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chris.tt
Starting Member
1 Posts |
 Posted - 04 May 2010 : 12:53:13
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| Hi I was declared BR Aug 2009, will any short fall from repossession sale of my house fall within the bankruptcy or if it is not done after or close to discharge am i still liable like the mortgage company keeps telling me? |
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Bridgewood
Junior Member
United Kingdom
222 Posts |
Posted - 04 May 2010 : 12:59:36
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Hi Chris
On the assumption the mortgage was in place on the day you went bankrupt, any shortfall is a claim in your bankruptcy, and they can't pursue you for the debt. It doesn't release any joint mortgage holder for the debt though.
I would give the mortgage company details to the OR and the OR details to the mortgage company and tell them to speak to each other.
If you keep getting contacted by the mortgage company refer them to the OR
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. |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 04 May 2010 : 13:33:12
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The shortfall when the house sells will fall into the bankruptcy estate - unless you have already purchased the Benecial Interest from the OR.
Unfortunately lots of the mortgage companies don't understand insolvency very well and often keep on with the old record.
More worrying is the time taken to actually reposess a property and increasingly mortgage companies seem to refuse voluntary hand backs. I have seen cases where the goverment owned banks still haven 't reposessed even 8 months AFTER discharge. The problem here is that council tax could become liable.
The cynical amongst us might think that the banks are cooking the books so they minimise any impact on the share price.
You would think there is an election soon!
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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Blair
Starting Member
27 Posts |
Posted - 04 May 2010 : 15:46:58
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| If you have already purchased the Beneficial Interest from the OR, but default after the bankruptcy and have house repossessed, can the mortgage shortfall not be included in the bankruptcy? |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 04 May 2010 : 16:06:46
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sorry Blair
the answer is NO, you have incurred a fresh debt.
when you sign to buy back the BI you are purchasing the positive and negative of property investment.
regards Richard
Richard |
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Blair
Starting Member
27 Posts |
Posted - 04 May 2010 : 16:23:01
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Thank you Richard
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 04 May 2010 : 21:26:11
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That is why it is critical not to rush the BI and be absolutely sure about the house
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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Daniel Griffiths
Junior Member
United Kingdom
268 Posts |
Posted - 05 May 2010 : 10:15:39
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Hi Blair
I have to agree with Bridgwood on this subject, buying the beneficial interest on the property does not make you liable for any fresh debt, the shortfall on a repossessed property is a provable debt in bankruptcy released upon discharge, you cannot reinherit this debt after any length of time or by buying any beneficial interest, unless only if you sign a "Deed of acknowledgement" with the mortgage company many debt advisors do not understand this however if you email the insolvency service direct,http://www.insolvency.gov.uk/contactus/general.htm you will get confirmation of this,
hope this helps
Daniel Griffiths |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 05 May 2010 : 10:31:19
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The problem is that most mortgage companies ask you to sign such a document and as such the debt becomes live again.
I believe it is only a matter of time before a mortgage company successfully challenges this position in court.
Their position being " is it reasonable that Mr X petitions for bankruptcy, buys out the beneficial interest and then 10 years later decides that they don't want the house so hands it back to the mortgage company without penalty".
This surely encourages everyone to petition for bankruptcy, buy the BI and therefore protects them agains any shortfall whatsoever in the future.
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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debtinfo
forum expert
2826 Posts |
Posted - 05 May 2010 : 21:54:49
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As the position stands though it is the sihgning or an agreement with the mortgage company no the buying of the interest itself which makes the bankrupt liable again.
In reality some mortgage companies may ask for one to be signed when buying the BI back, also in the 10 year scenario the bankrupt may have renegotiated or changed mortgage company which would again renew the liability.
one would also say in the 10 year scenario that the mortgage company has had 10 years of payments, there is likely to be be less negative equity because of capital growth and the bankrupt has had the penalty of the bankruptcy in the fisrt place so i doubt that they would ever be in a worse situaton because of the current rules |
Edited by - debtinfo on 05 May 2010 21:55:12 |
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Hi I was am i still liable for short fall
