Can they Make me Homeless after Two and a Half Years?

SivEd

Hi there,

I was made bankrupt back in October 2009 and discharged 2010.

I heard absolutely nothing from the receiver during my bankruptcy and it passed "peacefully" once the initial meetings had completed.

A few weeks ago, I got a letter from the OR offering me the opportunity to buy the beneficial interest in my house for just over £5000. This was two years and four months after I went bankrupt...

I called them and was told that they needed two up to date valuations on my home. The guy I spoke to also said not to worry as at £5,000 I would just have a charge put on my house. It would need to be over £10,000 before they forced a sale. I got a couple of valuations which due to the recession placed my home pretty much as the same value as I paid for it back in 2005.

The problem is that they have written back today telling me that after looking at my valuations, my beneficial interest is now 15,000!

This is a big problem because at £5,000, they would have put a charge on my house, to be recouped at sale time. But at £15,000 they will force me to sell my house and make me homeless.

The thing that confuses me is that they say there is only £135,172.16 "Secured charges" on the house. I have no idea where they have got such a precise figure from. I am behind in my mortgage payments, have been redundant three times in two years and have been to court three times to try and keep the house, all of these things have added to the money I owe the mortgage company (they charge me every time they write a letter and a small fortune when they try and repo my home). I don't yet have an exact figure for how much I owe the mortgage company, but I am pretty sure it's much more than 135k.

I went bankrupt owing 35k (30k to HMRC), but after speaking to the receiver, he told me that HMRC had bumped what I owed them to £40k for a total bankruptcy closer to 50k.

Don't know if it is relevant, but I also had an inheritance payment of over £30,000 that went to the OR last year.

My question is simple. What can I do to keep my house!? This is two and a half years after my bankruptcy. Can they still force me to sell my house?

alastairq

hi.....query the 15000 figure, perhaps?

It might simply be a clerical error?

SivEd

Hi there,

Thanks for the suggestion, I think am going to call the OR on Monday to find out where they got the numbers from.

In the letter they do precisely say: -
Value of property: £150,000 (these were the valuations)
Minus Secured Charges: 135,172.16
Equals Equity: 14,827.84

I have found this post which is what is going on I think.

After two years and three months they re-visit the houses value to see if there is any equity in what was a previously negative equity house.

I suppose the question is still the same, how can I keep my house as at the OR's current valuation, an insolvency practitioner will be appointed to sell the house.

I have to speak to the OR and to the mortgage company to get a proper number on how much I owe on the mortgage. It is one of those dual ones with part mortgage and part secured loan on the property, so not an easy question to answer. But I believe there is more than 135,172 owing so I just have no idea where they've got that number from!

debtinfo

They will have written to the mortgage company and with such a prices figure it is likely that is what the mortgage company has told them.

As to whether they can sell the house, the answer is yes they have the right to do that if you cant come to an arrangement with them,

Do remember though that they start at a figure for what the actual equity is as they have done but sometimes you can negotiate a lower payment, so its not all over yet if you see what i mean.

At the end of the day though if that is what the equity is and you cant make a reasonable offer then they can sell the property, im sure you must have known that was a possibility when you went into bankruptcy

SivEd

Thanks for the advice. I've done a bit of looking up.

Now.. This is where it gets a bit more complicated... I took out a mortgage plus loan in 2005 for £155,000. £140k was mortgage and 15k was secured loan.

I just checked my mortgage statement and as at end 2011 the mortgage had £135,172 outstanding. This is where the OR has got the figure from. So as you say, they have been communicating with the mortgage company.

So where is the secured loan? :think: It is another 10k at least... I am assuming it is still owed as I didn't include it in my bankruptcy. Don't think I could. But I haven't paid it since my last repossession hearing and the mortgage company haven't asked for payments as we have a court order on the amount I have to repay every month. But the money is still owed to them, isn't it?

So yes, I need to call the mortgage company, find out what the amount outstanding on the secured loan is and then speak to the OR to see if that should be included in the "secured charges" on the house...

It's a secured loan so it is, isn't it?

But I am glad this is at least an "opening of negotiations", not sure where a bankrupt is supposed to get 15,000 from. Are there installment repayments? I have finally got another job...

Yes, I knew they would have an interest in the property, and I even knew they kept the interest for three years. But I didn't realise that they would actively be considering forcing a sale two and a half years after the bankruptcy! I had thought they would look at selling the property until discharge after this, maybe a charge on the property. It's the biggest thing they do to you in bankruptcy, so they may as well say you are bankrupt for three years, not one IMO.

Thanks for the info

debtinfo

hi sived,

Yes definitly look into the loan, are you sure it was secured? If so that will help out in this particular situation. To be fair you have been a little unlucky with property and inheritence but unfortunately that is is just the way it works sometimes. You will have ended up paying back a larger proportion of your debts than the majority of bankrupts

silvercar

Now.. This is where it gets a bit more complicated... I took out a mortgage plus loan in 2005 for £155,000. £140k was mortgage and 15k was secured loan.

Generally when you take out a mortgage plus loan at the same time, the loan part is unsecured. A mortgage is just a secured loan, so to take a mortgage plus secured loan would be two secured loans which wouldn't make sense. Certainly Northern Rock's Together mortgage was a mortgage (secured on your property) plus an unsecured loan.

I suspect from what you've posted that the loan isn't secured and formed part of your bankruptcy - even if you didn't mention it. The mortgage figure and the calculation of the equity doesn't therefore need to include the unsecured loan and will be larger than you thought.

silvercar

Is your mortgage repayment or interest only? Interest only would have been far better when you are waiting to buy equity back as any repayment of capital catches you twice - costing you more in monthly repayments and hitting you harder when you come to buy any equity back.

SivEd

OK, more research done.

It is a Coventry Building Society product called a "MOREgage" and you are right the loan element is unsecured.

I'm not having a good day am I!

It is a repayment mortgage (says "Capital Repayment" under mortgage type on the statement), I doubt I could change it, certainly in my attempts to speak to my mortgage company about compromise (pre and post bankruptcy) have always been fruitless and a judge has been required every time.

So it looks like the loan element is not included in the beneficial interest calculation. If this situation hadn't arisen, I would probably have been pleased that the loan got included in the bankruptcy, even if no-one told me!

So I suppose the only thing I can hope for is reducing the amount the OR wants for the beneficial interest to less than 10k and getting that put on as a charge when I sell the house...

Can that be done? Or can the OR be persuaded to put on the 15k as a charge?... I'm trying to keep the house here, it's been a long struggle, but I've still got it!

debtinfo, you are right, I got advice from a bankruptcy specialist who told me not to tell the OR about my inheritance. But I have always simply wanted to pay my debts. What upsets me is that the HMRC debt that sent me bankrupt in the first place is greater than 80% charges. OFT guidelines say that charges for debt should be proportionate and for private creditors they have some sway, but not with HMRC. Before anybody says anything, I don't blame anyone else but me for the situation I am in. But I do also think there are parts of the system that got me here that are plain wrong!

At one stage I thought I might have been able to annul the bankruptcy with the inheritance, but I am at 65% paid off as it stands, with no chance of paying the rest, so the OR has a case, the beneficial interest in the house would take me to almost 100% repaid. More than most bankrupts repay I suspect.

Thanks once again

silvercar

Have you paid anything towards the MORE loan since the date of your bankruptcy? If so that money shouldn't have been paid over as that debt forms part of your bankruptcy and as such is written off in bankruptcy. Any money you have paid to CBS should be attributed to the main mortgage account.

SivEd

Yes, I have paid some monies into the loan account, I paid until about five months into the bankruptcy. Never at any stage did Coventry tell me it was no-longer due when I paid it. But the OR have never sent me a statement saying what exactly is included in the bankruptcy either. As I said HMRC have added another 9,600 to the account without me knowing. Of course in most bankruptcies I guess it is less important and an organisation like HMRC "know the game and how to play it". I do not. I guess they are looking at their 3% payout down the line. But in my case it could be 100% as and when my house is sold down the line, so the amount in the bankruptcy becomes important...

I will ask the OR for some kind of statement when I speak to them tomorrow. The bankruptcy went up 15k without me doing anything, including a loan I shouldn't have been paying it seems.

silvercar, what you said about the repayment of the capital catching me twice slowly dawned on me overnight, that is exactly what will happen, the valuation of the beneficial interest is increased by the amount I have been paying into the mortgage! Therefore they got me coming and going! :mad: But I couldn't have changed the mortgage, and certainly the Coventry wouldn't have been amenable to any negotiating now I know that the loan was included in the bankruptcy.

debtinfo, yes I have been unlucky (and stupid for not paying more attention), but I am a positive person and I am where I am, can't go back. I'll continue trying to keep the house, as I said before, I will call the OR tomorrow.

I am interested in what you said about "sometimes you can negotiate a lower payment"... The question I have is what advice can anyone give me about the negotiation? alastairq has suggested I query the 15,000, but on what grounds?... Is there any other advice about what to say to the receiver to persuade them to either reduce the amount, or to put a charge on 15,000 and not to force me to sell?...

Thanks