Tidying up loose ends

abcdave

Hi All,

Just a bit of advice really.

I was Bankrupt 25/3/15 and discharged at the same date this year. We left our mortgaged home a month before bankruptcy and stopped paying the mortgage. We sent a letter advising we had left the property and would not challenge any repossession order.

Fast forward to now and I've started the clean up process. Everything has been very easy to sort, default dates etc, except the mortgage. The bank have made no move to repossess and aren't even reporting the account as defaulted.

In an attemt to get some sort of reaction, I sent them a letter (template from Debt Camel) asking them to record he account as defaulted 25/3/15 as per ICO guidance.

Today they replied saying they would only record a default if the property was taken into possession and sold. They also say that as they were not party to the bankruptcy agreement, thay have no responsibility to update credit records..

They have offered to discuss over the phone, but I'd rather deal in writing as I feel they are trying it on.

What's my next move?

Thanks in advance

NotEvanAPot

It is a secured debt, so not covered by bankruptcy, therefore they are correct in what they are stating.

Has the property sat there untouched for the best part of 18 months, with your keys posted through the letterbox? If it has, don't be afraid to pick the phone up to them. Impress upon them that you have no ongoing interest in the property, request they commence repossession proceedings to sell the property and leave it at that.

Once sold, any shortfall will be included in the bankruptcy. You do not need to, and explicitly should not, sign any deed of acknowledgement, much to the mortgage lenders horror.

National_Debtline

Hi abcdave,


At this stage the mortgage is an excluded from the bankruptcy until it's sold and it will then be included as a contingent debt in the bankruptcy and the shortfall will be written off. You can ask them to seek possession sooner but they will do this when they are ready and it is not something that is within your control, so don't worry.


When they do come to registering the default it should not post date the bankruptcy date so shouldn't have any further credit implications, beyond the bankruptcy. And NotEvenAPot has highlighted a key issue about not signing anything from the lender - especially not a deed of acknowledgement.


Laura
@natdebtline

abcdave

Thanks folks,

I'm amazed that they've let the house sit empty for so long!

A

luvchocolate

I was wondering if the council are still billing you for this property?

abcdave

luvchocolate wrote: »

I was wondering if the council are still billing you for this property?

Hi luvchocolate,

Yes unfortunately, I'm still liable for tax until the property is repossessed. I got the year of my bankruptcy zero rated but had to start paying again this year.. It's not ideal!

A

alltaken

How does this work then?

Is it the case that although bankruptcy will take care of any shortfall, the bank can potentially sit on this for years without repossession?

Which leads me to the question, is there anything a bankrupt can do to force a repossession and stop any further council tax liability? A letter to the OR asking for a letter to the council proving that possession of the property no longer exists and that bankruptcy would stop any 'take back' by the bankrupt. Surely there is something to limit liability considering that bankruptcy is designed as a legal means to absolve ones debts.

luvchocolate

B.R covers unsecured debts only, it would seem the lender can take as long as they like to repossess a property and the owner is still liable for council tax and insurance until they eventually take possession.

once sold it becomes an unsecured debt and any shortfall is written off in the B.R.

I was lucky my properties were repossessed quickly.

NotEvanAPot

alltaken wrote: »

How does this work then?

Is it the case that although bankruptcy will take care of any shortfall, the bank can potentially sit on this for years without repossession?

Which leads me to the question, is there anything a bankrupt can do to force a repossession and stop any further council tax liability? A letter to the OR asking for a letter to the council proving that possession of the property no longer exists and that bankruptcy would stop any 'take back' by the bankrupt. Surely there is something to limit liability considering that bankruptcy is designed as a legal means to absolve ones debts.

I'm hoping you mistyped absolve in the above?

BR is not about removing guilt or showing innocence in debts run up. It is a legal protection, an extreme remedy that is there for when events do not run a positive course. It does not come with an addendum that the BR individual is innocent or guilty in the financial mismanagement, a BRU/O would show guilt of deliberate or untoward behaviour.

As stated, the mortgage lender cannot be forced to take possession of the property, and until they do so, any party to the mortgage remains liable for council tax, excepting any period under which it is not due by a party (tax year when BR begins or part thereof).

abcdave

I have tried on numerous occassions to force their hand, or encourage a repossession... they seem quite happy not to take action..

A

ukamber1

abcdave wrote: »

Hi All,

Just a bit of advice really.

I was Bankrupt 25/3/15 and discharged at the same date this year. We left our mortgaged home a month before bankruptcy and stopped paying the mortgage. We sent a letter advising we had left the property and would not challenge any repossession order.

Fast forward to now and I've started the clean up process. Everything has been very easy to sort, default dates etc, except the mortgage. The bank have made no move to repossess and aren't even reporting the account as defaulted.

In an attemt to get some sort of reaction, I sent them a letter (template from Debt Camel) asking them to record he account as defaulted 25/3/15 as per ICO guidance.

Today they replied saying they would only record a default if the property was taken into possession and sold. They also say that as they were not party to the bankruptcy agreement, thay have no responsibility to update credit records..

They have offered to discuss over the phone, but I'd rather deal in writing as I feel they are trying it on.

What's my next move?

Thanks in advance

I'm no expert but as I understood it, Lenders have to set a default date 3-6months after payments had stopped, whether its connected to a Bankruptcy or not, so even if they havent started repossession, the default date should have been set long before now.....I guess the quickest way to start repossession process, is to post the keys back to the Lender by special delivery saying you giving up the property as a voluntary repossession...

Hope you get things sorted