Mortgage Company, Bankruptcy & Main Residence

tmb70

Hi all, I really need some advice.

I had a business building new build schemes, due to the downturn a scheme is now repossed. An interim charge will become a full charge on my main res due to a personal guarantee and I have a long list of other debts.

I plan to go bankrupt and start a clean slate.

My main residence has genuine negative equity so apparently it will be vested back by the OR.

I am attempting to approach the mortgage lender with the view of asking them to write off 'X' amount and remortgage (in my wife's name) for a reduced settlement.

The mortgage is a subsidary company of Lloyds/HBOS which are part of a government scheme whereby when they hit £65billion of further losses then the government (taxpayer!) will stump up.

All I want to do is reduce my huge mortgage, and ask the banks to write some of my debt off.

Has anyone had or know of any such dealings?

Feel free to send PM's

silvercar

If you are going bankrupt you cannot give one creditor preference over another, so I don't think you will be able to do a deal with the lender.

Unless you sell the home or let it be repossessed, the mortgage (or negative equity cannot be included in your bankruptcy). So I can't see a lender agreeing to a deal.

Thrugelmir

tmb70 wrote: »

I am attempting to approach the mortgage lender with the view of asking them to write off 'X' amount and remortgage (in my wife's name) for a reduced settlement.

Do you really believe that your lender is going to write off debt owed by your wife?

Suggest you scrap the idea as its a 100% no chance.

antrobus

Let me see if I've got this straight (and I'm making a few guesses here);

- you have a house with a mortgage supplied by a subsidary of Lloyds/HBOS
- you set up a company that traded in property development, and gave a personal guarantee against the company's debts which was secured on your home
- the business failed, the company went into liquidation, the lenders called in the guarantee which you couldn't pay, so it's now a charge on your home
- you've now filed for bankruptcy, and the OR isn't interested in your home because the total of the mortgage and the crystallised guarantee exceed the value of said property.

Your plan is to approach your mortgage lender (a subsidary of Lloyds/HBOS) and offer them a deal whereby they will write off part of the mortgage debt in return for your wife taking on the responsibility for repaying the lower amount now due. I would assume that the reason you'd like this to happen is because you will now struggle to meet the repayments on the mortgage and you want to reduce it to a level which your wife can afford on her income.

I think they're going to say 'no'. Because they can always repo and get 100% of their money back, and let the holder of the guarantee sweep up what's left.

tmb70

antrobus, nearly . . .

The property is in my name only, with negative equity. So if repo takes place the lender will kick us out achieve a sell, and only claw part of the outstanding mortgage balance.

Business failed, I have/had a PG which is currently an Interim Charge, on 12th September it will become a Full Charge. Obviously do not want the bank to obtain a full charge for hundreds of thousands of £, as I intend to retain the house and eventually use any equity for a care home for myself and wife etc . . .

Not filed for bankruptcy yet, our court does 4 cases every Tuesday, Wednesday, Thursday and Friday (if you are number 5 or 6 or 7 and so on you gain a preferential position the next day), but I need to do it next week to prevent a full charge.

The OR Enquiry Line has stated the technical manual says the main res property will ne vested due to large negative equity.

The plan is, further down the line, is to approach the lender because the property will have a lesser value (fact) and the lender will have written it down (banking practice, shareholders to please etc). In essence take out the current lender with a reduced settlement figure and have someone else step in with another mortgage (or cash but that is wishful thinking).

I cant see the lender getting 100% of the mortgage back, realistically 60 odd %, it was done in the crazy days of self cert and high valuations.

The current mortgage is a tracker, one day interest will rise and cripple us.

Hope this makes it clearer.

Thrugelmir

tmb70 wrote: »

I cant see the lender getting 100% of the mortgage back, realistically 60 odd %, it was done in the crazy days of self cert and high valuations.

So you overstated your income originally? Not a position of strength to negotiate from.

Why has the house lost 40% of its value?

silvercar

If this house is in negative equity and you have large debts personally, wouldn't it be easier to let this property go? Go bankrupt to be rid of all your debts, the personal guarantee and any negative equity.

Then your wife could buy a different property - with no negative equity.

tmb70

thrugelmir, why? shall i ask sir fred shred (RBS) - the house has gone down due to market conditions

tmb70

silvercar, this is an option that has been discussed, thanks.