »

26-05-2009, 4:01 PM

Hi,

I have given my cousin a 50% charge on my property as form of protection from an IVA. My cousins business is now in difficulties. Two questions ;

1) Can my cousin force me to sell as the second chargee ?
2) As he is the second chargee, can he use this as evidence of an asset when buying another business for example ?

Thanks in advance.

......................:confused:

nervousmother

hmmm so the charge was put on the property so the creditors could not get at it then. I would say that the cousin is not owed any money and this seems to be a case of get rid of debts and keep assetts.
Thanks baab

debtinfo

I would say that would fell as a transaction at undervalue if no consideration was received, and thus the trustee would probably challange it

happypromod

My sister from USA loaned me over £300,000 in 2003-04 and we signed an agreement ourselves without the help of lawyer. The agreement gave her second charge on main house and second house both. It was never registered with land registry as we did not know.

The business still failed and I have been made bankrupt. Can the trustees in bankruptcy ignore her charge because it was not registered?
Peter