Beneficial Interest Question

rb_

Hello,

My wife and I decided to get some help with our unsecured debts last year and through that, I entered a Trust Deed while my wife was advised to go down the path of bankruptcy.

In the last week my wife received a letter from her trustee, which offers options for dealing with some equity they found in the house after a desktop valuation. This resulted in about £8k worth of equity, resulting in them trying to release £4k - with it being a joint mortgage where half is my interest. (Incidentally, I called my trustee with this info and they said they wouldn't even think about going after that little equity)

There are several options presented around selling the house, applying for a buy to rent scheme or finding someone to buy this interest and we're not quite sure what to do next.

We feel that, after costs involving selling to gain a profit of £4k to give to creditors would not be worth the attempt to sell. There is also a £13k secured loan against the property, who we assume would take any equity gained from a sale first leaving the unsecured creditors with nothing from a sale?

We probably can get help to buy this, but we're wondering if we should hold off as our circumstances have changed slightly where we feel we could increase the contributions to cover the entire unsecured debt over the same period of time, rather than the partial written off debt.

In addition, my wife has called 3 time since the letter arrived, but the insolvency company keep saying they would return the calls but have not so far - we're worried about them selling our family house

If anyone can help with some advice around this, as also our circumstances have also changed a little to a point where we feel our contributions over the same period of time would cover all the unsecured debt 100%.

It would be most appreciated... thanks...

Jim

National_Debtline

Hello there.

The secured loan is a second mortgage, as such there may only be viability in what the Trustee is asking if there is equity once both the mortgage and the secured loan have been considered.

Who is the Trustee, if you don't mind me asking?

Also, rather than telephone you should keep all correspondence in writing - so you can keep a papertrail.

Best wishes,

David @ NDL.

rb_

Hi David,

Firstly, thanks for taking the time to respond.

Since making this post, we did get through. The secured loan is considered within that amount, we just misunderstood the letter.

So after mortgage provider and secured lender has been resolved, that leaves around 8k in total. They are going to send out someone to perform an internal valuation. However, we're keeping our fingers crossed because the 170k desktop valuation seems the same as another house in the same street went for this year with an additional bedroom (garage conversion).

We're quite in a mode of panic now. Since the last few months too, our situation has changed which means a debt management plan would have been more appropriate (for round about the same term, and lower monthly arrangement, the creditors would see 100% of the money back)...

I think we're probably done for here if the valuation comes back more than the original accountant determined we had in the house before we entered this process. If we knew we had equity in the house to start with we could have then released it, eased up our situation and avoided Trust Deed and Bankruptcy in the first place. If positive then its a case of arranging someone who can help buy out the interest... but would that be it? Out vehicles for example have been declared and trustee allowed us to keep them, nothing else of value.

Our worry is that losing the house may affect our ability to work too, in my type of work for example relies on being very focused, recently I've been noticing a drop in my own abilities through worrying about this constantly...

Thanks again,
Jim