Bankruptcy, Main Residence & Mortgage Company

tigerfeet2006

Just as a quick aside I am assuming you mean the Isolvency Service enquiry line on 0845 602 9848 when you say you phoned the Bankruptcy Enquiry Line.

tmb70

Thanks all for the input you have given I will now respond.

fermi, thank you this. It confirms the advice and research I have carried out.

So taking each step at a time, bankruptcy will prevent the interim charging becoming made final providing I go bankrupt prior to the court date.

fermi wrote: »

If you go bankrupt before the interim charging order is made final, then the court is not entitled to make the changing order final and would have to dismiss it.

You say your main residence in in negative equity?

Is that likely to change in the next 2/3 years? Forgive me if you've said and I've missed it. Quite a lot to read here.

tmb70

fermi wrote: »

OK. In that case the OP and other posts are correct.

The OR would sit on and BI on a jointly owned home for 2 years 3 months to see if any equity developed.

If on that review any equity is still below £1,000 then they would either let the BI automatically re-vest after the 3 years, or disclaim their interest allow in to re-vest before that.

fermi and silvercar, yes the negative equity is on the large side so I would envisage seeing negative equity for longer than 3 years.

The property is not joint, it is only in my name.

I have read that a person who is bankrupt maybe "released" (unsure of correct term) after 1 year. In this event does it mean the OR has also "released" the property so you are then free to do what you wish?

tmb70

debt_doctor wrote: »

Hi,

Much has been said (especially by Silvercar) and you have received good advice, to raise some points;

You will not be able to negotiate your way out of your current mortgage (reduced payments because so much neg equity) you may get reduced payments for a while as a concession, but any such move ultimately puts your home at risk.

District Judges love Charging Orders! I have used every legal argument in the book over the years with almost nil success. DJs think it is perfectly fair for a lender to 'secure' their debt. The best argument I could suggest (bearing in mind my track record on the subject!) is that a CO will severely prejudice your other creditors in that you are insolvent and a CO would remove this creditor from BR proceedings. Doubt whether it would work though and by far your best option to avoid a CO is to go BR before the order is made final.

Good luck.

DD

debtdoctor, it is a high risk strategy for the day. The bank will no doubt have there legal team to act as representatives while I would not.

I conclude that bankruptcy is the most appropriate course of action.

fermi

tmb70 wrote: »

The property is not joint, it is only in my name.

From what I was reading, I think there might be some difference in how it's dealt with if the property is solely owned?

I assumed joint.

I'll need to try and check. It might not be anything significant to you, but......

silvercar

tmb70 wrote: »

I have read that a person who is bankrupt maybe "released" (unsure of correct term) after 1 year. In this event does it mean the OR has also "released" the property so you are then free to do what you wish?

Providing you haven't done anything suspicious or naughty, you normally get discharged after a year. However, depending on your income, you may get an IPA where you have to make monthly contributions for 36 months. If you do get an IPA then you have to declare any changes in finances within 21 days. Any large sum of money received would have to be declared. Aside from discharge and any IPA, the OR has upto 3 years to decide what to do about the benificial interest in your residential home.

With large negative equity, the OR could decide to return the BI to you ina matter of months, but more likely they would wait to see if prices go up and any equity appears.

tmb70

silvercar wrote: »

Seems to me that the house is the sticking point. You talk of your wife getting a mortgage and taking it on. That assumes that she has good credit and sufficient income to be given the mortgage. Effectively it is a sale to your wife if the property is all yours at the moment. Even if the mortgage lender did agree a reduction in mortgage size, that would still leave your wife with negative equity (making getting the mortgage improbable).

Consider this (and I'm making up numbers as before). Property value 120k, mortgage 200k. So you want to negotiate this mortgage down and say let your wife take a mortgage of 160k for the property. So the lender foregoes some of the borrowed amount and the property becomes your wifes. Now if you found an identical property for sale your wife could buy that for 120k, so it makes no sense to take on any mortgage bigger than the property value, when your wife could buy an identical property at a cheaper price.


The other sticking point is that in bankruptcy the official receiver is only going to allow to keep sufficient money for you to pay a mortgage of the size of a suitable rental property in your area. If your mortgage is a lot more than that you are going to run into problems - unless your wife has a high income of her own.

The property (our house) has been built by myself in a rural location, so it will be difficult to find a direct comparison Land bought at auction and a new planning permission to me.

There are bad points (I see for the lender/mortgage company) I dont own the access which we use on daily basis, no Building Regs, no warranty (NHBC or similar) and so on and so on . . .

With house prices going south and the added problems if the lender was to "repo" and then sell through auction/LPA Receiver etc there are some serious items to add further down value.

This is where my thoughts are coming from regards repossession through arrears, if the mortgage company values the house as a house it is worth "X", then add in the additional points for a further minus, call this "Y", the answer is "Z"

The answer is clearly less the mortgage balance, the lender will attempt to sell to recover as much as possible then chase me (sole name owner), however, if I am bankrupt I understand the lender will obtain zero from me.

So can a figure be negotiated between the "Z" amount and the mortgage balance, plus through the banking £65b further write off.

I hope it makes sense and are able to see the angle I am approaching from.

Thanks and look forward to any questions.

tmb70

tigerfeet2006 wrote: »

Just as a quick aside I am assuming you mean the Isolvency Service enquiry line on 0845 602 9848 when you say you phoned the Bankruptcy Enquiry Line.

tigerfeet2006, you are absolutely correct, apologies.

fermi

fermi wrote: »

From what I was reading, I think there might be some difference in how it's dealt with if the property is solely owned?

I assumed joint.

I'll need to try and check. It might not be anything significant to you, but......

Can't find that at present. It was probably nothing, as I was skimming through large volumes of stuff.

As always, please take some independent (perhaps even legal) advice when it comes to important matters like these.

tmb70

fermi wrote: »

Can't find that at present. It was probably nothing, as I was skimming through large volumes of stuff.

As always, please take some independent (perhaps even legal) advice when it comes to important matters like these.

ferni, may I ask what you thought you had seen . . .