Any advice Welcome

fromthestart

Hi, this is my first post but I have been lurking for quite some time.

OK, Here's my story

My husband and myself found ourselves in financial difficulty back in 2006, we went bankrupt in June 2007 as we were advised by CAB this was the best thing to do.

In December 2006 we had a CO placed on our home by NR this was for a personal loan, at the time I was in hosiptal and even though we asked at the time for the courts to move the hearing to a court in our city this was refused and we were unable top attend the hearing and the CO was granted.

We thought at the time keeping our home was the best thing to do, we now know this was a miss take, we owe on the mortgage what our home is worth so if we sold we would be left with no money which is fine but obviously we have a CO on the property so what happens to this?

We have no spare money, both work every hour god sends to pay the mortgage, I work nights, look after the kids all day and have two -3 hours sleep when my hubby comes home and then back to work. I have been hospitilised 4 times this year and really dont think I can carry on much longer some days I just wish I was dead.

I have spent the past week trying to see if anyone has been in a similar situation and what they did, I just can't see any way out.

We want to sell but what happens to the CO? We never had the opportunity to defend it in court, Northern Rock knew that we were applying for bankruptcy and having read about the reasons for a charging order being refused this is one of them, please help is there any way we can apply to have this CO removed ? Is there any way we could ?

I don't know what to do, if it wasen't for my kids I wouldn't be here.

Thank you

Sunnylooloo

O my

I really can't advise you but someone will be along soon I just didn't want to read and run.

x

confused76

hi there and welcome
i'm no expert on charging orders etc but just wanted to say hi and you will get some useful advice here. it would be worth speaking to one of the free debt charities for their opinion, try the national debtline, cccs or the cab.

so sorry to hear your health is suffering, must be awful pressure. talk to us though, we'll listen xxx

fermi

fromthestart wrote: »

We want to sell but what happens to the CO?

Assuming that you haven't signed anything after your bankruptcy to say you were liable again then..........

If there is no money in the property to pay the CO, the debt would become an unsecured one that would fall into your bankruptcy.

fromthestart

Thank you,

Fermi I assume you mean signing something from Northern Rock who have the CO, no we haven't but we were disscharged in 2008 so does that not mean that the debt would not be included in our bankruptcy?

I'm so confused

fermi

fromthestart wrote: »

Fermi I assume you mean signing something from Northern Rock who have the CO, no we haven't but we were disscharged in 2008 so does that not mean that the debt would not be included in our bankruptcy?

No. Your liability to pay that debt is something that you entered into prior to the bankruptcy. As such, it is covered by the bankruptcy.

A bankruptcy debt is specified in law as:

(a) any debt or liability to which he is subject at the commencement of the bankruptcy,

(b) any debt or liability to which he may become subject after the commencement of the bankruptcy (including after his discharge from bankruptcy) by reason of any obligation incurred before the commencement of the bankruptcy,

so once unsecured when the sale fails to pay off the charge, the debt is then covered by the above.

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

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.

In your case the debt is secured by the CO as an additional charge.

If the charge is not paid off by the sale, it goes into your former bankruptcy.

alastairq

hi....as fermi says.....looks like your troubles are a thing of the past?

Sell the house, rent somewhere nice....but make sure you sign absolutely nothing!!!

fromthestart

Thanks,

Just one more question, sorry to be a pain, but what would happen if there was a shortfall in the mortgage? Would the Mortgage company chase us for any outstanding monies? I don't expect this to be the case but if it was because we had bought the benifical interest (at the cost of a £1) would we be liable for any outstanding monies?

thanks

fermi

fromthestart wrote: »

because we had bought the benifical interest (at the cost of a £1) would we be liable for any outstanding monies?

No you wouldn't.

I've asked the OR this on several occasions, and the answer they have always given is "No". Purchasing the BI gives you the right to any eventual proceeds from a sale once charges are paid off, but it apparently does not make you liable again for any shortfall.

So despite buying the BI, the situation would be the same as in the previous post. The shortfall on the mortgage/secured loans would go into your previous bankruptcy.

However, if this looks like something that is realistically likely to happen, then of course you should really take some independent advice yourself to confirm this.