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| hammy0107 |
Posted - 10 June 2008 : 09:19:41
Hi all,
Just looking for advice on what BI in my property.
My property has £5200 equity in it after early redemption charges or £13k if early redemption charges are not taken into account. We are going to struggle to show much of an interest for my wife as property has always been in my name and so have bills. Looking at worst case scenario and the OR says i have £13k equity and bearing in mind property prices are expected to drop again should my wife be making an offer to purchase the BI or should we wait in the hope that the OR cannot get rid of it within the 3 year period? If it is deemed that there is only in fact £5200 equity and for instance my wife is entitled to a 20% interest then this would bring the equity down to just over £4k, would the OR have an interest in the property with this little equity and if so do you think an offer of £1 to £2k would be accepted? |
| 8 L A T E S T R E P L I E S (Newest First) |
| melanie_giles |
Posted - 12 June 2008 : 22:18:46
They will generally, within reason, give you the opportunity to raise the beneficial interest yourselves.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| hammy0107 |
Posted - 12 June 2008 : 13:58:49
Melanie,
Will i always be given first refusal on my house or can they just get rid without offering me the chance to purchase the equity?
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| melanie_giles |
Posted - 11 June 2008 : 23:21:03
I cannot possibly get inside the head of your particular examiner, Hammy, and second guess what they may determine. You will have to ask those questions directly, I am afraid.
You do not have to make an offer straight away, and during the first year, providing you continue to pay your mortgage, the OR cannot take any steps to possess your property. It is fair to say that the OR would rather see you keep your property, but they have to ensure that full market value for your beneficial interest is achieved, and this is calcualated at the time the offer is made and accepted.
If you offer the full value of the equity, as calculated by the OR, then your house will be safe.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| hammy0107 |
Posted - 11 June 2008 : 15:56:14
Melanie,
Are you saying that in your opinion the OR will not listen to an offer now unless it is very close to £13k?
What if in 6 months time the property is valued significantly less than it is now, would i be in a position to make an offer then or do i have to wait until the 3 years are up?
If i do have to wait until the 3 years are up do i then have first refusal to buy?
If in 18 months for instance i wanted to sell and buy another property can i do so or not?
If the maximum equity is £13k and a 3rd party offered £13k, is there any other way i could potentially lose my house? |
| melanie_giles |
Posted - 11 June 2008 : 14:00:10
It's a good argument, Hammy, but one which the OR rarely caves in to. Your views on whether your current offer is better than sitting on the property for the next three years, may not always be shared with the Insolvency Service.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| hammy0107 |
Posted - 11 June 2008 : 11:30:20
Melanie,
How can they not take into account redemption charges. If they were to dispose of my house then the redemption charge would still apply and therefore the equity would be nowhere near £13k, particularly once fees are taken into account.
Surely the OR is obliged to do their best by the creditors (and me) and as such £2 or £3k now is better than what they will get in 3 years time. Even if house prices were to go up by 10% which is extremely unlikely and a forced sale got them 85% of the value (again unlikely), they would still not reach the outstanding mortgage balance and as such the creditors would end up with nothing. I am on an interest only mortgage and my insurance is added onto the mortgage value each 12 months, therefore in 3 years i will actually owe more than i do now giving even less equity.
Julian i eagerly await your resoponse to Melanies question. |
| melanie_giles |
Posted - 10 June 2008 : 23:51:08
The OR is bound to set an opening bat at £13,000 as that is legally the value of your equity and redemption penalties are rarely taken into account.
Julian - why do you feel that the OR would place a charge over the property? His interest is safe during the first three years, and a Trustee would only pursue a charge if the equity could not be released by the end of that period? Not sure I follow your thought process on this one?
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| JulianDonnelly |
Posted - 10 June 2008 : 13:10:25
Hi Hammy,
You happen to be in a very grey area at present. I would suggest the OR will chose one of two paths ...
1. Ask you for a "nuicance payment" of a couple of thousand, or
2. Place a charge over the property. In this case, it's a three year "use it or lose it" deal in which your property can be revalued and you're given the opportunity toraise finance to pay the OR any of your equity growth.
However, given the state of the housing market at present, they OR will more than likely take a small payment and call it quits!
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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