Second Charge on a Property and Bankruptcy

simon39

We declared ourselves bankrupt 5 years ago but were able to remain in our home as we were in negative equity as a result of a second charge. This was given to Lloyds for a business loan of £125,000. We have always maintained our mortgage payments with Halifax but have not paid anything to Lloyds. We get a letter from them every year saying that they will maintain their interest in the property and that we should let them know if we become able to start paying towards the debt which is accruing interest all the time. It is currently at around £140,000.
Our home is still in negative equity of around £80,000...
I have had some advice from an IFA that Lloyds may be prepared to remove the charge if I make them an offer of a one-off payments. I know that I could walk away from the property and the shortfall would be covered by my bankruptcy.
Does anyone know if this advice is a reality? Would Lloyds be prepared to compromise to get something at this stage?

National_Debtline

Hi Simon

It's not beyond the realms of possibility. If I were in Lloyds' position, I would have to weigh up the value of any lump sum you offered me versus the risk of you walking away from the property and consequently me ending up with £zero.

This is not going to be a life-changing sum from Lloyds' perspective, and in theory they can afford to sit tight for as long as it takes your situation to improve. That said, there is still a bottom line for them to consider and I don't think you have much to lose by testing their resolve.

Are you actually in a position to make such a one-off payment? And if so, is it on offer from a third party?

Regards

Dennis @NDL