Voluntary repossession or handover to OR/trustee

Tina2018

Hi all,

I am a bit confused about what will happen to my property if I go bankrupt and the property hasn’t been taken over by the mortgage company at the time of bankruptcy. Will the OR then take control over the property or is it the mortgage company that has power to repossess it? The property is not in negative equity.

katyp

The OR will register their interest in the house.
Is there any equity?

Tina2018

Yes no charges at the moment start from mortgage

JCS1

How much is the equity?

Tina2018

Mortgage about 85k left to pay, market value £130 +

silvercar

If you intend staying in the property then the OR will wait 3 years before doing anything. Just before the 3 years is up the OR will ask you to buy the beneficial interest back. If you can't afford to do this then there may be the option of the OR placing a charge on the property until it is sold, but with £45k equity already that is less likely.

Tina2018

Thanks silvercar, what will happen if the bank is in the process of selling the property? Will the OR still get involved and place a charge etc...

silvercar

Tina2018 wrote: »

Thanks silvercar, what will happen if the bank is in the process of selling the property? Will the OR still get involved and place a charge etc...

Have you handed the keys back (voluntary possession) or been repossessed?

Assuming you have then it depends how quickly they work. The OR will place a charge so that on sale the bank contacts the OR to get the charge released and to do so the bank passes to the OR the equity that is left after their charges (mortgage debt including arrears and their repossession charges + sale fees + legal costs).

It is super important that you don't sign anything with the mortgage company after the date of your bankruptcy. You don't want to find yourself with a new debt that isn't included in the bankruptcy.

Will your debts be less that the equity realised on sale? Enough to have your bankruptcy annuled?

Tina2018

Thanks silvercar..im going to hand back the keys in couple of weeks. Ok so I don’t have to worry about OR placing a charge etc... I won’t be signing anything apart from sending a letter with the keys.

I don’t think so that the debts are less than the equity. The property has no charges or anything but I’ve been struggling to find a buyer myself so not sure at what price the mortgage company will sell it for.

Minkym00

silvercar wrote: »

If you intend staying in the property then the OR will wait 3 years before doing anything. Just before the 3 years is up the OR will ask you to buy the beneficial interest back. If you can't afford to do this then there may be the option of the OR placing a charge on the property until it is sold, but with £45k equity already that is less likely.

The OR won’t wait 3 years if there is equity in the property. The OR has 3 years in which to deal with a property, and will wait if there is negative equity to see if the position improves. But if there is equity, as in this case, then they’ll hand it over to an Insolvency practitioner to deal with immediately. They will sell it and distribute the fund available, less the fees, to the creditors proportionately. And the IP will take a good chunk of fees too.

Minkym00

silvercar wrote: »

If you intend staying in the property then the OR will wait 3 years before doing anything. Just before the 3 years is up the OR will ask you to buy the beneficial interest back. If you can't afford to do this then there may be the option of the OR placing a charge on the property until it is sold, but with £45k equity already that is less likely.

The OR won’t wait 3 years if there is equity in the property. The OR has 3 years in which to deal with a property, and will wait if there is negative equity to see if the position improves. But if there is equity, as in this case, then they’ll hand it over to an Insolvency practitioner to deal with immediately. They will sell it and distribute the fund available, less the fees, to the creditors proportionately. And the IP will take a good chunk of fees too.