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| David.rl |
Posted - 05 July 2010 : 18:37:04
Hi guys
Yet another question....the more I read the posts, the more questions I have...i think knowledge is power, but sometimes I think if I didnt know then I would'nt worry, but hey ho! My question relates to my house, which I dont live in at the moment as I moved to my fiances mothers as it was nearer to some work i had.
I dont want this house anymore as it is 300 miles away from my fiance...the mortgage is for £107,000.00 plus early redemption fees for a fixed rate plan of approx £5,000.00.
I have been trying to sell this since last November, the estate agent valued it at £128,000 and since then I have reduced it several times and it is now at £118,000.00 but no takers.
On the SoA on the secured creditors page do I include the fees for early redemption of the fixed rate? If so, there is very little equity in the property so to cover any shortfall, do I calculate the potential shortfall by assuming it will be sold by the mortgage company at 70% of the market value, and putting the remainder on the unsecured credtors page as a potential shortfall?
If not, how do I show any potential shortfall and how do I calculate it?
I really need to ensure that this is covered by the BR as I dont want the property and although I will have lost a lot of money put into it, just want the clean start with my new partner.
Hope this makes sense, my thoughts process is beoming muddled!!
Just thought of another thing! I am not planning on voluntary repossession was just going to let the OR deal with it. If the OR decides there is not enough equity to bother about do I just give the OR the keys or do I then have to get into repossession discussions with the mortgage lenders.
Thanks again |
| 5 L A T E S T R E P L I E S (Newest First) |
| David.rl |
Posted - 06 July 2010 : 12:27:24
Many thanks Bridgewood and Daniel
That is what I have now done, and I'm not going to look into it any deeper,
Many thanks and my fingers are crossed for my BR date at end of July
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| Daniel Griffiths |
Posted - 06 July 2010 : 12:07:29
In your situation the mortgage will not be paid so in the coming months the arrears will eat up the equity and the bank will begin repossession proceedings. The property may be in your name but the security the bank have is in the property, your interest belongs to the trustee in bankruptcy which will have no future value. Once the bank have repossessed and sold the shortfall is a provable debt in bankruptcy, at any time in the future.With regard to the £1 I can only state that the SOA should have the realistic value and equity figures submitted with the petition, in your case around £6000 there is no detriment to yourself in putting down these figures. |
| Bridgewood |
Posted - 06 July 2010 : 11:55:26
Hi David
As Daniel said, you put the value of the property down at what you believe to be market value for it, and you put the mortgage amount down for whatever the current balance is (you could either include the early settlement penalty in the amount owing and make a note about it, or show it separately) as long it is clear to the OR that there is a penalty to add to the mortgage if its redeemed before a certain date
Don't worry about whether or not there is a shortfall - that is something the OR will deal with.
If the OR/trustee doesn't sell the property, and you don't pay the mortgage it is more than likely that the mortgage company will sell it eventually.
I know different mortgage companies act differently, but I would suggest you ask the OR what he wants you to do with the keys, and if you don't get a sensible answer from them, hand them back to the mortgage company - but don't sign anything.
Bridgewood specialise in helping people deal with their debts and make the most of their financial situation - providing free, no obligation debt advice.
We can also setup a complete range of solutions including debt management plans, IVA and bankruptcy support. |
| David.rl |
Posted - 06 July 2010 : 11:32:47
Thanks Daniel,
If this is the case, why do so many people advise to put £1 down on SoA as potential shortfall?
Also if I tell the OR that I dont want the house and they decide not to order a sale but come back to me within 3 years to offer me any BI, do I then have to do a voluntary repossession or will the OR just order a sale? I will never want to live in this property again, as it is 300 miles away from where i now live.
Thanks for the help
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| Daniel Griffiths |
Posted - 05 July 2010 : 22:06:27
You cannot calculate potential shortfall on the SOA because you dont know if there will be one, you show the property on the secured creditors list valued at £118000 because that is its current market price and the total amount owed on it at the time which will include arrears, I understand you say its £112000 showing a £6000 equity, which is an assett in your SOA
The OR will possibly appoint a trustee you simply tell them you are not living there and not interested in buying the interest in the property, they will deal with it. Any future potential shortfall in this property is a provable debt in bankruptcy which is what I guess you want to hear |
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