Secured loan/house sale after BR

jenijen27

Hi
I wonder if anyone can offer any advice?

I separated from my husband (and later divorced) in 2008, since then he has paid the joint mortgage and secured loan.
I went bankrupt in 2011 and was discharged 12 months later.
We are now selling the house and have an offer. The sale will pay off the mortgage but will leave the secured loan outstanding. My ex is prepared to carry on paying it once it changed to an unsecured loan.
The loan provider is sending me a shortfall assessment and want details all my expenses.

Should I complete this form? Am I liable for the shortfall (I thought once unsecured it would fall into my BR). I am wary of signing anything as I remember reading somewhere that it would admit liability for a new debt.

Thanks

fermi

If you have not signed anything since your discharge agreeing to be liable, then it remains a bankruptcy debt. Your liability to pay it falls into your BR.

http://forums.moneysavingexpert.com/showpost.php?p=63168439&postcount=3

jenijen27

Thank you Fermi

Should I complete to income/expenditure form they are sending me? They are aware of the BR but saying I HAVE to complete it

fermi

Are they refusing to allow the sale to go ahead unless you do?

TDSO

Hi jenijen27

My instinct would be not to complete it. It's no longer anything to do with you. The only exception would be if you happen to be living in the same household as your ex-husband, which is unlikely. Your ex-husband is on his own.

jenijen27

Thanks Fermi and TDSO.
Sorry for the delay in replying. It's my instinct too, to not complete the forms....

But, if I don't complete the forms they won't allow the sale. If I don't complete every item on the form or supply every bit of evidence (payslips, bank statements etc), then 'the application will be returned with no further consideration'

There is a BR section in the FAQ part - I have copied it below:
Q: If a borrower is in an IVA or Bankrupt does a shortfall application still have to be completed
A: Secured loans are not included in IVA's or bankrupcies so the shortfall application needs to be completed however the Voluntary Chrging Order & Direct Debit mandates do not need to be completed. If the account is a joint account and only one borrower is in an IVA or bankrupcy the solvent borrower must complete and sign The Voluntary Charging Order and Direct Debit Mandate.

So, if I'm reading this corretly then they still want me to sign everything as I am no longer BR due to being discharged?

The 'Voluntary Charging Order' is something I really REALLY don't want to sign. It's a letter to the loan company from 'me' with points such as:
'We may in the future purchase a new property and agree to grant a charge over the property'
'We consent to a voluntary charge over the next property'
'We will not inform any third party of the terms of this arrangement, or any part of if'
'In the event of any windfall through legacies, bequests, wins etc the funds will immediately be payable to XXX to repay in full. Any funds available after full repayment will be returned to us'

Is all this normal?

fermi

As it says there, you DO NOT sign the voltary charging order letter that has all that on it.

You DO NOT complete or sign the DD mandate.

You DO NOT sign anything else that says you are liable.

On filling in just the I&E to get the sale through, I'll ask a couple of people if they can pop on and comment on that.

Hang fire....

jenijen27

Thanks Fermi

So did I misunderstand the letter? I assumed 'Bankrupt' would only apply until discharge? I thought as I have been discharged i am now solvent so have to sign it?

I've been trying to get the house sold for 7 years, I don't know what I'll do if it all goes wrong because of this :-(

fermi

Sounds badly worded, and should really be "are or have been bankrupt". I would hope anyway.

Anyway, no matter what, you MUST NOT sign the voluntary charge letter or DD mandate. If that results in them refusing the sale, then that is just tough.

debt_doctor

Hi,


Filling out an I&E on it's own is harmless to you, as you are not responsible for the shortfall anyway.
You must not sign anything else - if they really persist, I would be making known to them that a pre condition that is designed to circumvent Insolvency Legislation is an unfair term (whether consumer credit act regulated or not) and you will make a complaint to the regulator.
DD

fermi

Thanks DD.