Beneficial Interest Question - how much Equity?

Esoog

Greetings,

does anyone have any idea how much equity there needs to be in your house before the official receiver makes you sell? I read somewhere that after the fees etc it has to be over £4000 - is this correct?

Many thanks for any replies,

sfjnet

Hi

I have read it's just £1000. No idea how they take into account the various fees, etc. I hope actually that you are right as it would be a lot better for me!!!

Good luck (to all of us)

out_of_cash

i would think it would be significantly more as the fees in bankruptcy can be horrendous especially if a insolvency practinoner is involved,cant see how they would be looking to force a sale on 4k equity if the debts involved were say 12k as the admin side alone wouldnt be worth it.

someone with more experience will be along soon to give a clearer view on this.

ooc

Esoog

I should add its not me thats bankrupt; its my partners ex-husband. He's still on the mortgage though hence why the OR is now hassling us

nervousmother

THE OR will only be after 50% of the equity if it is owned by two people and only one BR, if the equity was 4k, he would want half 2k, but may accept 1k. If you did not pay up he may leave it for another two years at which point the equity would be more and it may well be worth him going to court at that point ot force a sale.
The OR has 3 years to deal with a property from the date of him knowing about the property.
If your wanting to pay as little as possible your better off getting it sorted sooner rather than later.

debtinfo

generally (each case is done on its merits) the OR (or trustee) will only force a sale if there is more than £10,000 of the bankrupts equity. (remember they can keep it for 3 years and house prices may go up). If they are running out of time and there is £1-10,000 of the bankruptcy equity they will usually go for a charging order as it is quicker and cheaper. if less than £1,000 they wont do anything

Esoog

Can you tell me about what they include in the equity? We can't seem to get a straight answer, some say "we just take the mortgage figure and the valuation figure and work it from there" and some say "its after all the fees etc have been included" - ie early repayment / estate agents fees.

And what would they do if for example after a valuation they said there was £5k equity (so £2.5k each in theory) would they just want us to offer them that in cash? and that would be it?
Its all crazy to me, the mortage is currently £86k, the valuation today was £95k, theres £4k early repayment fee plus £3k estate agents fees = £2k divided by 2 = £1k?!

debtinfo

The equity is simply the value of the property less the outstanding mortgage. Anything after that is a negotiation with the OR, they do not have to allow money for estate agent or early redemption but they may if it means getting a quicker sale

at the end of the day if you cannot afford the asking price then you cant buy it back

Esoog

I appreciate your help debtinfo,

but how about this one - they may not include those fees in their sums - however those fees have to be paid. Now we wouldnt have the money to pay out of our own pockets (and why should we? We are not the ones that have gone bankrupt and why would we pay anything extra to the ex husbands trustee?) so the money would have to be taken from the proceeds of the house sale.

So, £86k mortage and valued at £95k, that leaves £9k.
Minus £4k early repayment & £3k fees = £2k. So £1k "profit" at the most (although we would argue its not 50/50)


And, what if we missed some mortgage payments on purpose? There's an unsecured loan (it was a together mortgage) that the Lender would then want to secure on the property via the county court - which would take the home well into negative equity - although my partner would get a CCJ. Not an ideal situation but it would stop our home being taken for someone elses mistakes? Would the OR/Trustee be able to stop the lender securing that loan against the house?

Esoog

They've now told us for certain they only take the mortgage and the valuation so in theory we're looking at £9k. We told them that after all the fees etc it wouldn't be that, and they then said "well you aren't selling are you". We're not and simply cant offer them the 50% of the alleged equity - £4k, would they accept half of that if we gave them specific reasons why; here is a valuation of what we think the BI is - based on houseprices on the same road/market conditions/fact he hasn't contributed etc etc/ if you were dont accept and want to try and sell you'll have a long wait and might come out with !!!!!! all?

I accept they dont really want our house and are just after money to pay my partners ex-husbands debts, for them £2k is better than nothing surely?