BI in property - What is 'Next Step'?

Mike_St_Helens

rog2 wrote: »

Cheers Mike,

Yes I was made BR a couple of weeks before you - surprising that they have taken six months to write, although they DID write, initially, to state that they considered the house as part of my bankruptcy estate.

I am also interested about the legal position - I did ask CAB, before BR, but they were unsure, they did say that the OR may chase my wife to see if she would purchase my BI, but that she would be under no obligation to do so. I had assumed, from reading other posts, that the trustee would probably put a charge on the house, so that he got my BI when we eventually sold the house.

- maybe I need to speak with a Solicitor.

Ive vaguely heard about the charge on the house thing... Would you be happy if thats the stance they took?

Mike_St_Helens

silkglade wrote: »

Your Wife will get her full 1/2 share of the equity once all fees etc have been paid. that was what the ex got

Its a bad deal that the other share holder has to stump up fees though...(Via whats lefter after sale)

silkglade

Hi Mike

To be honest the OR does not really like putting charge's on houses, they prefer to get the matter finished with rather than drag it out. Easy for them to say as they are not the ones that are potentially going to be homeless. I was told, though it was years ago and things change loads, that it is not really an option as otherwise the bankruptcy will not be finished with so to speak

Mike_St_Helens

silkglade wrote: »

Hi Mike

To be honest the OR does not really like putting charge's on houses, they prefer to get the matter finished with rather than drag it out. Easy for them to say as they are not the ones that are potentially going to be homeless. I was told, though it was years ago and things change loads, that it is not really an option as otherwise the bankruptcy will not be finished with so to speak

I can see where your coming from. Surley there must be some protection for the'unbankrupt' share holder though?

I looked into getting some form of legal advice about the house and I could not find any solicitor that either knew about procedures in depth or was willing to act on my behalf.

silkglade

The OR gets the full amount of equity from the Sale, deducts the fees and then they split it, sort of like those who go through a divorce i think, basicly they both lose 1/2 of the fees each.

Addicted2Chocolate

what other posters have said is right, if she does not consent the Trustee will apply to the court for an order for possession. It is my understanding the court will normally grant such an order if the applicant can show they tried to take action without court but the non bankrupt party woudl not co-operate. Of course the trustee must have a way of forcing action, otherwise all jointly owned proeprties could be protected by the joint owner refusing to sell!

Richard_S

rog2 wrote: »

I have, this morning, received a letter from my Trustee, regarding my Beneficial Interest in the house that I 'own' jointly with my wife.
The letter states that:
'It is my duty, as Trustee, to get in, realise and distribute the bankruptcy estate using, subject to legislation, my own discretion.
In the first instant, I invite you and your wife or a third party to make a reasonable offer to purchase my interest in the property'

It details my BI to be £79,000.00, based on search results of similar properties sold in the area.

The letter goes on to say:

'However, if you are not in a position to proceed on this basis, I seek the mutual consent of you and your wife to formerly market the property for sale, thus avoiding the unnecessary expense of me having to institute Court proceedings, which will only be taken as a last resort. I must insist that I have conduct of the sale and I will provide you with a suitable undertaking. Assuming the property is jointly owned, I will account to your wife on completion.'

'The property must be sold with vacant possession and, in the circumstances, you may wish to contact your local housing authority.'

My main questions refer to the 'mutual consent'.
What happens if my wife refuses to agree to a sale?
Is there any way in which she can be forced to agree?
Can we be evicted when my BI equates to only 50% of the equity?

We are not in a position to make any reasonable offer to purchase my BI, as I have been unemployed, without any benefits, for the last year (I have just started a temporary job, but this may only last a few weeks) and my wife will lose her job in November, when the hospital closes (Thanks Tony:mad: ).

I would welcome comments/suggestions from those who have been in this position.

Thanks,
Rog2

Hi Rog,

We haven’t been in exactly the same position but a similar one and I have had first hand experience dealing with the O.R and their agents with regard to the disposal of property. I’m familiar with your circumstances and I think the following is correct:

1. You don’t have a mortgage or only a relatively small one
2. You don’t have children of an age that requires one of you to be at home
3. Your wife’s credit rating hasn’t taken a hammering
4. You’ve never defaulted on a mortgage or missed a mortgage payment

With regard to your questions, if your wife refuses to agree to a sale they will seek repossession which in effect answers the second question, so yes if a repossession order is granted you’ll be evicted.

The question of the repossession order being granted though is the potential key to solving the problem. The O.R/Trustee will have the house valued and they won’t seek to achieve a top book valuation, they value a property at a price that will achieve a sale in a reasonable period. They will also take into account the costs of marketing, selling and legal fees, so the figure of a £79k B.I is certainly going to fall.

As the letter states, you also have the right to have the house valued by local estate agents who have a better idea of local market conditions. This gives you the opportunity to have it valued by all the agents in your local Yellow Pages and to choose the lowest three as your valuation. Your best interests are served of course by doing whatever you can to drive down the valuation and therefore your B.I.

I appreciate that your employment prospects are not encouraging at the moment but is it reasonable to assume that within a six month period you could both be holding down full time, permanent jobs?

My approach would be to initially agree a valuation with the O.R/T and then propose that you have no interest in moving from the house, but will in the foreseeable future be in a position to secure a mortgage that will enable your wife to purchase your B.I. If you get the B.I down to £70k, and you may well be able to get it even lower, then a £70k mortgage for a couple who are both working is an eminently achievable goal, especially with your wife being somewhat younger than you.

If the O.R/T agrees to this then you obviously have a lot to do but it does seem achievable and if they disagree they’ve still got to persuade a judge that your proposals are unrealistic which I don’t think they have a “cat in hells” chance of doing. We were in court recently, after not having made a mortgage payment for over a year with arrears of approximately £7.5k and despite our obvious concerns beforehand there was no possibility of the Judge approving a repossession order. He asked a few general questions and accepted our explanations and proposals and suspended the order; I love our liberal minded judiciary.

I hope this helps and nothing I’ve said is based on speculation, it’s been our experience and from the conversations we’ve had with the people who deal with this side of bankruptcy. I would definitely seek legal advice and unless you’ve got a combined income of £24k (can’t remember exact figure) or more you’ll qualify for legal aid. Reading you post once again reinforces my undisguised contempt for the “bankruptcy is too easy” brigade; the strain this sort of thing puts on people and their relationships is sometimes unbearable.

Rich

rog2

Richard_S wrote: »

Hi Rog,

We haven’t been in exactly the same position but a similar one and I have had first hand experience dealing with the O.R and their agents with regard to the disposal of property. I’m familiar with your circumstances and I think the following is correct:

1. You don’t have a mortgage or only a relatively small one
2. You don’t have children of an age that requires one of you to be at home
3. Your wife’s credit rating hasn’t taken a hammering
4. You’ve never defaulted on a mortgage or missed a mortgage payment

With regard to your questions, if your wife refuses to agree to a sale they will seek repossession which in effect answers the second question, so yes if a repossession order is granted you’ll be evicted.

The question of the repossession order being granted though is the potential key to solving the problem. The O.R/Trustee will have the house valued and they won’t seek to achieve a top book valuation, they value a property at a price that will achieve a sale in a reasonable period. They will also take into account the costs of marketing, selling and legal fees, so the figure of a £79k B.I is certainly going to fall.

As the letter states, you also have the right to have the house valued by local estate agents who have a better idea of local market conditions. This gives you the opportunity to have it valued by all the agents in your local Yellow Pages and to choose the lowest three as your valuation. Your best interests are served of course by doing whatever you can to drive down the valuation and therefore your B.I.

I appreciate that your employment prospects are not encouraging at the moment but is it reasonable to assume that within a six month period you could both be holding down full time, permanent jobs?

My approach would be to initially agree a valuation with the O.R/T and then propose that you have no interest in moving from the house, but will in the foreseeable future be in a position to secure a mortgage that will enable your wife to purchase your B.I. If you get the B.I down to £70k, and you may well be able to get it even lower, then a £70k mortgage for a couple who are both working is an eminently achievable goal, especially with your wife being somewhat younger than you.

If the O.R/T agrees to this then you obviously have a lot to do but it does seem achievable and if they disagree they’ve still got to persuade a judge that your proposals are unrealistic which I don’t think they have a “cat in hells” chance of doing. We were in court recently, after not having made a mortgage payment for over a year with arrears of approximately £7.5k and despite our obvious concerns beforehand there was no possibility of the Judge approving a repossession order. He asked a few general questions and accepted our explanations and proposals and suspended the order; I love our liberal minded judiciary.

I hope this helps and nothing I’ve said is based on speculation, it’s been our experience and from the conversations we’ve had with the people who deal with this side of bankruptcy. I would definitely seek legal advice and unless you’ve got a combined income of £24k (can’t remember exact figure) or more you’ll qualify for legal aid. Reading you post once again reinforces my undisguised contempt for the “bankruptcy is too easy” brigade; the strain this sort of thing puts on people and their relationships is sometimes unbearable.

Rich

Thank you Rich - I really appreciate your post as it is based on first hand experience.

I have been a bit low (understatement) today and haven't been on much as I have been 'brooding', but I can definitely see some positive suggestions in your post.

I do have a 30 year old son, who lives with us. He is on a fairly low income, but we will look into the possibility of him buying my BI.

I don't think that I would get a mortgage at the moment - not having been in paid employment for the best part of a year, and not even receiving jobseekers allowance. I have started a job this week, but it is only temporary and will probably be finished in another two or three weeks. I am, of course, still looking for more permanent employment, but going on recent experience nothing can be guaranteed.

However, I am heartened by your experience - I will be seeking legal advice.

The trustee has given me until the end of May to respond, so hopefully this will give me enough time to explore all possibilities.

Thanks again Rich.

rog2

Mike_St_Helens wrote: »

Ive vaguely heard about the charge on the house thing... Would you be happy if thats the stance they took?

Not sure if happy is the word, but it would certainly make more sense. The Trustee would have more to gain, as interest is usually added, and we would still keep the family home.

Also I feel that it is grossly unfair to make my wife suffer for something that was not her fault.

rog2

Addicted2Chocolate wrote: »

what other posters have said is right, if she does not consent the Trustee will apply to the court for an order for possession. It is my understanding the court will normally grant such an order if the applicant can show they tried to take action without court but the non bankrupt party woudl not co-operate. Of course the trustee must have a way of forcing action, otherwise all jointly owned proeprties could be protected by the joint owner refusing to sell!

But why should my wife be made to suffer for something over which she had no control whatsoever?