Will we lose our home?

totallyclueless2010

Hello,


Firstly, as someone on here put it, I too would like to admit that I have drifted in and out of this site for a while and have only now finally plucked up the courage to post on the forum! I hope I’m doing it right…

Basically, I have run my own Limited Company for the past four years and for one reason or another (mainly due to the recession) we’ve been forced into Liquidation. That’s all being taken care of, but unfortunately I made the mistake of paying for “business” things on “personal” credit cards, which obviously don’t get wiped out with the businesses debts.

The total of my personal debt (with the cards, a loan, overdrafts, etc) amounts to roughly £30,000 and I can no longer afford to pay them. I have been professionally advised that bankruptcy is the best option for my situation (as opposed to an IVA or Debt Management Plan). However, I am a homeowner and would just like to clarify if my home is at risk in any way shape or form? These figures are only rough, but hopefully you’ll get the general idea:

We purchased our house in 2006 for £210,000. We have an Interest Only mortgage for approximately £175.000. When we purchased the house, my partner sold his old house and put down £40,000 as a deposit. I had previously been living with my parents and had no money for a deposit, so we had a Deed of Trust written up by the Solicitor that handled our mortgage, at the same time, to say that if we were to break-up (we are not married), then my partner would get his £40,000 deposit back, before any profit was split 50/50. It is estimated that in the current economic climate our house is worth approximately £220,000 now (I have a valuation booked on Monday), which I think would mean that: -

House value = £220,000
Minus mortgage = -£175,000
Minus Deed of Trust = -£40,000
Equity = £5,000
My share of the equity = £2,500

- Does that sound about right?

The financial advisor said that any Official Receiver appointed to my case would look at the situation described above and would merely offer my partner the opportunity to buy my “beneficial interest” in the property as a means to paying his own fees, as in reality there is very little realisable equity there, and hardly any of it is legally mine.

My main questions are: Will the Deed of Trust stand, i.e. the O.R. can’t touch the first £40,000 as it’s legally not mine? And does the O.R. HAVE to offer my partner the option to do this?

My and my partner’s biggest concern is losing our home! Can you see any other way that this scenario might play out? Is there any other way that they could legally touch our house?

I have no other assets what-so-ever, i.e. no stash of antiques or family heirlooms, I even wrote my car off in an accident on Wednesday (not been a good few weeks for me!), although it can only have been worth about £500 anyway?!

Would be really grateful for any advice you can give!

Kind regards,

totallyclueless2010

skylight

ORs do not want to see people homeless. Really! They are human too (despite the facade) and quite frankly, with no equity in the property (or very low) it isn't worth their while in trying to force a sale; it will simply cost them too much money to action.

Now, the OR will usually offer the BI (Beneficial interest as in your share of the equity) to your OH first and if they dont or they forget then tell them you want OH to buy the BI, pretty please. Even if you had £100k of equity in it the OR would offer the BI if your OH was able to afford it rather than force a sale. It boils down to what is less hassle.

The OR is likely to get their own valuations done and you may have to get your own to argue your corner. With the trust deed you may find a bit of a fight on your hands when the OR passes the dealings of your house to an IP because they are a bit more rottweiler like. But you have the trust deed and that is a legal document. Neither the OR nor the IP are above the law and are not likely to take that on. Expect a spot of hassle over it but you are in the right with the trust deed. The OR will obviously want to see the copy of the trust deed. Personally, I would either take it for him to copy or ask if a certified copy is acceptable.

its-hapnin

hi totally clueless

i felt i had to reply because me and my hubby were in exactly the same position as yourselves (hubby BR, not me) and i have just bought back my husbands beneficial interest for the small sum of £500!! we had a trust deed drawn up because i put £63k into the house when we bought it. in addition to this, we also put £10k each in.

we gave the trustee a COPY of the trust deed along with 2 recent valuations from estate agents and stressed that they were proposed marketing prices NOT actual selling prices.

the trustee seemed to accept what we were proposing with regards to the equity (even tho there was no trust deed covering the additional £10K - we supplied bank statements supporting this) and agreed with no quibbles

your trust deed will show on the Land Registry (your house deeds).

if you want to ask me any more questions , feel free x


Also, when getting your valuation from estate agent ask for a "quick sale price" !

debtinfo

The OR can ask the court to overturn a deed of trust, but will only do so where the deed has unfairly put equity that should be available to creditors beyond their reach, for instance if you signed one just before going bankrupt handing over all your equity even though you both contributed evenly. Where the deed was fair and for a valid reason like in your case then there should be no problem

samsfunkydoodles30

Hi All
Im new on the forum and was just looking around for a bit of advice!
My husband and I are considering applying to go bankrupt, we have been on a DMP now for 5 years and the debt is still rising each time we get a statement from cccs.
We have no assets other than my husbands pention and we also have no equity in our home.
We have 2 children and the only reason we have never gone down the bankruptsy route is because we dont want to lose our home, we are under no illusions where our debt is concerned and know we will never beable to repay it without a miracle.
Im tired of all the worry but so scared of losing my home!!
Anyone got a bi of advice?? I would be so grateful
Thanks Sam

totallyclueless2010

Hi all

Thank you so much skylight, its-hapnin and debtinfo, that's certainly helped put my mind at rest! I guess all I have to do now is pluck up the courage and take the plunge! (And fill out the forms that is...)

Thanks again, totallyclueless2010 x

totallyclueless2010

Sorry, just another quick question!

As my boyfriend and I have a joint mortgage, how badly will he (and his credit rating) be affected by my going bankrupt? I read somewhere that it is possible for a third party to write to Experian, etc, and ask to be “disassociated” from a bankrupt person. Obviously we’ll always be linked by the mortgage, even if he’s buys my beneficial interest, but is it worth doing? Or will he be negatively affected regardless?

Or alternatively won’t he be affected that badly by it all anyway?

Help?!

totallyclueless2010