2 years and 9 months into BR and OR wants to release equity

daisymaydaisy

Hello,

I have just received a letter about buying back the beneficial interest on my property after 2 years and 9 months since declaring bankruptcy. I own our family home jointly with my husband, but for some reason he hasn't had any contact from the OR yet.

My interest in the property has been calculated at £8000. (I understand this is half of the overall equity as we own the house jointly).

My question is, if I do nothing in regards to buying back the beneficial interest, what will the OR's next step likely be? I'd have thought that £8,000 wouldn't be worth bothering with a forced sale as there wouldn't be much left after fees from the sale.

Is a charging order the most likely option? And if this is the case will they just keep adding on 8% interest until we decide to sell the property at any point in the future (this is my understanding from the letter). But surely this would take us back into negative equity at some point?

I am just absolutely gutted that this is happening so close to our 3 year deadline when the beneficial interest would automatically be transferring back to me anyway. I understand I should pay off my debts if I am able, but myself and my husband are both on minimum wage incomes since our bankruptcy and if we lose the house then we would not be able to afford rental nearby as it is a lot more than our monthly mortgage payments. We have 3 children at 3 different nearby schools (secondary, primary and nursery) so need to stay close by as we also couldn't afford the travel costs.

I have thought about getting a further advance on our mortgage to pay the £8,000, but again I'm not sure we could afford increased mortgage payments.

I'm wondering if anything will even come out of it with only 3 months to go, as up until now the OR has been very slow in dealing with anything. Has anyone else been in this position so close to the 3 year mark?

longtermplanner

Do you think the property valuation used in the £8k calculation is realistic?

The OR hasn't been slow, it is routine to leave properties until the end of the three year period as they may be increasing in value.

debt_doctor

Hi,

With 8k beneficial interest for the bankrupt, then a charge is likely (below £10k) as such equity would not attract an IP to take the case on. The charge would attract statutory interest at 8% per year.

As has been said, do you think the valuation is correct?

DD

OrangeDuck

I appreciate this post is a bit late for the OP, but it may be helpful to others.

In my partners bankruptcy she was notified about the Beneficial Interest around the 2 years 9 month mark as well. The OR advised that the Beneficial Interest was £40,000 as calculated from the house values from ZOOPLA . We were gobsmacked, there was no way we could afford this. This was much much more than we expected. Then after she had calmed down she noticed that the house valuation the OR had arrived at, valued the house about £50,000 more than it was worth. ( according to our calculations). We knew the OR figure was totally unrealistic.

Blo*dy ZOOPLA had averaged up the house values in a postcode area .. a very large postcode area. She lives on the edge of a small town which is quite high up a government list of Deprived Areas, but the postcode area which ZOOPLA used also covered large detached properties in the nearby countryside with a much higher selling price. So these big posh houses were driving up Zooplas average valuations for the area.

Thankfully in the OR letter it did say that if you disagree with the figure, then you could get three valuations done from local estate agents. This is what we did and thankfully all three valued the house £55000 lower than the OR valuation, meaning she was still in negative equity and the Beneficial Interest reverted back to her.

So if your house is included in the Bankruptcy and you want to stay .. ( there were no payment arrears on the Mortgage ) keep an eye on the local house prices for the duration, this way you have an idea of what the outcome should be. And obviously do not do any decorating inside or outside for the three years, and don’t make the garden look pretty, you need to keep the value down. An old wrecked car in the front garden is quite a good way! She is also first to acknowledge the last few years fall in house prices and subsequent price stagnation have also helped her keep the house. She was very lucky.

So challenge the OR valuation, get your own valuations. Make your house look a mess, do not tidy, make the rooms look small, when the estate agents come round point out the boiler does not work properly, damp problems.. etc.. and ask for a valuation as if you needed to sell tomorrow .. i.e. a very quick sell. This should bring their valuation down by £10,000 straight away.

Another point has just come to mind which may be of interest, when she contacted two of the Estate Agencies she was NOT disclosing that she was BR but that she needed a quick sell.. relationship breakdown etc.. but when they came round to value we ended up telling them and they couldn’t have been more helpful.. because you have to remember she just wants a free valuation and had no intention ( if it could be helped ) of moving out. But we both struggled to get a third company round, We were too truthful on the phone and mentioned bankruptcy, one firm would not come out just to give a valuation where there was no intention of moving. Another company wanted £100 to come out. In the end she reverted back to the relationship breakdown story and someone came out.
[FONT=&quot]One last point.. instead of getting three Estate Agent valuations you were allowed to instruct your own qualified Valuation Officer / Surveyor etc.. we did not have any spare money to take this route.[/FONT]

alastairq

Has anyone tried to use the services of the District Valuer?

The DV is a Government Officer....[who is open to one putting one's argument for a low valuation]...I made use of our DV when in dispute with my Local Authority over the house value....[OK, so it was under a Right-to-buy, but it kicked the Council's ideas into touch in one go]...

Rrushi_Shqiptar

I suppose this is late too, I had IP contact me with less than 3 weeks before the 3yr deadline. A forced sale was made, had an awful experience with a very aggressive IP. Yes there was equity and my wife had hers paid out but I had nothing. in fact after his fees and the home office fees nothing left for the creditors, what a waste of time and blatant daylight robbery. I lost the hse and my family eventually broke up. So plse be careful and watch out. We had no offer to buy the BI in the property. My bankruptcy was dealt with very badly and this showed. The OR adviser was sacked and case load checked unfortunately for me I didn't slip through.