Property costs after Bankruptcy

freddy911

I have a bit of a complex question not sure if anyone here will be able to help with but lest see.

What happens to costs arising from a property that is owned by someone who is bankrupt but not yet discharged and the house has not yet been repossessed.

This is in relation to a property that had a house fire and had to be demolished by the council. As this is post bankruptcy would the home owner be responsible for the demolition costs? or would the fact he is bankrupt indemnify him from the costs as the property was bought prior to bankruptcy?

Thanks

silvercar

Presumably you are not living in the property if it has been demolished.

I would have thought the council would have billed your insurer if they paid for the demolition. If you weren't insured then they would bill you. If you didn't pay then the council may put a charging order on the property (effectively a second loan (mortgage)).

Once the property is repossessed the lender sells for what they can get and returns any excess to you. if the council have put a charge on it, then the lender would also clear that loan if there is enough money.

If there is any shortfall that falls into your bankruptcy.

I'm not sure what would happen if the date of the demolition billing is after your bankruptcy. One question is why did the council take control of the demolition and are you liable for the bill.

Minkym00

If the costs were incurred post-bankruptcy then they don’t vest and the home owner would be liable.

Was building insurance in place and is there a claim in place? Could all get sticky this as insurance claims vest in the OR as trustee. It’s called a Right of Action. This link is a bit old but the principles remain the same. https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch25-36/Chapter31/part9/part3/part_3.htm

silvercar

In the world of coincidences this may be your property; on the other hand it may just be a similar story and worth watching.

https://forums.moneysavingexpert.com/discussion/6005950/auction-property-legal-advice

freddy911

silvercar wrote: »

In the world of coincidences this may be your property; on the other hand it may just be a similar story and worth watching.

https://forums.moneysavingexpert.com/discussion/6005950/auction-property-legal-advice

That's my post so no coincidence, but actually not my property, thankfully my bankruptcy was 9 years ago so all a distant memory now.

Its actually a property I'm looking to buy at auction and I'm trying to work out if there is any way the costs of the demolition could be passed to the new owner. The demolition was in September and no additional charge has been registered with the land registry. Maybe the council knew the owner was bankrupt and decided it wasnt worth it. Or as has been suggested above maybe the insurance cleared it. But as this is now been auctioned off as just the remains and land I was assuming there was no insurance as I would have expected the insurance to have repaired the home rather than ignore the section 77 and let it be demolished ?