A buy to let being repossessed with a negative equity

hobbyguy

I’m m hoping my 40% purchase will go through before the sale of my buy to let. So my money will will be tied up. I know this isn’t a great situation but any advice is helpful xx

hobbyguy

But I will have bought into a new property before the bill arrives 

MattMattMattUK

hobbyguy said:

I’m m hoping my 40% purchase will go through before the sale of my buy to let. So my money will will be tied up. I know this isn’t a great situation but any advice is helpful xx

hobbyguy said:

But I will have bought into a new property before the bill arrives 

Then they will potentially see to force the sale of the new property as a court is very likely to deem that you deliberately sought to try and deprive them of funds. You know you have a debt yet you are choosing to buy another property rather than pay off the debt. If they force the sale all the costs of that process will come from the equity, they will be borne by you and will likely be significant. 

Buying a new property is not putting the money out of their reach, it just means it will cost you a lot more money when they force the sale. 

Hoenir

hobbyguy said:

I’m m hoping my 40% purchase will go through before the sale of my buy to let. So my money will will be tied up. I know this isn’t a great situation but any advice is helpful xx

Section 423 of the Insolvency Act 1986 (s423) provides for the avoidance of transactions intended to put assets out of the reach of creditors or otherwise prejudice their interests.

strawb_shortcake

Is your partner aware of this? They may want to seek independent advice before you attempt to buy in to their property 

ellen_vannin

Zero chance of not being chased for the debt. You have the money but are trying to choose not to pay your debts.
They will either get the payment when your sale is processed or apply to sell.
Why do you think you should not pay?

penners324

Correct thing to do here is sell your residential property and pay off the debt. And keep the new place in your partners name.

Doing what you suggest could put your partners property at risk

EnPointe

hobbyguy said:

So long of it is I have my own house which I am selling to buy into my partners home it would be a 60/40 split to my partner and we wouldn’t have a mortgage. I currently have a buy to let that hasn’t had a mortgage payment for over two years. Mortgage company not helpful so I’ve handed the keys back. This mortgage was an I terst only mortgage and has an unpaid debt of over £25k plus a negative equity. If the sale of my residential home goes through and I buy into my partners home, can the buy to let mortgage company come after money from my new shared home? They will be around £60k owing. I have low working capacity and can’t pay a lot back monthly. Just want to know what the situation is. Thank you

yes they can and they will 

ACG

Completely ignoring the morality of what you want to do as I am not hear to judge, what you want to do is just pretty much as bad of an idea as you can come up with.

You have the means to clear the debt when you sell another asset yet you dont want to as you would rather pay it back on the drip or not at all. Thats fine, who wouldnt. 

But the lender on the other hand will know you have another property now and in the future. 
Because the debt is so large, they have the ability to make you bankrupt. Now, if you have no assets, they are unlikely to throw good money after bad. But where you do (as you will), the threat of bankruptcy normally makes people pay up if they are able to. 

As an alternative, they have the ability as mentioned to petition to get a charging order against the property you will hold with your partner (I am sure they will appreciate that), but it will only be secured against your share of the property. They may or may not be able to force the sale, unlikely but probably not unheard of. However that charge may also be interest accruing which if it is will snowball into a bigger and bigger debt. 

Dont stick your head in the sand.
Dont think you can get away with it. 
Deal with the situation. I am not saying be completely forthcoming with information, but sort out a payment plan or a settlement figure. Its a buy to let property, its a business. You wont be treated with kid gloves. 

Flugelhorn

I think the thing to also note is that you are not buying a new property but buying into your partner's property - hence paying her 40% of the value of the property in cash.
The money that should be paying the debts will be passed on to another person.