Repossession and bankruptcy

Emily76

Hi I'm almost ready for bankruptcy (after reading the excellent advice on this site) but I have a few questions relating to an imminent repossession of my leasehold flat. Firstly, my service charge is in arrears and I believe that this will be paid by the mortgage company to maintain the lease so it doesn't affect the re-sale after repossession. However, I'll have to make myself bankrupt after repossession but before the sale - who pays for the service charge after the repossession? Secondly, who arranges for the utilities to be switched off so I don't pay the daily charge? I had tenants in the flat for years so I've no idea who the utilities are held with or what the meter readings are (I can't go there to read them it's too far away). Thanks in advance for any help you can give!

silvercar

Why do you have to rush? Would it be easier to allow the sale to happen, then you know that there won't be any nasty surprises.

Emily76

It's taken a year of non payments to get to this point where I'm almost rid of it - it's been in negative equity for ten of the twelve years I've owned it and I'm going bankrupt partly because of the shortfall (prob £25k) but also £25k of personal debt.

I'm on maternity leave and making token payments but I can only hold off the bailiffs for a bit longer I think as I can no longer afford those payments on SMP. Also as I'm on SMP I'm hoping I won't get a payment plan when going bankrupt so I'm trying to time everything carefully. It's just the ongoing service charge and utility bills I'm worried about - I want a clean slate to start again and don't want to be left still paying bills for a property I don't live in and can't afford.

Emily76

Also I've had it on the market for years and it hasn't sold so I'm trying to prepare for the possibility that the mortgage company won't be in a hurry to sell it as its in such bad negative equity due to the area where it is. It's been a complete nightmare since I bought it and can't wait to be rid of it

ToxtethO'Grady

Even if the mortgage company take a while to sell it, all costs, shortfall and and debts from the property would be included in the BR. Once you give or they take possession they are liable for selling it and any costs from that point would be included in the BR.

DO NOT sign anything the mortgage company ask you to without getting advice about it first.

luvchocolate

As said the charges can be really high. A trustee was appointed to my case due to 3 properties, his bill was over £24,000.

Emily76

ToxtethO'Grady wrote: »

Even if the mortgage company take a while to sell it, all costs, shortfall and and debts from the property would be included in the BR. Once you give or they take possession they are liable for selling it and any costs from that point would be included in the BR.

DO NOT sign anything the mortgage company ask you to without getting advice about it first.

I think the service charge would be included up until April as that years bill will be unpaid and should come under the bankruptcy - but I'm unsure about 2018/19's bill (although hopefully the property may have gone to auction by then) as that bill would be generated after the bankruptcy?

Noted regarding not signing anything!!

Emily76

luvchocolate wrote: »

As said the charges can be really high. A trustee was appointed to my case due to 3 properties, his bill was over £24,000.

:eek: is a trustee appointed by the mortgage company to dispose of the property after bankruptcy? If so that is extortionate!

luvchocolate

Emily76 wrote: »

:eek: is a trustee appointed by the mortgage company to dispose of the property after bankruptcy? If so that is extortionate!

Hi the trustee was appointed by the O.R, it was complicated involved an ex partner and a declaration of trust.
Their job was to sell properties and try to get as much money as possible,it did involve a court case, their rates are similar to solicitors so it soons adds up.
They also get their fees paid first if they manage to get any money.

Steven_from_scotland

Emily, are you in a position to pay the bankruptcy fees and go bankrupt right now?

You say you are on maternity pay? How long left till you go back to work?

Do you have a partner or any other source of income?

What about the property you currently live in? It's it mortgages or in pos/neg equity

If you go bankrupt now, your other property will be sold by the mortgage company, doesn't matter how long it takes any fees or service charges will all be included in the bankruptcy so stop making any token payments to anyone just now.

Your on maternity pay so now would also be a good time to go bankrupt to try and avoid paying any IPA for 3 years but we would need to know your current circumstances incase you lose your current home etc

Emily76

Hi, yes I can pay the fees I stopped paying everything months ago. I go back to work in 4 months. I don't live at the property its empty and its in negative equity, years and years of having a tenant hasn't made a dent in this. Partners on a low wage so payment plan is unlikely (hopefully).

The only two worries are the ongoing service charge payments as they're £100 a month and don't want to have this extra debt after bankruptcy as I won't be able to afford it and also the utility bills - although I've had a quick Google and I think the mortgage company might switch them off but I'm not sure. So if anyone can help regarding these two queries that would be great! I think I read that up to the bankruptcy utility bills are included but are then reset and I'll still be liable from the bankruptcy date, but not for the arrears so I'm also worried that's what will happen with the service charge.