Beware - they never forget.

Richard_S

Erikin wrote: »

You guys have no doubt had a rough deal because of going bankrupt pre 2004. Thankfully, the benefit post 2004 is the period of trustee interest has been capped at 3 years so your experience won’t repeat itself.

Hi Erikin,

What the O.P was drawing attention to is that if you haven't dealt with the equity in the property by the end of the third year then the O.R can put a charge on the house which gives him an indefinite timescale to recover principal, interest and costs.

As you say, good advice is a must if you have assets.

Richard

Erikin_2

Hello Richard. Yes the 3 year rule has exceptions (see my message no 4 above), but the trustee won’t be coming out of the woodwork 12 years later. You will know how you stand within the 3 years.

Fully agree about getting good advice where assets are involved.

davelacey

Richard_S wrote: »

What the O.P was drawing attention to is that if you haven't dealt with the equity in the property by the end of the third year then the O.R can put a charge on the house which gives him an indefinite timescale to recover principal, interest and costs.

@Erikin.
Hi.
That's if there is anybody who can buy out the bankrupt's beneficial interest.
There are those who have no-one, therefore are scuppered.

@Richard
The same applies if the O.R. himself hasn't dealt with the property by the end of the third year. He slaps on the charge, then has 12 years to deal with your BI, happily accruing interest for you along the way. Of course - if he hasn't dealt with it in 12 years - one would assume it would revert back to the bankrupt.
There's no information on this that I can find, so maybe they overlooked it. :rolleyes:

davelacey

Ok let's put a time-line and precis what's happened.

December 1996: Declared Bankruptcy through the court - figure agreed £17200.64 (I love the "64p" :rolleyes: )

Next communication from OR: Early March 2007 - informing me that they were applying to the courts to have a "charge" placed on my property for the said amount.
Also informing me that said figure will accrue interest at 8% per annum for 12 years - the amount of time they have to "deal" with, i.e. sell the property.
Also informing me that they weren't "forcing" me to sell the property. :rolleyes:

*maths time*

8% of £17200.00 (I sent them a postal order for the 64p) = £1376.00

£1376 x 12 (years) = £16512

So, after 12 years, I shall "owe" the OR £33712.00 :eek:

Not a bad return on a debt of £17200, wouldn't you say?

I guess I'm lucky that my bankruptcy figure is so small.

Nice to see that the *Sinsolvency Service* are living up to their maxim of "helping" people.

:rolleyes:

Sooty0404

Hi Dave

'So, after 12 years, I shall "owe" the OR £33712.00'

I don't want to depress you any more than you are already but with compound interest I think you will find this figure is more like £43,000 after 12 years.
In my very first post on this forum I outlined how my brother borrowed £40,000 secured on his home. When the debt was called in 10 years later the figure had risen to £101,000.
You have one large weapon in your armoury and that is the amount of equity in your home. My suggestion would be that your wife offers to buy out your bankruptcy at say, 50p in the £1 and remortgages the house in her name to raise the extra money. With that amount of equity and taking into account the loan to value, I doubt that she would be refused.
Even if the OR refuses you can negotiate upwards but your creditors may decide that 50% NOW is better than 100% in 2019. I know I would.
Whatever the figure it will never be cheaper than it is today.
The problem with bankruptcy is that the file will never be closed as long as there are assets to be disposed of. I'm assuming that this is the only remaining item left. When I went 'bust'; in the early 90's I remember the OR telling me that they have properties on their books which have tenants holding 99 year leases. They will have to wait until those leases expire before they can dispose of the properties -and they will. Once you have this item sorted out hopefully you can close the book on your bankruptcy and so can the OR. You are locked into this financial merry-go-round at the moment and you have to stop it and get off.
I wish you the best of luck.

Richard_S

davelacey wrote: »

Ok let's put a time-line and precis what's happened.

December 1996: Declared Bankruptcy through the court - figure agreed £17200.64 (I love the "64p" :rolleyes: )

Next communication from OR: Early March 2007 - informing me that they were applying to the courts to have a "charge" placed on my property for the said amount.
Also informing me that said figure will accrue interest at 8% per annum for 12 years - the amount of time they have to "deal" with, i.e. sell the property.
Also informing me that they weren't "forcing" me to sell the property. :rolleyes:

*maths time*

8% of £17200.00 (I sent them a postal order for the 64p) = £1376.00

£1376 x 12 (years) = £16512

So, after 12 years, I shall "owe" the OR £33712.00 :eek:

Not a bad return on a debt of £17200, wouldn't you say?

I guess I'm lucky that my bankruptcy figure is so small.

Nice to see that the *Sinsolvency Service* are living up to their maxim of "helping" people.

:rolleyes:

Dave,

If a bankrupt has assets the O.R can wait for infinity to claim them; it's a fact of life. Whether it's right or wrong is a moral argument not a legal one, if you can't get around it then it's pointless discussing it, just sell and move on; "your first loss is your best loss".

Richard

wherediditallgo

The "permanent OR finger in the pie" is one of the reasons for me going for bankruptcy now rather than in say 12 months' time. I have no assets now that could be sold towards my debts, but I would like to think that I would have my own home in a few years time. I'm never going to get financially straight while I have these debts around my neck, & I'd hate to think of myself in this mess 6-10 years from now but also with a property the OR could take from me.

Going bankrupt now while I have nothing gives me a chance to wipe the slate clean, get into a better spending & saving habit over the 6 years that my credit rating will be a joke, then get an asset & keep it at some point in the future.

davelacey

Just thought I'd add something of an upbeat note here, as I seem to have been using this place as a diary somewhat.

Having spoken yet again to the OR, and been assured that at bankruptcy, all debts were frozen, I decided to try and contact all my creditors from 11 years ago to see what the state of play was.

The results were surprisingly encouraging - if that's the right word to use.

Not only could the banks involved find no records at all - they all informed me that debts over 6 years old are automatically written off, and that no money is owed.

The OR - who I have to say is being extremely helpful - then told me that any debts that are "not proved" i.e. no longer "live", will be deducted from the amount of the charge.

So - for those who became bankrupt in earlier times - a little brighter news perhaps.

Mike_St_Helens

davelacey wrote: »

Just thought I'd add something of an upbeat note here, as I seem to have been using this place as a diary somewhat.

Having spoken yet again to the OR, and been assured that at bankruptcy, all debts were frozen, I decided to try and contact all my creditors from 11 years ago to see what the state of play was.

The results were surprisingly encouraging - if that's the right word to use.

Not only could the banks involved find no records at all - they all informed me that debts over 6 years old are automatically written off, and that no money is owed.

The OR - who I have to say is being extremely helpful - then told me that any debts that are "not proved" i.e. no longer "live", will be deducted from the amount of the charge.

So - for those who became bankrupt in earlier times - a little brighter news perhaps.

Lookin good !!

Thought though, if you admitted the debt, and they put a 'claim' in when it all happened all that time ago doesnt that 'prove' the debt... Hope not.. you could be onto a little known winner here dave !

Mike

davelacey

Mike_St_Helens wrote: »

Lookin good !!

Thought though, if you admitted the debt, and they put a 'claim' in when it all happened all that time ago doesnt that 'prove' the debt... Hope not.. you could be onto a little known winner here dave !

Mike

Hi Mike.
Yes you're quite correct - a claim "at the time" proves the debt. However, because, when I became bankrupt, the equity in my property was very low - the OR took no action. Equity since then has risen substantially - hence the "charge" being slapped on.

But if the debt has since been "written off" - especially written off against tax as in the case of the banks - then that debt no longer exists, and cannot be "proved" when the OR calls a final meeting of creditors shortly after the charge is applied.

Also, in the case where debts have been passed to solicitors and/or debt collection agencies, I've found that a) the debt collection agencies seem to have no records - in which case they can't prove the debt unless they go back to the original finance companies, b) the finance companies themselves can't find any records, c) the debt collection agencies/solicitors themselves no longer exist.

I was advised (unofficially) by the OR that if I wrote a letter to each of the creditors and sent it by recorded delivery, then a)they'd either deal with it if they could, or b) If the letter is returned as "addressee unknown", then this is usually accepted as "debt not proven".

So the bottom line is:

Banks: Debts "written off" after 6 years - cannot be proven after this time.
Financial Institutions other than Banks: Lack of records - debt cannot be proven.
Solicitors/DCAs' no longer exist etc: Again, lack of records - debt cannot be proven.