|
|
 |
 |
FORUM |
|
> Browse and post on our forum |
|
|
|
 |
|
 |
|
Note: You must be registered in order to post a reply.
To register, click here. Registration is FREE!
|
| T O P I C R E V I E W |
| Sunshine_Girl |
Posted - 04 April 2009 : 21:22:29
Hi all
I've had the same problems as many of you in trying to get answers to the question over repossession and shortfall and it certainly is a grey area. My situation is that I went bankrupt but kept my home due to negative equity. I have a second charge (i.e. a loan secured on the property) as well as my mortgage and am considering voluntary repossession and including the shortfall as a discharged debt in the bankruptcy. However, I have found conflicting information as to whether this is feasible. The latest response from my examiner, however, was very interesting:
"My personal understanding of the situation is that providing the repossession happens within the bankruptcy period (that is before your discharge date) & that you have not bought out the OR’s interest in the property, & that you have not signed a deed of acknowledgement (in which you assume responsibility for the debt in bankruptcy), then the shortfall will be part of the bankruptcy & be discharged along with the other debts.”
More conclusively, I think, I found this on the Insolvency Service’s official website, at
http://www.insolvency.gov.uk/faq/faq.htm#16 :
“A debt which is secured by a mortgage or a charge on a property is still a provable bankruptcy debt. The mortgage loan company is "a secured creditor" which means they have rights over an asset, the house, and can require the asset to be sold to pay their debt. These rights are not affected by the bankruptcy.
On the making of a bankruptcy order the mortgage loan company could make a claim in the proceedings but, unless it wished to give up the security, could only claim for any (estimated) shortfall.
If you continue to live in the property it is likely that you will continue to make payments to the mortgage loan company to avoid the property being re-possessed. When the property is eventually sold any shortfall to the mortgage loan company is still a provable debt in the bankruptcy, even if you have been discharged, as you are released from the debt on discharge.
Your bankruptcy does not affect the obligations of any joint owner who has not been made bankrupt to repay the mortgage loan debt or any shortfall, as they are still liable for the whole of the debt.
After the date of the bankruptcy order the mortgage loan creditor may ask you to sign a "deed of acknowledgment" of the outstanding debt. If you have signed such a deed the mortgage loan creditor can take action against you to recover any shortfall following the sale of the property.”
If I’m not mistaken, this means I could either sell my property or have it repossessed and have the remainder owed on my secured loan included in the bankruptcy and effectively written off (bar the IPA). I have not bought out the beneficial interest or signed a deed of acknowledgement, so I must be eligible.
Are there any experts out there who could confirm my interpretation of all this?
Thankyou
SG x
|
| 15 L A T E S T R E P L I E S (Newest First) |
| John |
Posted - 07 April 2009 : 13:56:00
Hi
basically the difference is minimal, if you go for voluntary repo you call the tune, you say when the process begins.
But we also have a certain degree of control if you choose to allow the lender to follow due process, in that we know that there are procedures the lender must follow and we know that, following the 1st months mortgage/secured loan arrears, the process takes a minimum 6 months and may take a year depending on how proactive the lender wants to be.
John White
England Jackman & Spacey |
| ripski |
Posted - 06 April 2009 : 19:38:29
John, Thanks for the clear,non-jargon English advice. What is the difference between repo and voluntary repo.
ripski1 |
| Melanie.n |
Posted - 06 April 2009 : 12:43:55
Just as a final note (and well done, John clear concise advice as always. I am always on a crusade against technical jargon!)
If anyone reading this suffers from numerous calls from creditors be they secured creditors or credit card companies etc, I always advise my clients that if they receive over 3 calls in any 24 hour period from a creditor - to state to the caller that 'their actions are bordering on harrassment and if they do not stop the harassment you are going to report their actions to the Trading Standards Office' -you do not have to follow up with the complaint to the Trading standars office but the threat does stop the calls!
Melanie Nicholas
28 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
email me at melanienicholas@jonesgiles.co.uk
|
| John |
Posted - 06 April 2009 : 07:50:27
Hi
yes "OR having the debt in bankruptcy" would mean it is included and written off.
If the property is in negative equity or there is a small sum of equity and you plan to move out,and you plan to declare bankruptcy, then surrendering the property makes more sense than trying to sell.
Even if you should find a buyer the lender(s) could object unless your mortgage and secured loans are discharged in full which, by definition, they won't be so why put yourself through the hassle.
Either way there will be a shortfall which will, as long as you do not sign a deed of acknowledgement, be included in your bankruptcy.
Likewise if you're giving up the property you should not attempt to purchase the BI back from the OR.
Again if you plan to give up the property you should consider stopping the mortgage and secured loan repayments. From the first month's arrears it would take a lender the best part of 6 months at least to gain possession and serve an eviction notice.
And finally, if you will be renting having given up the property it is easier to secure a rental, as credit checks are undertaken, before declaring bankruptcy.
Timing of dealing with each issue is the key.
John White
England Jackman & Spacey |
| ripski |
Posted - 06 April 2009 : 07:15:57
I am in the same position. I seem a bit thick but in plain English does the 'OR having the debt in Bankruptcy ' mean that this is part and parcel of my debts which are then discharged.
Negative equity of prob £30000 and a secured loan of £5000. If there is a poss of this remaining with me and into retirement then why go BR ?
I was planning to stay in the property and pay mortgage until it sold but I'd rather move now if there is any chance of the debt continuing as it would be quite a millstone and not be the fresh start I had hoped for.
If someone buys the BI does this mean that I or 3rd party is laible for the shortfall rather than the OR If I renmianin property for 12 mths and am then dischrged. It sounds as it I should go for voluntary repo now to make sure and then will the debt be taken off me ?
ripski1 |
| Sunshine_Girl |
Posted - 05 April 2009 : 21:04:16
I'm guessing the legal document they wanted you to sign was a deed of acknowledgement, which would have made you liable for the shortfall, and you were right not to sign it!
And you're welcome.
Best wishes
SG |
| dannyboy30 |
Posted - 05 April 2009 : 20:37:44
thanks all,
its good to know some things that will have them spitting feathers i like the one about getting the security questions wrong lol , the SL company are very aggressive, when i defaulted on it and the sale was going to happen they even sent me a shortfall pack to in which they wanted me to sign all these legal documents going along the lines of if the sale goes through i would agree to pay the money back as a unSL and if i was to purchase another property in the future they could put the SL back on the new property, also to sign saying that i agree for them to get any info on me if they required.
I actually went the CAB and they told me under no curumstances should i sign any of it, they were very shocked to see this happening.
Chester when i spoke with SL company sat they were aggresive and i warned the women if the calls continued it would be classed as harrassement which i would take further, after repeating this several times she eventually backed off and said right thank you very much and put the phone down ( should of put this in first post lol )
As with the house as its stands now i think that the mortgage company might struggle to get back their money ( 119,000 ) so the SL could be P***ing in the wind for thiers as the house prices keep going down.
thanks once again for advise, sunshine girl i hope we both get the outcome we want
|
| chester2005 |
Posted - 05 April 2009 : 15:33:57
did i not read somewhere that people like this can be prosecuted for harassment or at least reported to the financial ombudsman?
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
Life's too short!!! |
| Jane.l |
Posted - 05 April 2009 : 10:44:07
Dannyboy, I can totally sympathise with you, as this is exactly what happened to us and was the main reason for our bankruptcy. Our secured loan company have told us the same, luckily we changed the phone number so they do not ring anymore, although they did ring hubby at his work once asking for payment, even though the house had been repossessed and sold and we were bankrupt. They have even done a "search" on our credit file only very recently, presumably to find out where we are now living so I will not be too surprised if they contact us again, I will just ignore them, they are WRONG |
| Niobe |
Posted - 05 April 2009 : 10:41:39
Or just totally refuse to answer the security questions at all - they cannot continue at all then.
Just tell them you won't answer them as you don't know that they are who they say they are and you don't want your identity stolen!
The glimmer gets brighter all the time
Jan
xx |
| chester2005 |
Posted - 05 April 2009 : 09:38:48
Honestly it does work they normally hang up on you!!!
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
Life's too short!!! |
| Sunshine_Girl |
Posted - 05 April 2009 : 09:28:09
quote:
Originally posted by chester2005
...One method I've found that works is to get security questions wrong when they call. They can't continue the call then...
Haha, I love it! Chester, you've made my day! |
| chester2005 |
Posted - 05 April 2009 : 09:18:57
Dannyboy, i would either try to ignore these nasty poeple when they phone, one method i've found that works is to get security questions wrong when they call , they can't contibue the call then.
When you are BR the OR is the only person you are responsible to, if you have handed the keys back to the house.
The mortgage provider will take their money when sold if they have 1st charge and then the SL company can have their money if its there, anything left after that is the ORs.
If there is not enough equity to pay the secured creditors then the debt becomes unsecured and is covered by BR
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
Life's too short!!! |
| Sunshine_Girl |
Posted - 05 April 2009 : 09:08:25
Hi Danny
Thanks for the reply and sorry to hear about your situation.
Two things spring to mind, based on my own experiences:
1. The ringing around the clock thing is commonplace and standard, with both secured and unsecured debt. I got that from my credit card companies. They stopped eventually but only after several 'phone and postal requests and a lot of frustration!
2. If your secured loan company is like mine, they will twist the law to try to keep you on, even going so far as to lie through their back teeth. My examiner gave me some invaluable advice on this, which is that when the company tells you you aren't eligible for having the shortfall discharged or anything else about which you are sceptical, ask them to quote/cite the law or legal provision under which they're claiming it!
Good luck anyway!
And many thanks to Mr. Johns for the response. I'm in your debt. Sorry, I bet you get that a lot!
SG |
| dannyboy30 |
Posted - 05 April 2009 : 08:56:11
hi sunshine girl,
i have sort of the same problem, i was declared br on 24/3/09 and yesterday had a call from secured loan company, i stated i have been made br but before i could finish the women on the other end said i will stop you right there, even though you have been made br you are still laible for the money as its secured against the property you own and will be until the property is sold.
Baring in mind that in oct 08 we accepted an offer for the house of £134,000 leaving a shotfall on just the secured loan of approx £30,000. At the time the estate agent and the solicetor had made phone calls to SL company stating that this is the best possible price they would expect to get in the currant housing market, SL company forced the sale to fall through which has led to my br.
Back to the phone call,i responded with the house with which the loan is secured against has now been repossessed by the mortgage company and is in there hands,i also stated not to keep contacting as that the OR will conatct them with all the deatails, i was then basically told that they will continue to keep ringing me which consists of as least 6-7 phone calls a day as they want there money, now this bit is very stress full as i dont want to answer my phone anymore.
So basically im after the same answers as you, which is can they keep harrasing me and will the shortfall be included in br, its nice to know that its not just me in this situation.
Dan |
|
|
| bankruptcyhelp.org.uk Forum |
© bankruptcyhelp |
 |
|
|
|
|
 |
|
|
|
|
|
