Losing my home due to bankruptcy, and need to rent ....

Matt_172

I'm sorry if this is in the wrong section, however i'am new to the site, however i would appreciate some advice.

Myself and My wife were declared Bankrupt on the 3rd March 2007. We have recently recieved a letter from our local court for court proceedings on our property.

The reason for the repossesion is due to a second charge on the house, which we cannot afford to repay, as this was secured on the property it could not be included in the Bankruptcy. We are also still currently paying our mortgage each month at £690, which if we lose the house is there any point in continuing these payments ??

However, myself and my wife are now very concerned. We went to see our local council yesterday to see if we were eligible for emergency housing due to myself and my wife having medical conditions, this was not enough for the council and we would be put on the list, which is around 8 years long.

When we have been in contact with estate agents to see about renting on a private long term basis, they have said we have to wait 3 years after the discharge period, or pay 6 months rent up front, Which in our current situation we cannot afford, as we would be looking at £3,5k.

I would like to know if someone could offer me any advice on what else i could do, because i earn to much for legal aid, but not enough to pay for a solictor and legal advice.

Now could someone tell me if this is correct with estate agents, being like this, or does it depend on each agents ruling. As we are both still quite young and both in full time employment.

I'm sorry if this does not make much sense, but at the moment, i'm quite down about the whole situation and my wife is crying her self to sleep about this, as we now cannot afford xmas either, due to having to pay court fee's.

Many Thanks

Matt

silvercar

We are also still currently paying our mortgage each month at £690, which if we lose the house is there any point in continuing these payments ??

It depends if there is equity in the house or not.

We went to see our local council yesterday to see if we were eligible for emergency housing due to myself and my wife having medical conditions, this was not enough for the council and we would be put on the list, which is around 8 years long

Though being repossessed may make things happen quicker and could give you access to emergency acommodation.

When we have been in contact with estate agents to see about renting on a private long term basis, they have said we have to wait 3 years after the discharge period, or pay 6 months rent up front, Which in our current situation we cannot afford, as we would be looking at £3,5k.

Its all a question of priorities, if you cannot get housed by the council you will need to rent privately. This means either finding a private landlord who will allow you to rent or saving 6 months rent and a deposit and going through a letting agent. Some may say that, in this circumstance, it is worth not paying your mortgage in order to save up this money.

There is a bankruptcy sub-board within the debt free board. Experts on there will know more about your housing situation.

DawnW

Please get information from the CAB and Shelter. I really feel for you. I hope it all works out. I am sure it will, but please, do seek advice from these free charities. They will be able to advise you on the legal side, and also on housing (Shelter particularly). God bless.

Matt_172

Thank you both for your help and your advice.

However when we phoned the CAB, they have told us we would not be applicable for free advice as we earn to much money. Which i could not understand as i was under the impression, is it a place to get free advice no matter if you work or do not work.

However i will give Shelter a call and see what they can advise us of

Thanks to you both

Matt

worrypants

good luck to you Mat this is a dreadful situation

CAB advice is free
hopefully shelter will be able to advise

HugoSP

Have you actually tried to negotiate with the creditor concerned?

If you have been paying a repayment element on both loans on the house, they may be able to just ask you to pay the interest, or renegotiate the loans over a longer period of time.

I know nothing about bankrupsy so please forgive me if this suggestion is crass.

jamesd

Do you have income free to repay the second charge debt over say five years? Are they making unreasonable demands like repay it all at once instead of continuing to pay the normal payments plus something towards any arrears?

If you have available income, make them an offer. And be sure that you tell the court that you've made the offer and show up at the court hearings, to show that you're both interested and willing to come to some reasonable arrangement.

If the court does go with repossession and you have any equity in the house, ask for the order to be suspended to give you a chance to sell the place for a better price than a fast auction sale. This is cheaper than repossession and the equity could take care of deposits for a private landlord.

Repossession doesn't end the debt. Instead all the costs of the repossession and subsequent sale (legal bills, estate agents fees etc.) are added to the outstanding debt, then the sale price is subtracted. You get any money left over, but usually end up with money to pay back instead. It's worth paying the mortgage because any payments you miss would be added to the debt you'd have to repay later anyway.

Different landlords have different practices when it comes to what they want. You're far from an ideal tenant but if there are any advertising in your local paper, give them a call and be completely open right at the start of the call, no evasiveness at all. Some would go for it, some wouldn't, depends on the state of the local rental market. Key advantage for you: you're not going to be buying another place soon so the landlord can look forward to you being a tenant for many years, lowering the costs for the landlord from having to regularly find new tenants. If your mortgage payments have been regular, even only for a few months, that's also useful evidence for a landlord that you'll be able to pay the rent.

Matt_172

The problem is there is no equity in the property. We offered to make a small repayment, but the problem is they are asking for the monthly amounts plus the arrears, and due to the interest charges over the past year the monthly payments have shot up. So we cannot even make payment for the monthly installments.

regarding the repossesion, the official recievers own our property, so once the property has been sold, the money will go to the first charge, anything left after this will go onto the 2nd charge. However if there is a shortfall from the amount owing it will be classed as an unsecured loan, which will be written off in the Bankruptcy order. We have had this confirmed by our official recievers.

We are regular with the mortgage repayments, and have been for the past 5 years, We also have found a Gaurantor, my mother in law. She owns her house out right, so this may help with us on our Renting side of things, and we would be looking to rent for the next 3 - 5 years. I know at this moment in time we are from ideal, but we are both employed in secure jobs, and have been always in employment.

Matt_172

HugoSP wrote: »

Have you actually tried to negotiate with the creditor concerned?

If you have been paying a repayment element on both loans on the house, they may be able to just ask you to pay the interest, or renegotiate the loans over a longer period of time.

I know nothing about bankrupsy so please forgive me if this suggestion is crass.

Yeah, we have tried when we were first declared bankrupt, however they were not really interested. Even when we suggested to cease payments until there was enough equity withing the property for them to claim it back at that point, However they were not interested

We are also at the maximum loan repayment term.

However, any advice is good, so thank you

silvercar

regarding the repossesion, the official recievers own our property, so once the property has been sold, the money will go to the first charge, anything left after this will go onto the 2nd charge. However if there is a shortfall from the amount owing it will be classed as an unsecured loan, which will be written off in the Bankruptcy order. We have had this confirmed by our official recievers.

This is often a grey area, any shortfall at the time of bankruptcy is often classed as unsecured as there clearly was no equity to secure it on (and unsecured debts are included in bankruptcy). Be careful that the lender doesn't try to claim that the repossession legal charges and any early repayment charges occured after bankruptcy and are therefore new debts and not part of your bankruptcy.

If there is no equity coming your way and you need to find alternative home I would suggest saving your mortgage payments up to use as a large rental deposit. If you can provide a few months rental up front you will be more attractive to landlords. Being able to provide a guarantor is also a good move, though the guarantor would need to be credit checked and show an income capable of paying the rent.

If CAB can't help you then the Official Receiver should be able to answer some of your questions. Also the people on the bankruptcy board will have experience and be able to point you in the direction of other debt advisors.