Bankrupt, House in Neg Equity, 2 Secured Loans

liserini

I've declared myself bankrupt of the beginning of March. I'm continuing to pay my mortgage and secured loan. The total of these loans is about £92k, the house next door but one is on the market at £55k! If I were to stop paying one lender, i.e. the lower of the two, who just happen to be Firstplus(!) would they be able to force me to sell my home even if the primary lender was still receiving their payment and would possibly not agree to a sale.

It's just a thought...

Chuckie1998

Hi, I am in the same situation as yourself, and have been considering the same option.

I have been told, that Firstplus can "force the sale of the property".
I was 3 payments behind with my Firstplus loan and received a letter from them stating this. I managed to make up one of the missing payments, and there is a legal loophole (I think) that means that now I am only 2 payments behind they can't do so.......or something along those lines.

I am sure that someone will be along soon to confirm whether a secured loan company can force the sale of a property if you are behind with payments.

I made myself fall behind with my Firstplus payments as that was how I managed to save up for the BR fee!

tigerfeet2006

Chuckie is correct.

silvercar

If they repossessed the primary lender would get the first lot of money from the sale, so they would be paid.

The question is whether the third charge would go through the costs of repossessing, given that they would not recover any money from the sale.

Joined up thinking would lead them to the conclusion that it wouldn't be sensible to do it, especially as repossessing could easily force you to bankruptcy leaving them out of pocket. Whether all lenders have joined up thinking is another matter, and whether they realise the folly of their ways immediately is also debatable.

Ineedaname

Silvercar - the OP is already BR.

iserini - I guess the question is, do you want to keep the property?

liserini

I would like to keep the house. Just need to find the money to pay the loan! Thanks everyone

silvercar

liserini wrote: »

I would like to keep the house. Just need to find the money to pay the loan! Thanks everyone

Logically, you should let this house go and buy the house nearby. That would give you repayments on 55k not the 92k you are paying at the moment!

silvercar

If I were to stop paying one lender, i.e. the lower of the two, who just happen to be Firstplus(!) would they be able to force me to sell my home even if the primary lender was still receiving their payment and would possibly not agree to a sale.

As I said before, they can repossess. In taking a charge secured on your home you understand that failure to keep up with repayments means you may lose your home.

The primary lender doesn't need to agree, all that needs to happen is that the secured charge lender goes to court and gets repossession.

Whether they will or not is a different matter. Again as I said, it would mean they would lose money by doing so, but sometimes they don't think of this and just march in and go the repo route.

Xbigman

silvercar wrote: »

Logically, you should let this house go and buy the house nearby. That would give you repayments on 55k not the 92k you are paying at the moment!

It doesn't work that way. Have a house with 92k debt repossessed and you won't get the chance to buy that 55k one for a very long time.

The comparison should really be between the mortgage payents on 92k and the cost of renting the same property. If you can rent for at least 10% cheaper it would pay to sell up.
There are a couple of things worth noting.
If in arrears then how much extra interest/charges are getting added. That might be making staying put very expensive.

Also, interest rates will be rising over the next few years. How will that effect the mortgage? Getting out now might be the answer if you are looking at steep rises ahead.



X

debtinfo

I dont think silver car was seriously putting that forward as a proposition