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| T O P I C R E V I E W |
| John.bn |
Posted - 23 March 2010 : 21:35:19
Hi, I really need some help but don't know where to turn. I have a property portfolio which has mortgages of £2000,000 on it but due to the current state of the market is probably only now worth £1,400,000.
About 2 years ago, I was made redundant and my father leant me £250,000 to set up a business and pay off the majority of our mortgage, he secured this loan with a 2nd charge against our property. The business did well in the first year,and we repaid c.£50k of the loan, however it has suffered over the last few months and cash flow is now a very major issue due to debtors not paying on time/going bump. My concern is that I will have to fold the business and seek work to pay my dad back and earn enough money to live off.
If interest rates go up, there is a very real possibility that the other properties will have to be repossesssed and I will be liable for any shortfall that comes after they have been sold. All the properties are in my sole name, except the Family residence which is in mine and my wifes name with the 2 charges over it.
The debt that I would owe in terms of a shortfall would be probably in the region of £600k, plus the £200k I owe to my father.
Our property is probably worth c.£230K now and we owe the Nationwide £35k for the first charge. Could we be forced to sell the house, and does the fact that my father leant me the money make a difference as to where he stands in order of people getting their money back.
I should point out, I have very little in terms of assetts or savings, everything that I had has gone into the business, I have no other debts i.e. credit cards or personal loans or other finance other than the Buy to let mortgages.
Any help would be massively appreciated. |
| 3 L A T E S T R E P L I E S (Newest First) |
| Richard P |
Posted - 24 March 2010 : 18:03:35
Hi John
Property portfolio and business also brought me (and my wife) down. with BR the only option
It is important for all Landlords BTL property investors who are considering BR to take proper and full advice.
I avoided going BR until all of my tenants had found alternate accomodation, this is not necessary to go BR but i felt i had an obligation to them. (this delay was nearly 12 months of phone calls, hasstle letters and visitors to my property longer than needed to endure)
each of your properties must be clearly presesnted to the OR and bankruptcy application or you will "volunteer for a long interview with the OR".
I do agree with Housing and suggest working with one of the experts. I did use Reviva and they helped with the process, tenants, tenancy, deposits, council tax mortgage companies and multiple court hearings around the country, etc the list went on
regards Richard |
| Bridgewood |
Posted - 24 March 2010 : 15:26:55
Hi John
I agree you ought to seek advice based on your individual circumstances, but based on the information you have provided, if your home is worth £230,000, with a mortgage of £35,000 and a second charge of £200,000 it is unlikely that you would lose it if you were adjudged bankrupt, as long as you continue to pay the mortgage.
This would depend on t he second charge to your father being properly registered, but, assuming that it is a valid charge, it would be taken into account before calculating the bankruptcy's interest in the property, and would therefore appear to be in negative equity.
This also assumes that none of the mortgages on the other properties have a charge registered against your home
Best wishes |
| Housing |
Posted - 23 March 2010 : 21:57:12
Dear John,
You have a lot going on here.
Can I suggest a call to Reviva UK (details at the left hand of the page). You may also wish to speak to melanie at Jones Giles (details also at the left hand side)
Once you have done that, you can get a feel for options open to you.
Good luck Richard
"There are no problems - only solutions" |
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