please help

earwig

hi can any one help me my mate has gone bankrupct and owns a flat but the flat is in negative equaty and has been damaged in the flood and has no insanance the best thing to do is to give up the flat but im not sure they can do this so my qustion is can you hand the keys back to the mortage company and included the short fall in the bankrupcty they went bankrucpt last month they have also got a letter from the or saying that they now own the flat and if they want the flat they will have to buy it back and pay for valuers ect please help sort this mess out they tryed to speak to the or but they didnt know much about it :eek: meanwhile they are paying a mortage on a flat they cant live in and are homeless any ideas what the best thing to do is thanks

backontheup

if it is negative equity, he\she can probably get a family member or a friend to buy his\her interest in the property for a nominal fee of £1.

So, in essence, he\she will get to keep their flat :-)

Richard_S

earwig wrote: »

hi can any one help me my mate has gone bankrupct and owns a flat but the flat is in negative equaty and has been damaged in the flood and has no insanance the best thing to do is to give up the flat but im not sure they can do this so my qustion is can you hand the keys back to the mortage company and included the short fall in the bankrupcty they went bankrucpt last month they have also got a letter from the or saying that they now own the flat and if they want the flat they will have to buy it back and pay for valuers ect please help sort this mess out they tryed to speak to the or but they didnt know much about it :eek: meanwhile they are paying a mortage on a flat they cant live in and are homeless any ideas what the best thing to do is thanks

Hi earwig,

If they want to get rid of the flat then any shortfall when the property is sold will be included in their bankruptcy. They may want to seek confirmation about this from their O.R just to put their minds at rest.

Richard

earwig

hi thanks so dose that mean that they can hand the keys back to the mortage company and walk away with out being chased by the mortage company as the shortfall will be inculed in the bankrupcty even though it was not on the court forms they handed in

earwig

backontheup wrote: »

if it is negative equity, he\she can probably get a family member or a friend to buy his\her interest in the property for a nominal fee of £1.

So, in essence, he\she will get to keep their flat :-)

do they have to buy it though or can they refuse and if they do refuse what happens

Richard_S

earwig wrote: »

hi thanks so dose that mean that they can hand the keys back to the mortage company and walk away with out being chased by the mortage company as the shortfall will be inculed in the bankrupcty even though it was not on the court forms they handed in

Hi earwig,

Got it in one.

This is the relevant legislation:

380. Introductory
The next five sections have effect for the interpretation of the provisions of this Act which are comprised in this Group pf Parts; and where a definition is provided for a particular expression, it applies except so far as the context otherwise requires.
381. "Bankrupt" and associated terminology
(1) "Bankrupt" means an individual who has been adjudged bankrupt and, in relation to a bankruptcy order, it means the individual adjudged by that order.
(2) "Bankruptcy order" means an order adjudging an individual bankrupt.
(3) "Bankruptcy petition" means a petition to the court for a bankruptcy order.
382. "Bankruptcy debt", etc
(1) "Bankruptcy debt", in relation to a bankrupt, means (subject to the next subsection) any of the following -
(a) any debt or liability to which he is subject at the commencement of the bankruptcy.
(b) any debt or liability to which he may become subject after the commencement of the bankruptcy (including after his discharge from bankruptcy) by reason of any obligation incurred before the commence- ment of the bankruptcy,
(c) any amount specified in pursuance of section 39(3)(c) of the Powers of Criminal Courts Act 1973 in any criminal bankruptcy order made against him before the commencement of the bankruptcy, and
(d) any interest provable as mentioned in section 322(2) in Chapter IV of Part IX.
(2) In determining for the purpose of any provision in this Group of Parts whether any liability in tort is a bankruptcy debt, the bankrupt is deemed to because subject to that liability by reason of an obligation incurred at the time when the cause of action accrued.
(3) For the purposes of references in this Group of Parts to a debt or liability, it is immaterial whether the debt or liability is present or future , whether it is certain or contingent or whether the amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion; and references in this Group of Parts to owing a debt are to be read accordingly.
(4) In this Group of Parts, except in so far as the context otherwise requires, "liability" means (subject to subsection (3) above) a liability to pay money or money's worth, including any liability under an enactment, any liability for breach of trust, any liability in contract, tort or bailment and any liability arising out of an obligation to make restitution.
383. "Creditor" "security", etc
(1) "Creditor" -
(a) in relation to a bankrupt, means a person to whom any of the bankruptcy debts is owed (being, in the case of an amount falling within paragraph of the definition in section 382(1) of "bankruptcy debt", the person in respect of whom that amount is specified in the criminal bankruptcy order in question), and
(b) in relation to an individual to whom a bankruptcy petition relates, means a person who would be a creditor in the bankruptcy if a bankruptcy order were made on that petition.
(2) Subject to the next subsections and any provision of the rules requiring a creditor to give up his security for the purposes of proving a debt, a debt is secured for the purposes of this Group of Parts to the extent that the person to whom the debt is owed holds any security for the debt (whether a mortgage, charge, lien or other security) over any property of the person by whom the debt is owed.
(3) Where a statement such as is mentioned in section 269(1)(a) in Chapter I of Part IX has been made by a secured creditor for the purposes of any bankruptcy petition and a bankruptcy order is subsequently made on that petition, the creditor is deemed for the purposes of the Parts in this Group to have given up the security specified in the statement.
(4) In subsection (2) the reference to a security does not include a lien on books, papers or other records, except to the extent that they consist of documents which give a title to property and are held as such.
384. "Prescribes" and "the rules"
(1) Subject to the next subsection "prescribed" means prescribed by the rules; and "the rules" means rules made under section 412 in Part XV.
(2) References in this Group of parts to the amount prescribed for the purposes of any of the following provisions -
section 273;
section 346(3);
section 354(1) and (2);
section 358;
section 360(1);
section 361 (2); and
section 364(2)(d),
and references in those provisions to the prescribed amount are to be read in accordance with section 418 in Part XV and orders made under that section.
385. Miscellaneous definitions
(1) The following definitions have effect -
"the court", in relation to any matter, means the court to which, in accordance with section 373 in Part X and the rules, proceedings with respect to that matter are allocated or transferred;
"creditors petition" means a bankruptcy petition under section 264 (1)(a);
"criminal bankruptcy order" means an order under section 39(1) of the Powers of Criminal Courts Act 1973;
"debt" is to be constructed in accordance with section 382(3);
"the debtor" -
(a) in relation to a proposal for the purposes of Part VIII, means the individual making or intending to make that proposal, and
(b) in relation to a bankruptcy petition, means the individual to whom the petition relates;
"debtor's petition" means a bankruptcy petition presented by the debtor himself under section 264(1)(b);
"dwelling house" includes any building or part of a building which is occupied as a dwelling and any yard, garden, garage or outhouse belonging to the dwelling house and occupied with it;
"estate", in relation to a bankrupt is to be constructed in accordance with section 283 in Chapter II of Part IX;
"family", in relation to a bankrupt, means the persons (if any) who are living with him and are dependent on him;
"secured" and related expressions are to be constructed in accordance with section 383; and
"the trustee", in relation to a bankruptcy and the bankrupt, means the trustee of the bankrupt's estate.
(2) References in this Group of Parts to a person's affairs include his business, if any.

Richard_S

earwig wrote: »

do they have to buy it though or can they refuse and if they do refuse what happens

Its a option to purchase not an obligation.

Richard

earwig

just wanted to say thanks as just pressing the thanks button didnt seem enough after all that typing you done iwill pass on this information so they can give the keys back and start again i just wanted to be sure that they didnt get cought out because of somthing like it had to be listed on the bankrupcty form when they went to court or otherwise the short fall wouldnt be inculed in the burkrupcty

Richard_S

earwig wrote: »

just wanted to say thanks as just pressing the thanks button didnt seem enough after all that typing you done iwill pass on this information so they can give the keys back and start again i just wanted to be sure that they didnt get cought out because of somthing like it had to be listed on the bankrupcty form when they went to court or otherwise the short fall wouldnt be inculed in the burkrupcty

Hi earwig,

Thank you, I appreciate that comment.

It was part of the bankruptcy process that directly affected us, so I had to be certain.:eek:

I already had access to it so no need for the hard work this time.

Richard