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David F
New Member
United Kingdom
58 Posts |
 Posted - 15 January 2010 : 16:49:11
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Hi All,
I own a house with approx. £20k of equity based on current market values in my area. House worth £210k / secured debt £190k.
I have unsecured credit debt of £125k across 16 creditors all on token payments.
I am currently on benefits after losing my job but I also receive interest relief payments so I am able to meet my secured debt monthly payments.
Would bankruptcy be an option for me without losing the house?
Would the OR use current house values or a "Forced" value when
working out the equity in my house?
If there was equity for the OR to realise could I sell this to a relative and if so, how?
Many thanks for any help / advice,
David |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 15 January 2010 : 17:57:32
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Hi DAVID
welcome to the forum
How long will the interest relief payments last for ?
bankruptcy is an option, the house with 20K worth of equity could be considered an assett and as such the OR could instruct a sale, you would be given a year to move out of the house.
you are quite right in thinking about a forced sale valuation, the OR should use that one but it may be appropriate to get seperate valuation of your own.
The buying of equity or ownership is called beneficial interest,a set process dictated by the OR
at your early stages of research for BR do not rush into getting a court date, speak to one of the experts listed to the left, and establish a plan to get into and a year later out of bankruptcy.
regards Richard |
Edited by - Richard P on 15 January 2010 17:58:20 |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 15 January 2010 : 18:17:15
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If there is 20k of equity in your house unfortunately this would be required to be paid into your BR, either by the house being sold, or by someone buying your beneficial interest.
It is possible for a relative to buy the benficial interest to enable you to keep the house, this happens a lot. You would still be responsible for the mortgage and any secured loans.
How long will the interest relief last, and will you be able to keep up repayments on the property once it has?
I would recommend taking advice from one of the experts who post on here - their contact details are in the 'experts' section at the side of the page.
There's a lot to take into consideration so please make sure you've spoken to someone before making any decisions.
Good luck, and please keep posting x
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
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David F
New Member
United Kingdom
58 Posts |
Posted - 15 January 2010 : 18:20:54
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Hi Richard,
Many thanks for the helpful advice.
Am I right in assuming that if the OR uses a "Forced" sale valuation that I may only have to pay in a much smaller sum to cover the equity?
My thought process is that I would ask a family member to buy out my beneficial interest and therefore keep the house.
Would the OR agree to this at the outset of a Bankruptcy or at the end of the 12 months. Obviously at the end of the 12 months the property could be worth more.
Would I have any guarantee that the OR would allow me to sell my beneficial interest and keep the house?
Sorry for so many questions....... thanks again.
David |
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David F
New Member
United Kingdom
58 Posts |
Posted - 15 January 2010 : 18:23:52
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Hi Skippy and Richard,
Many thanks for the great advice.
In answer the Interest Relief, the payment is guaranteed for 2 years which would be up in Feb 2011.
Thanks,
David
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 15 January 2010 : 18:49:09
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Hi David,
Welcome to the Forum. An interesting scenario.
I suggest that you contact three independent estate agents in the town/city where you live. Do NOT (my own bias I am afraid - see my bio!)use a corporate estate agent.
Say to them that you are unemployed and have a chance of work elsewhere - and are looking at re-location. DO NOT tell them you are considering BR as they will probably not do the valuation as they are not going to get an instruction.
After you have the three valuations, you will be able to see the "mean" value.
Then see what you owe to your lender.
As you say the interest will be maintained for 2 years by the DWP/Jobcentre Plus - so you will be able to afford the difference (if any) for the immediate future
As to the BI, wait to see how the valuation stacks up and post again in a couple of weeks and we can take you through to the next option.
I am assuming a few weeks will not put you into a worse situation than may exist at present.
Is the property in your sole name or as joint tenants?
Are there any arrears at the moment?
Is there a second charge?
I have been very fortunate in my BR (fingers crossed as I have 4 months to discharge!). My wife has bought the BI in our principal home and that is with TFT (The ORs solicitor) at the moment.
My wife is also buying the BI in a BTL - there is a positiver valuation on that house and she is having to make a contribution of a few thousand on that transaction (Not with solicitors as yet - in train....)
Be aware that the market is rising - faster in some areas and a trickle in others - a factor that can make it fall or stand I have to say.
Good luck my friend and post back as necessary and I and others on the forum will try to assist you. Best regards, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and hero of mine!!) |
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David F
New Member
United Kingdom
58 Posts |
Posted - 15 January 2010 : 19:13:38
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Hi Richard,
Many thanks for the reply, this forum is amazing, so many well informed posters (wish I'd found it years ago)....
In answer to the questions you raised:
Financial situation is stable so no major hurry just my own desire to get closure to what has been a hellish few years of debt worry.
The mortgage is completely up to date and on interest only, I also have a secured loan, again this is up to date but on repayment. I am managing both on my benefits OK.
The mortgage is in my name only. The only complication is that the mortgage tracks the base rate, so if that goes up so would my monthly payments.
I am hopeful I will get a job during this year and don't have any objections to contributing in to my bankruptcy for a further 2 years if I do.
My main focus is keeping the house and finding a solution to the unsecured debt. I will certainly take your advice and get 3 valuations as it will give me a better understanding of my options.
Thanks again and its great to hear your story and that it seems to be going quite well for you.
Good Luck and thanks again.
All the best,
David |
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debtinfo
forum expert
2826 Posts |
Posted - 15 January 2010 : 19:28:34
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| if you include the secured loan is their still £20,000 equity |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 15 January 2010 : 19:32:00
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David hi again,
Yes, I have "survived" the BR quite well.
I was a very successful person up to a couple of years ago - in monetary terms - if that is a measure of sucess!?
I never thought that I would go BR - but hey, worse things have happend. My downfall was borrowing too much and when things went quiet, I found things tight at first, then last April/May broke down.
I had not told Sue, my wife about the borrowing and the practice I had was a family practice - so, when it went down, it affected our eldest daughter as well and her family and my wife worked part time for the business too - so a ghastly year - ended well though, with a third grandchild born a few days before Christmas 
BR is not the end of the world... I was talking to my GP yesterday who is thinking of BR after a messy divorce!! I was counselling him...!!
I am sure from what you have described, even if BR is the route, you will be fine - come back after the valuations (or before if you have questions).
The insolvency experts that post here are worth making contact with Melanie and Paul in particular
There are some good posters on this forum and, as I said, some excellent experts (even though I am one!) I say that with tongue in cheek of course!! I enjoy sharing ideas with others who have had the same problems as me.
best regards, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and hero of mine!!) |
Edited by - Housing on 15 January 2010 19:37:02 |
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David F
New Member
United Kingdom
58 Posts |
Posted - 15 January 2010 : 19:54:17
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Hi Debtinfo,
Yes, the mortgage + secured loan combined are approx. £190k possibly slightly more. The house is worth approx. £210k based on what houses are selling for in my area.
David |
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David F
New Member
United Kingdom
58 Posts |
Posted - 15 January 2010 : 20:15:14
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Hi again Richard,
I am so pleased that your situation is improving and that bankruptcy was the right move for you. I have spoken with both Paul and Tina (Melanie's assistant) and have a telephone meeting with Melanie next week.
I am so amazed at the help I have received from this site and I am beginning to feel that there is hope for me yet.
Fantastic news on the third grandchild, congratulations to you and best wishes for a speedy discharge.
All the best and thanks again,
David |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 15 January 2010 : 20:33:01
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David,
Thank you for your kind coments.
I am pleased that you are seking advice from the insolvency experts.
I know that both Paul and Melanie are excellent people and will give you good quality and honest advice.
I have met Paul and have had many emails with Melanie - if you are in touch with either of them send "Housings" good wishes.
have a great weekend, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and hero of mine!!) |
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David F
New Member
United Kingdom
58 Posts |
Posted - 26 January 2010 : 17:21:04
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Hi everyone,
Quick update............ OK, I have today received the Redemption statements from Barclays (Mortgage) and from GE MOney (secured Loan):
Barclays £170,000
GE Money £21,000
I have also received 2 x Estate Agent valuations, 3rd one tomorrow. These were based on a "quick sale" due to relocation for new job (thanks Housing for the suggestion):
1st one at £195 to £199k
2nd one at £200 to £205k
Estate agent fees seem to be around the 1.5% mark so with legal fees and the dreaded HIP I could potentially be looking at total costs of £4k to sell it.
SO,,,,,,,,,,, based on this would I be right to assume that the BI would be £5k?
Can someone let me know if this sounds OK and when would the OR look at the valuation/BI? Would it be agreed at the outset of BR or later on, say after 6 months?
Would the OR do his own valuation?
I have also spoken with Melanie Giles, and Paul at Reviva (both amazing) They both recommended BR (depending on the House valuation, however an IVA could be an option if I get a job soon.
There are still lots of "ifs, buts and maybes" but I am under no pressure at the moment from my creditors so I am using this time to research my option and focusing on finding work.
All the best and thanks for any help/advice you can give.
David |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 27 January 2010 : 11:42:22
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Hi David
The OR will undertake their own valuations and as can be seen from numerous threads, they do not have a set system, some people are happy with the valuation others question if they have valued the right house !
They will probably not value your house until you come to purchase the BI back (3 - 6 months after BR).
as far as i am aware they do not as a general rule include estate agent fees or redemption again depends on OR region.
was all too complex for me and i needed the support of Paul / Ken at Reviva, so pleased that you found your phone call with them helpful
regards Richard |
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Bankrupcy and Property Valuation
