Problems after handing the keys back!!

Lone_Traveller

I was sequestrated (Made Bankrupt) in May 07 after my Trust Deed failed. After failing to buy out the Beneficial Interest in my property due to valuation issues, my trustee took possession of my property with my consent. I handed the property keys to my Trustee 4 months ago and stopped paying my mortgage which was up to date at that point.

My trustee contacted my mortgage lender Northern Rock and told them that the house has been put on the market for sale. Any redemption / shortfall owed will be paid to Northern Rock in full once the house is sold. However due to the time of year this may take a few months.

Currently I had 9 letters from Northern Rock demanding mortgage shortfall payments, threading to send a councilor around and charging me for the service. In one letter they have also demanded payment on an unsecured loan that was part of the original Trust Deed/Bankruptcy. They now are threatening legal action and repossession. There is about 23K equity in my property.

Questions

1. Is my mortgage counted as a post bankruptcy debt?

2. If it is, what are the consequences of this?

3. Can Northern Rock market the property separately from the trustee to bump up the costs involved?

4. If so can they sell the property through auction and let it go for less than the market or even mortgage value to pursue a quick sale?

5. If Northern Rock sell the property does the trustee have a say as to what minimum price the property sells for? Bearing in mind it is a trustee’s duty to recover as much as possibly for all creditors named in the bankruptcy.

4. Finally and most important to me, can Northern Rock take me to court over this? Will I have to attend? What does repossession involve?

This whole area seems grey to me as the trustee was duty bound to release my assets i.e. my mortgage equity, once my Trust Deed failed and I was unable to by out the equity in the property. To do this the house has to be sold. For this to happen I need to move out. If I move out I need to pay rent, if I'm paying rent I can’t afford to pay the mortgage aswell!

tigerfeet2006

Sorry I am afraid I haven't a clue with property. Would strongly suggest you ring these guys though. They may be busy and you might have to sit on the redial button.

http://www.nationaldebtline.co.uk/scotland/

fermi

If you were in England I would say just let the Trustee and mortgage company fight it out.
You would be no longer liable for mortgage payments or any shortfall regarding secured/unsecured debts.
But I'm not sure if there are any significant differences in Scottish insolvency law that may effect this.

Have you discussed this with your Trustee?

(by the way, Northern Rock have a bad reputation in these matters and from memory try to scrouge every penny they can whether they are entitled to it or not)

Richard_S

Lone_Traveller wrote: »

I was sequestrated (Made Bankrupt) in May 07 after my Trust Deed failed. After failing to buy out the Beneficial Interest in my property due to valuation issues, my trustee took possession of my property with my consent. I handed the property keys to my Trustee 4 months ago and stopped paying my mortgage which was up to date at that point.

My trustee contacted my mortgage lender Northern Rock and told them that the house has been put on the market for sale. Any redemption / shortfall owed will be paid to Northern Rock in full once the house is sold. However due to the time of year this may take a few months.

Currently I had 9 letters from Northern Rock demanding mortgage shortfall payments, threading to send a councilor around and charging me for the service. In one letter they have also demanded payment on an unsecured loan that was part of the original Trust Deed/Bankruptcy. They now are threatening legal action and repossession. There is about 23K equity in my property.

Questions

1. Is my mortgage counted as a post bankruptcy debt?

2. If it is, what are the consequences of this?

3. Can Northern Rock market the property separately from the trustee to bump up the costs involved?

4. If so can they sell the property through auction and let it go for less than the market or even mortgage value to pursue a quick sale?

5. If Northern Rock sell the property does the trustee have a say as to what minimum price the property sells for? Bearing in mind it is a trustee’s duty to recover as much as possibly for all creditors named in the bankruptcy.

4. Finally and most important to me, can Northern Rock take me to court over this? Will I have to attend? What does repossession involve?

This whole area seems grey to me as the trustee was duty bound to release my assets i.e. my mortgage equity, once my Trust Deed failed and I was unable to by out the equity in the property. To do this the house has to be sold. For this to happen I need to move out. If I move out I need to pay rent, if I'm paying rent I can’t afford to pay the mortgage aswell!

Hi Lone Traveller,

I know the laws in Scotland are different to England but I assume the principles are the same.

1. Any debt that arises from the sale of your house will be included in your bankruptcy.
2. N/A
3. I'm fairly certain that it's the Trustees responsibility to market the house and not Northern Rock.
4. N/A the Trustee will want to maximise the sale proceeds from the house and don't normally offer houses for auction.
5. It is the Trustee's responsibility to sell the house at it's market value.
6. Northern Rock may well issue Court papers but I'm sure once the Court was aware of your bankruptcy, they'd be thrown out.

As tigerfeet suggested, I would definitely seek confirmation from either your Trustee or one of the Debt Charities.

Regards

Richard

Lone_Traveller

Thanks Guys for the quick replies, Ive already contacted National Debt helpline and they put me right on a few things. I was wondering if anyone else has had the same problems and if they are further down the line, and how did it pan out for them?

tigerfeet2006

No problems. Unfortunatly we don't have much of a scottish contingence on here.

Try this forum as they have a scottish board on it.
http://www.debtquestions.co.uk/debt_forum/

Lone_Traveller

Cheers tigerfeet im already on that one aswell as! Maybe I could start a Scottish section on here!

tigerfeet2006

You'd be quite welcome to. At the moment we see about 7-8 a year and apart from Homework who posts here none of us has much understanding of the Scottish system. Although I understand it will all change in April to make things easier.