Worried about increasing house prices :-(

watcher27

debt_doctor wrote: »

I agree, everything about BR is individual.

Weren't they writing to you separately asking for the monies?

DD

Sorry, just seen your replies!

We thought we were treated as a whole, and the OR didn't mention we were treated individually (regarding the house) when I made my initial enquiry about purchasing the BI. If it wasn't for this forum and the generous people in it, I wouldn't even know I could purchase the BI!

The first we knew was on Friday when the two individual letters arrived, one for me asking for £1K plus £211 fee and the other for my wife asking the same. The mention if we both buy the BI then only one £211 fee applies.

So, if I'm understanding you & alastairq correctly, we would need to have £10K equity EACH in the property at the 2 year 3 month' stage before a charge would be applied???? So the house would need to have £20K of equity in it? (currently still in negative equity)

debt_doctor

watcher27 wrote: »

So, if I'm understanding you & alastairq correctly, we would need to have £10K equity EACH in the property at the 2 year 3 month' stage before a charge would be applied???? So the house would need to have £20K of equity in it? (currently still in negative equity)

No, that is not correct.

For EACH of you, if you have between £1k and £10k beneficial interest in the property, then if the OR cannot find anyone to purchase that interest then they will apply for a charge for any amount between £1k - £10k. So the PROPERTY could have up to £20k in it for a charge to be appropriate.
The reason they do this is because at an equity level of up to £10k, an Insolvency Practitioner (IP) would not generate enough income for themselves if they were to manage the sale of the property.

If at the period 2 years 3 months when the OR evaluates the property again, there is an interest of between £1k and £10k per bankrupt person then they should begin the process of obtaining a charge.

If there is over £10k interest for any bankrupt then the property is likely to be sold.

If there is little or no equity at 2 years 3 months then the process should begin to revert the property (give back) to the bankrupt.

DD

watcher27

debt_doctor wrote: »

No, that is not correct.

For EACH of you, if you have between £1k and £10k beneficial interest in the property, then if the OR cannot find anyone to purchase that interest then they will apply for a charge for any amount between £1k - £10k.
The reason they do this is because at an equity level of up to £10k, an Insolvency Practitioner (IP) would not generate enough income for themselves if they were to manage the sale of the property.

If at the period 2 years 3 months when the OR evaluates the property again, there is an interest of between £1k and £10k per bankrupt person then they should begin the process of obtaining a charge.

If there is over £10k interest for a bankrupt then the property is likely to be sold.

If there is little or no equity at 2 years 3 months then the process should begin to revert the property (give back) to the bankrupt.

DD

Your a star, thank you so much for explaining all this to me

I got my hopes up earlier, but it looks like we will have to knuckle down to get that money together and then that will be it over & done with!
There will definitely be equity in the property in 4 months time.

I'm still none the wiser on what this "charge" thing actually is?

But as we are going to buy the BI, it's irrelevant.

Don't know how I would have got through this if it wasn't for yours and other forum members help, so thank you once again :beer:

alastairq

BAsically, a 'Charge' is a formal registration of interest in a property's value, or equity.

In effect, it is a secured debt.

The mortgagor has the first 'Charge' on a property.....with subsequent secured creditors following behind.

SO if a house is subsequently sold, the sale price is used to pay off any mortgage [first charge], then, whatever is left pays of any other 'Charges' recorded on the property.......finally, the owner gets what's left!

Charges are applied for in Court..and recorded at the Land Registry against that property.

watcher27

alastairq wrote: »

BAsically, a 'Charge' is a formal registration of interest in a property's value, or equity.

In effect, it is a secured debt.

The mortgagor has the first 'Charge' on a property.....with subsequent secured creditors following behind.

SO if a house is subsequently sold, the sale price is used to pay off any mortgage [first charge], then, whatever is left pays of any other 'Charges' recorded on the property.......finally, the owner gets what's left!

Charges are applied for in Court..and recorded at the Land Registry against that property.

Riiiiight, got that 100%, thank you.

So, is there a set percentage of this charge? I know DD said 8% a year, but 8% of what, the amount we went BR for??

And with this charge, would a sale ever be forced on us? Even if we stayed here for the next 20 years? (hypothetically)

arcon5

watcher27 wrote: »

Riiiiight, got that 100%, thank you.

So, is there a set percentage of this charge? I know DD said 8% a year, but 8% of what, the amount we went BR for??

And with this charge, would a sale ever be forced on us? Even if we stayed here for the next 20 years? (hypothetically)

The charge wouldn't be a percentage - it would be a fixed sum. The 8% is simply interest the creditor can charge each year. In this case the creditor being the receivers office.

debt_doctor

Lets say that YOUR interest (or your share of the profit in your house) was deemed to be £5000.

At that point YOU would owe the OR £5000, which is now a secured debt by the charge.

At the end of the 1st year you would owe £5000 plus 8% = £ 5000 + £400 = £5400.
2nd year £5400 plus 8% = £ 5832.
3rd year £ 5832 plus 8% and on until you pay off the charge by selling the property.

You will see that the amount owed can soon mount up.

The OR so far has not developed a policy of forced sale.

DD

watcher27

Thanks so much again for your help!

Managed to get the required £2211 together and have handed it in to our local IS office, who have now started the process! :beer:

catherinerose

hi, new post but related to beneficial interest. hope one of you guys can help and explain.


me and my hubby went bankrupt in nov 2011. we asked to buy back the BI in march 2012 as our property is our main home and very suitable for one of our sons who has special needs. we got our valuation and mortgage statement for this and sent off. the value of the house was appx 6K in negative equity. we didn't hear back from the OR and chased them for a response an what our outlay may be in april 2012. we heard nothing back for them re the BI but got sent the restriction J paperwork.
1. 2yrs3months later we are being asked about the BI. we do not understand why we heard nothing back from 2012 and why the OR didn't deal with the BI then.
2. we are being offered the BI again (so another valuation and mortgage statement). The value is now over our mortgage amount (value £155000 o/s mort £154826.53). we are unsure now what will happen and how much in total we will need to pay the OR.
any advice, info etc would be helpful. Thanks