Help, the 2nd charge on our house are trying to bully us into paying them.

lollyheart

We was made bankrupt last year.

We are going through the mortgage rescue scheme at the moment but are having trouble with the 2nd charge on the house.

They won't except the offer made to them by the mrs saying they will only agree to it if we pay the shortfall.

Surly they can't do this, it's included in the bankrupsty.

We are on the verge of losing our home because of the 2nd charge, if they won't except the offer the house will get repossessed and they will get nothing and in the mean time make a family with young children homeless.

Any advice on what we can do to stop them doing this before we Lose our home, thanks.

gillypkk

from what ive read, if you signed any documentation AFTER your BR then you can be charged the shortfall but if you have signed nothing then it will be included in your BR.

lollyheart

We haven't signed anything after the br was made, we are relieved it's included, but there must be something we can do or say to the 2nd charge people to make them realise what they are doing is wrong, they don't seem to care if we lose our home, It won't make any difference to them to who buys the house.

They are being very unreasonable by making us think we can only save our house if we continue to pay them after it's sold, when we know that isn't the case, but they seem to be getting away with it.

JasX

Is there not some mechanism for getting charges removed after BR via the OR/BR process?

silvercar

Lollyheart wrote: »

They are being very unreasonable by making us think we can only save our house if we continue to pay them after it's sold, when we know that isn't the case, but they seem to be getting away with it.

In bankruptcy the shortfall would be written off (provided you didn't sign anything post bankruptcy), but if you stay in the home then they can repossess if you fail to keep up with repayments. It is only once the property is sold that the debt is crystallised and falls into the bankruptcy. So legally they are correct.

This mortgage rescue scheme operates in a similar way to a sale, they can choose not to agree to the sale if they don't get all their money back.

Where their logic falls down is that in repossessing as a second charge they may not get the full money back, so it makes more sense for them to accept a reduced payment and allow you to remain. Sadly, logic doesn't all always win.

lollyheart

JasX wrote: »

Is there not some mechanism for getting charges removed after BR via the OR/BR process?

I'm not sure on this.

lollyheart

silvercar wrote: »

In bankruptcy the shortfall would be written off (provided you didn't sign anything post bankruptcy), but if you stay in the home then they can repossess if you fail to keep up with repayments. It is only once the property is sold that the debt is crystallised and falls into the bankruptcy. So legally they are correct.

This mortgage rescue scheme operates in a similar way to a sale, they can choose not to agree to the sale if they don't get all their money back.

Where their logic falls down is that in repossessing as a second charge they may not get the full money back, so it makes more sense for them to accept a reduced payment and allow you to remain. Sadly, logic doesn't all always win.

So if I understand what you are saying the 2nd charge can still ask for payments even tho we are in br?

So why has our or and the judge said they are acting wrongly by demanding payments from us and not to pay them?

I thought we are not supposed to pay creditors as it gives them priority over over creditors, iykwim?

freddy911

Lollyheart wrote: »

So if I understand what you are saying the 2nd charge can still ask for payments even tho we are in br?

So why has our or and the judge said they are acting wrongly by demanding payments from us and not to pay them?

I thought we are not supposed to pay creditors as it gives them priority over over creditors, iykwim?

That is true if you let them repossses the house, problem is you want to stay there, and they still have the charge over the property so they are using it to bully you into paying. They have no legal ability to make you pay but they can take the house. Have the first charge agreed to the sale? I'm sure there would be some legal route to force them to agree if what they have been offered is a fair price that they wouldnt be able to get better than on the open market.

lollyheart

srichar3 wrote: »

That is true if you let them repossses the house, problem is you want to stay there, and they still have the charge over the property so they are using it to bully you into paying. They have no legal ability to make you pay but they can take the house. Have the first charge agreed to the sale? I'm sure there would be some legal route to force them to agree if what they have been offered is a fair price that they wouldnt be able to get better than on the open market.

Yes the 1st charge agreed to this last October. It really has been going in for this long.

That's what we can't understand, if the 2nd charge go for reposession they won't get any more money, if any at all.

It's not really fair that they can do this, they know they are getting a good deal if they eccept now.

silvercar

Lollyheart wrote: »

So if I understand what you are saying the 2nd charge can still ask for payments even tho we are in br?

So why has our or and the judge said they are acting wrongly by demanding payments from us and not to pay them?

I thought we are not supposed to pay creditors as it gives them priority over over creditors, iykwim?

Secured charges (mortgages and 2nd charges) are not part of your bankruptcy. It is only when the property is sold that the shortfall falls into the bankruptcy. So there is no point paying the second charge if the property is being repo'd. In this case a property rescue is like an assisted sale or a voluntary repo, but the charge holder can block the sale.

That leaves you with the choice of trying to keep the property and make the mortgage and 2nd charge payments or risk repo. Or alternatively to allow the repo to happen and then the shortfall falls into bankrupcty.

Dumping the shortfall into the bankruptcy and keeping the home is like having your cake and eating it.

These mortgage rescue schemes are new and probably don't fall neatly into a tried and tested bankruptcy formula. Someone needs to explain to the 2nd charge holders that they gain more by allowing the sale.

Of course once the sale has happened the 2nd charge is unsecure and does fall into your bankruptcy. If you hadn't yet gone bankrupt you would have been able to persuade them to allow the sale to mortgage rescue and change the 2nd charge into an unsecured debt - which could then fall into bankruptcy. Given you are already bankrupt you can't do this as the 2nd charge holder probably won't agree to the sale without you signing that you acknowledge the debt.

freddy911

Call their bluff? ask them to reposess then they will have higher costs and get less? You obviously run the risk of loosing the home though then.