IMPORTANT - Voluntary repossession forms and bankruptcy

MicheH

Would you and bat help me out

I am waiting for them to contact me about shortfall. I so know they are going to at least try to trick me for it.

fermi

MicheH wrote: »

Would you and bat help me out

I am waiting for them to contact me about shortfall. I so know they are going to at least try to trick me for it.

I'm sure we can put together a good reply to any [STRIKE]lies[/STRIKE] nonsense they may come out with.

fermi

Rach2007 wrote: »

My query is, is if we are going to do vol repossession/repossession do we need to do this before we are discharged i:e within the year? Or if we dither about with it and leave it till after discharge could we then be facing a second bankruptcy when there is any shortfall from a sale after any possible repossession?

There isn't any time limit or requirement to do it before you are discharged.

Just NEVER sign anything after the BR order has been made saying that you are liable.

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> If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?

Question: If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?

Answer: A debt which is secured by a mortgage or a charge on a property is still a provable bankruptcy debt. The mortgage loan company is "a secured creditor" which means they have rights over an asset, the house, and can require the asset to be sold to pay their debt. These rights are not affected by the bankruptcy. On the making of a bankruptcy order the mortgage loan company could make a claim in the proceedings but, unless it wished to give up the security, could only claim for any (estimated) shortfall.

If you continue to live in the property it is likely that you will continue to make payments to the mortgage loan company to avoid the property being re-possessed. When the property is eventually sold any shortfall to the mortgage loan company is still a provable debt in the bankruptcy, even if you have been discharged, as you are released from the debt on discharge.

Your bankruptcy does not affect the obligations of any joint owner who has not been made bankrupt to repay the mortgage loan debt or any shortfall, as they are still liable for the whole of the debt.

After the date of the bankruptcy order the mortgage loan creditor may ask you to sign a "deed of acknowledgment" of the outstanding debt. If you have signed such a deed the mortgage loan creditor can take action against you to recover any shortfall following the sale of the property.

Rach2007_2

Many thanks for your reply Fermi.

I'm sorry if I'm sounding daft here, but as I understand then, in the unfortunate event that we cannot maintain our mortgage repayments even say a couple of years down the line due to rate rises or whatever, and our lender decides to repossess, we STILL wouldn't be liable for any shortfall purely because we went bankrupt in 2010?

thanks again in advance!

Rach

Sammy3008

I have just received this email from the Insolvency people, from when I queried the signing of the letter regards Shortfall before BR, and this is the reply I received:

I can confirm that you can voluntarily surrender the property to the
mortgage company, and any resultant shortfall on the sale of the
property will be a debt of the bankruptcy. However, a secured creditor
may request a bankrupt to complete a deed of acknowledgement of debt
when the sale of the property results in a shortfall. The reason(s)
given by the secured creditor may be that no dispute will then arise on
the amount of the shortfall, or that it wishes to settle proposals to
repay the unsecured portion of the debt by instalments - however, the
secured creditor is entitled to claim in the bankruptcy for the
unsecured balance of its debt and it will be for the trustee to consider
such a claim. If a bankrupt completes such a deed, a new debt might be
created on which recovery action might be based at any time within the
limitation period. Accordingly if you are asked to complete such a
deed, I would suggest that you seek your own legal advice.

I hope this is helpful.

I'm completely lost!! Are they basically saying what everyone else has, its ok to sign before BR? I'm so stupid sometimes

Sammy3008

Can anyone answer the above query please

Rach2007_2

Rach2007 wrote: »

Many thanks for your reply Fermi.

I'm sorry if I'm sounding daft here, but as I understand then, in the unfortunate event that we cannot maintain our mortgage repayments even say a couple of years down the line due to rate rises or whatever, and our lender decides to repossess, we STILL wouldn't be liable for any shortfall purely because we went bankrupt in 2010?

thanks again in advance!

Rach

Hi again guys, just bumping this bit of my query up again...if anyone could clarify I would be really grateful...still just struggling to understand it.

Many thanks

Rach

Rach2007_2

Thanks so much Bat.

xx

fermi

Sammy3008 wrote: »

If a bankrupt completes such a deed, a new debt might be
created on which recovery action might be based at any time within the
limitation period. Accordingly if you are asked to complete such a
deed, I would suggest that you seek your own legal advice.

In other words, "Don't sign it".

A strong hint like that says it all.

Sammy3008

fermi wrote: »

In other words, "Don't sign it".

A strong hint like that says it all.

Its been dated, but not signed yet. Do you think we should just send a letter alongside it instead?
There are people that have signed this before BR on here though isn't there?