could some one explain for me please

wicca1

Ok hi all, here's my question ,if my husband has no choice but to go BR, the only asset we have is our house which is in neg equity,I have read through all the good advice on the group and came across this one written below but didn't understand,so please could either the author or some one who knows what this means let me know, thanks in advance


Your BI (beneficial interest) is your share of the house, If you have negative equity the OR will let you buy it back for £1 plus legal costs, This basically means that you remove the house from the bankruptcy

minic

There's quite a good guide from the Insolvency Service called 'what will happen to my home" which explains everything. Here's a link:

http://webarchive.nationalarchives.gov.uk/+/http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/home.pdf

Just a word of warning from my own experience though, I went BR in Feb, my house is in c£40k of negative equity. The OR offered me the chance to buy back my BI in the property although they said I would need to pay £1k + legal costs so I think the £1 offer will largely depend on the OR who is dealing with your husbands case. I decided not to buy back the BI as I believe it is v.unlikely that in 3 years time when the BI will revert back to me that there will be any equity in the property.

I guess your decision (and that of the OR) will depend on how much negative equity is in your property.

wicca1

Tnk you for the link,we have an interest only Mortgage 100k, so we didn't know if it did come down to it would they make us sell.it is in neg equity.had it valued and it wouldn't meet the value about 89k max .

wicca1

I have had a read about BI, and forgive me if I sound a little confused, it says I would have to buy my husbands share ,I understand this but would have to ask my mortgage company if they would agree ? would this mean I have to take out a new mortgage or would my husband and I still continue to pay as we are now? Sorry dont mean to come across as daft .So they let you keep your house was this as it was in neg equity?

minic

There would be no benefit to your husbands creditors in forcing the sale of your house as with it being in neg equity they wouldn't get any money from the sale. Are you wanting to stay in the house? When the OR looks at your incomings/outgoings to determine if your husband can pay into an IPA they will allow the mortgage payments as long as the amount you pay on your mortgage is comparable to what the rent would be for a similar sized property in the area.

minic

The BI is your husbands share of income from sale of the house. In your case as you are in negative equity his BI is currently £0. If the mortgage is a joint mortgage it will stay in both your names with the mortgage company. All the OR does is register an entry with the land registry which means that they need to notify the OR if the property is being sold for instance. You do not need to notify your mortgage company (the OR will write to them to let them know your husband is BR) although as I say the property will stay in joint names.

Yes, I'm still in my property as due to the neg equity there is no value to the OR in forcing a sale.

wicca1

Yes we want to stay, we hope it wont come down to it, but rather than worry his self sick I thought I would ask.He douse not owe any one anything at the moment, He has had a really rough time like many people you find looking of helpful advice on this forum . If I can help find advice to help then I am thank full to all on here . It will all come down to a lease on a shop he shares and if they allow him to leave, If the council chase him for the rent as he would not be able to pay it,so thanks once again for your time and reply

minic

No problem, I hope everything works out for you both. This forum is a great place for advice from those who have experience of BR. If it does come down to looking like BR may be necessary (hopefully it won't) make sure you speak to one of the free debt companies like National Debtline, CCCS or CAB and as someone going through BR myself I can honestly say its not half as scary as you think its going to be.

wicca1

TNX minic -for your advice and all the best for your future