Complicated one

Wills1212

i was made bankrupt due to a failing business around 6 years ago now, I have been through it all and out the other side, but during these six years I have also split from my expartner


we had a house together and there is a charging order for my equity in the property, but there was also a "second mortgage" to HSBC with a value of 9k outstanding, I have not been paying this as the amount was allocated in the original charging order to exclude it and allow the value to be removed from the house before the charging order is applied


but recently HSBC decided to sell this debt on and now the new owners of the debt are hounding me to get it


I have told them its allocated for them when the property is due to be sold, in around 18 months time, but they are threatening to take me to court and apply a ccj which obviously I would rather prefer to avoid as I am trying to rebuild a normal life again now,


so I guess my questions are what are there legal rights are they getting ancy as the statue of limitations or what ever its called is getting close, I was paying after the bankruptcy whilst living with my ex just stopped when we split as, if I was to pay it off then the amount of my charging order would grow, so it made sense to leave it.


This was all as a personal guarantee for a loan on a limited company and there was liability of me and a partner but my partner has also left for Australia and now lives there so they are just chasing me, also my ex-partner also signed as a guarantor as did his, so in effect there were four people guarantying it and they are only chasing me, so really would like to place this behind me I have offered them a payment of 2.5k as I felt I was only liable for that amount technically, but that didn't wash and they wanted like 8k,


I am in a bit of a hard spot as this would be great to put behind me


any help greatly appreciated, not looking for judgement its been a hard time I'm through it now just trying to tie up loose ends

tigerfeet2006

I think the reason they are chasing you is they know when the house is sold the debt will fall into the BR and you don't have to pay a thing. They are trying to get it out of you now so you are not aware that this can happen. If they try for a CCJ you would defend it with the fact you are BR.

I think I'm right on this, if I'm not I am sure someone will correct me.

CKhalvashi

tigerfeet2006 wrote: »

I think the reason they are chasing you is they know when the house is sold the debt will fall into the BR and you don't have to pay a thing. They are trying to get it out of you now so you are not aware that this can happen. If they try for a CCJ you would defend it with the fact you are BR.

I think I'm right on this, if I'm not I am sure someone will correct me.

My understanding is that secured loan wouldn't fall into the nature of BR, unless there is a shortfall on sale and the house hadn't been remortgaged since then.

If unsecured, you are right.

Fermi will probably be here to give the correct advice

naseer5

My comprehension is that secured advance wouldn't fall into the way of BR, unless there is a deficit marked down and the house hadn't been remortgaged from that point forward.

On the off chance that unsecured, you are correct.

Fermi will presumably arrive to give the right guidance

"We felt that everything the Soviet government let us know about free enterprise was an untruth. Envision the stun when we found that every last bit of it was totally genuine."

Wills1212

Hi it was secured when with HSBC and they have bought the debt from HSBC but never received any information from them renaming the charge, this amount was allocated by the br on the house so when the house is sold it will go to HSBC or I presume now the new owner of the debt.


Now obviously If I was to agree a figure to repay to them reduced in value then I would benefit from more equity when the house was sold, but also if the charging order has gone up to the point where there is no equity for me then it seems pointless to pay it.


its a difficult situation to figure out exactly, and im unsure of what the best course of action to take would be, can they take me to court for a ccj when I have advised them the figure had been allocated to them when the house was sold, and had made HSBC aware of this and they had frozen the debt, I had previous companies chase this before and all just give up when seeing I was bankrupt had no assets so legal action seemed frivolous, I now would just like not to get a ccj this late In the proceedings, I do think that no payment has been made on the account for a long time so they may be increasing pressure for this and wanting to keep the debt alive so to speak

debt_doctor

Hi,
The rights of a secured creditor are unaffected by bankruptcy - they have a right to re possess the property after satisfying the court that this should happen. I'm assuming this began as a secured debt rather than starting as an unsecured loan and then obtaining a Charging order following a CCJ?
I'm a bit confused when you say "there is a charging order for my equity in the property" and "I have told them its allocated for them when the property is due to be sold" - Isn't this a charge in favour of the OR for your beneficial interest, as, if so, the money will be going to the Insolvency Service to distribute to your unsecured creditors - not given to HSBC.
If I have any of your story wrong then please let me know.


Also you mention the statute of limitations which normally prevents court action on a debt when 6 years has passed since default or the last acknowledgement / payment. However, as this is a land based debt the limitation period is 12 years, so it appears that you cannot rely on such a defence.
DD

Wills1212

debt_doctor wrote: »

Hi,
The rights of a secured creditor are unaffected by bankruptcy - they have a right to re possess the property after satisfying the court that this should happen. I'm assuming this began as a secured debt rather than starting as an unsecured loan and then obtaining a Charging order following a CCJ?
I'm a bit confused when you say "there is a charging order for my equity in the property" and "I have told them its allocated for them when the property is due to be sold" - Isn't this a charge in favour of the OR for your beneficial interest, as, if so, the money will be going to the Insolvency Service to distribute to your unsecured creditors - not given to HSBC.
If I have any of your story wrong then please let me know.


Also you mention the statute of limitations which normally prevents court action on a debt when 6 years has passed since default or the last acknowledgement / payment. However, as this is a land based debt the limitation period is 12 years, so it appears that you cannot rely on such a defence.
DD

its hard to explain at the best of times,


I had a standard mortgage and then had a so called second mortgage against the house for the original hsbc loan was 40k now 9, when I went through br, they left 9k of equity when calculating the equity for the official receiver to put his charge on the remaining equity


so basically im trying to figure out the best course of action to take, I would offer them a nominal payment to keep the account active but barely reducing until the house is sold, think this might be the best course of action as they will receive the balance when the property is sold.

debt_doctor

Wills1212 wrote: »

I had a standard mortgage and then had a so called second mortgage against the house for the original hsbc loan was 40k now 9, when I went through br, they left 9k of equity when calculating the equity for the official receiver to put his charge on the remaining equity

I'm genuinely trying to help but I cannot make sense of the above paragraph.
Is it the case that;

• When you went bankrupt you had a mortgage (1st charge lending) AND a further secured loan with HSBC (2nd charge lending).
• During your bankruptcy, the OR defined your beneficial interest in the property at £9k (the remaining equity after taking in to account the 1st and 2nd charges) and obtained a charging order (3rd charge) for £9k (plus statutory interest at 8%)

I do not understand this; "....and then had a so called second mortgage against the house for the original hsbc loan was 40k now 9...."


It either was a second (charge) mortgage or it wasn't? - what original HSBC loan? and how did it reduce from £40k to £9k?
DD

Wills1212

debt_doctor wrote: »

I'm genuinely trying to help but I cannot make sense of the above paragraph.
Is it the case that;

• When you went bankrupt you had a mortgage (1st charge lending) AND a further secured loan with HSBC (2nd charge lending).
• During your bankruptcy, the OR defined your beneficial interest in the property at £9k (the remaining equity after taking in to account the 1st and 2nd charges) and obtained a charging order (3rd charge) for £9k (plus statutory interest at 8%)

I do not understand this; "....and then had a so called second mortgage against the house for the original hsbc loan was 40k now 9...."


It either was a second (charge) mortgage or it wasn't? - what original HSBC loan? and how did it reduce from £40k to £9k?
DD

HI the original second charge was for 40k but I had been paying it when the company was running the remaining balance is 9k


sorry if it was confusing


but yes main mortgage 200k second mortgage 9k remaining but originally 40k and or has a charging order of 24k with a 8% per year increase, its a complicated situation for certain

debt_doctor

Wills1212 wrote: »

HI the original second charge was for 40k but I had been paying it when the company was running the remaining balance is 9k


sorry if it was confusing


but yes main mortgage 200k second mortgage 9k remaining but originally 40k and or has a charging order of 24k with a 8% per year increase, its a complicated situation for certain

Thanks for clarifying the above.
Ok, so the OR has a charge for the beneficial interest as I presumed, which, whenever the property is sold will be released to pay the bankruptcy costs and some money for the unsecured creditors in your bankruptcy. However, the mortgage will get paid first, then HSBC and the OR will get paid up to the level of his charge depending upon what is actually left.


The second secured (HSBC) whom you now owe around £9k to has been sold to a new collector / owner. As this loan remains secured, it is (at this point) not part of your bankruptcy so any enforcement action can continue. The usual 'action' of a secured creditor when they are not being paid is to take possession of the property - are they saying that is what they are going to do or are they suggesting other enforcement methods?




More questions I'm afraid:
Who now lives in the property - You? - your ex - or no one?


Is there any plans to sell the property anytime soon either forced or voluntary?


DD

silvercar

If there is no equity in the property, why are you making repayments on this loan? If you are not getting anything out of the sale there is no benefit to you in making capital repayments.

When you say the property is due to be sold, is this because you want to sell up or is this a debt option?

Usually secured loans are sold on for less than the outstanding loan. So the new lender has not paid anything like what you owe. Bear this in mind when negotiating. IMHO, if you are selling up soon, you would be better off not paying any capital off this loan - let them take it all from the sale.

One further question. Does the OR have a charge for a specific amount (+interest) or does the OR have the beneficial interest?

I'm just trying to establish if you are likely to see anything of the sale proceeds, because if not then your payments should be only for the interest - if your lender can be persuaded. No point paying capital if you won't see any of it and any overall shortfall will be swalloed up by your previous bankruptcy.