Repossessed house sold with equity??

jpr_74

Quick question......if a house that I used to own was repossessed and then sold by the lender for more than the value of the debt, then what happens to any equity?

Also, what exactly is said on my credit file?

I was BR in June 2010, and my ex partner (who went BR a year later) lived in the property up until her passing away last year. I declared the house on the BR, but the lender kept my name on the house. They chased me for non payments of the mortgage until repossession in January.

National_Debtline

Hi jpr_74


There are a lot of variables to bear in mind here. One revolves around whether you and your ex-partner owned this property as "joint tenants" or "tenants in common" - this, along with the contents of any will they left, will help determine how their share of the property and of any equity was to be distributed.


Another is the measures (if any) taken by your respective bankruptcy trustees to register an interest in the property. It is possible that they would have registered charges against the house, giving them the opportunity to claim any equity that did eventually arise, even if this were several years after the bankruptcy/ies. If this were done - and it is a strong possibility - chances are that the trustee's costs would eat up any funds that might otherwise come back to you.


As for your credit file, I would assume that the mortgage lender continued to report non-payment to the credit reference agencies until repossession. If the house has indeed sold for enough to clear the mortgage and any associated costs, then the account should now show as satisfied. If, on the other hand, it has not, then any sort of shortfall will be retrospectively included in your 2010 bankruptcy and cannot be pursued.


Dennis
@natdebtline

jpr_74

Thanks for your reply Dennis.

We were tenants in common, however there was a charge on the property which would mean that any equity is then likely to be shared out amongst any beneficiaries from the BR.

One more thing that I would like to ask, then if the debt then appears to show as "satisfied" on my credit file how will this affect any future credit queries/mortgages?

National_Debtline

Hi again


Sorry for the belated reply - I don't get automatic notifications so have to check back in manually for responses.


If the account has been satisfied, then any other prospective lenders will see that your commitments towards this account are over. It will certainly help your borrowing power but it's impossible to quantify how much of a difference it will make to your prospects of successful applications. Clearly, until the bankruptcy drops off your file (which should be in a matter of weeks) its effect on your creditworthiness counters any positive data that is on there.


Dennis
@natdebtline