Buying A House Were the owner has debts?

marbar2k

Hi, we are in the middle of buying a house. The solicitor has just received the contact but has informed me there is alot of debts on the deeds of the house.

He said there is things on there from Marks & Spencer, R10 Finance and a restriction to notify the trustee and bankruptcy service on sale.

He said these will obviously be cleared with the sale proceeds, but is unsure if i will struggle to get future credit at the address as it may be blacklisted??

Is this the case, can i do anything? I dont want to walk away from this house but I also dont want to never be able to get credit in the future.

Phil3822

As far as I am aware there is no such thing as black listed anymore. When you purchase the property your mortgage company will have the charge on the property. The sale of the property should clear these other people who have an interest. It appears as if the seller has gone bankrupt and is selling. Others with more knowledge may be along soon.

Tixy

Addresses are not blacklisted. Your credit file is personal to you as an individual.

(in the very unlikely event you had the same name and birth date as one of the current owners you'd probably have issues).

G_M

Change solicitor!

He should know that credit files apply to people, not property.

Provided all the Charges on the Title document are cleared at or before Completion, there should be no problem (though you may have the inconvenience of debt collectors coming to the door to try to find the previous owners. Just keep ID/copy Title near the door to show them, explain, and send them on their way.

ic

To me it sounds like the solicitor is talking about loans secured against the property, rather than what outstanding/unpaid debts are showing on the vendor's credit record. Perhaps he's selling the house to pay them off?

As above, debts won't come to you, though don't be surprised if you get letters from debt agencies chasing the vendor at the last known address. You will not be responsible for the debts and nobody can enter the house in pursuit of them. Just return-to-sender anything that arrives.

kingstreet

Credit belongs to people, not houses.

A debt belonging to the previous owner of your home will not show up on your credit file, so it cannot harm you.

Louise.H

The debts go with the people and do not apply to the address. The previous owners of my new home were in debt with everything you could think of and has had no affect on my ability to get a new credit card.

Return all the mail to sender saying "no longer at address". I am surprised at your solicitor worrying you with this when it is incorrect information.

marbar2k

Thanks for all the replies, just spoke to the senior partner at the solicitors and he gave me the exact same replies.

I must have misunderstood what the other partner was saying. He just wanted me to be aware of the debts.

Richard_Webster

It's the seller's responsibility to clear all these off to pass you a good title.

However, it does happen that they haven't done their sums and just before exchange of contracts the seller's solicitors check the figures and tell their client he isn't going to have enough to pay off all the debts.

So it would be sensible for your solicitors to press them to do the sums now and provide some reassurance that they have gone into it all and there will be enough - otherwise the sale will be delayed or might abort completely if the seller can't pay them all off.

jackomdj

Also you may receive letters chasing debts etc. The people we bought from moved to Australia and we got several letters for outstanding debts. We phoned a couple and they said it was relatively easy for them to check the house was no longer owned by them and to start chasing them down!