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Andrew.mh
Starting Member
3 Posts |
 Posted - 02 April 2012 : 09:58:19
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| I owe the bank £485k. I borrowed against 3 properties which are now valued at £400k (but will be sold for considerably less by the bank).They hold a second charge on my own property, with equity of approx £90k. I have been paying £5k per qtr in bank interest for past 3 years. I am now in default and the bank have requested loan payment in full, passing me over to their recoveries dept. and also threatening baliff action to recover interest owed. I accept I stand to loose everything. The question I am asking, can I declare my self bankrupt at this point so that I can be getting on with it (ie the sooner I am in it, the sooner I am out of it) or do I need to have the loan crystalised first to know what my final debt will be? Thanks |
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mydebtpages
Starting Member
43 Posts |
Posted - 02 April 2012 : 11:24:23
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Hi Andrew,
I think the short answer is probably yes, bankruptcy tends to work backwards in that you are bankrupt first and then everything is sorted out retrospectively. Any floating charge would almost certainly crystallize on bankruptcy. That does suggest that the loans are not directly secured on the properties at present which seems unusual.
If you accept that your property equity is more than matched by your liabilities then bankruptcy may well be a good way of moving on with the inevitable.
However your situation is clearly a complex one and you should make sure you fully understand the implications of bankruptcy and any alternatives that may be available.
The threat of bailiffs sounds a little overdone at present as you presumably have not gone through any court proceedings for either money or property possession.
Regards
- MyDebtPages |
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 02 April 2012 : 11:58:40
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Hi and welcome to the forum. As your circumstances aren't straighforward I would suggest you take advice before you do anything. Have a look at the experts' section at the side of the page.
View my blog at http://skippy13.blogs.iva.co.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 28th June 2010 and I'm now looking forward to getting married in September 2012 - I'm proof that you can go BR and come out the other side. |
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Andrew.mh
Starting Member
3 Posts |
Posted - 02 April 2012 : 12:08:44
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Thanks. Let me try and explain. I used to be a property developer, borrowing money from the bank to renovate, then sell and pay off the bank loan, making a profit. I had 3 separate loans which the bank consolidated into 1 loan. Each loan was secured against the property purchased with a second charge placed against my own property. Effectiveley each loan is secured against each other and also my own house. As a result of the recession the properties failed to sell and the bank insisted that the interest be covered on a qtrly basis. This was done by renting the properties to cover interest. But I have now fallen into arrears and the bank have issued formal notice that they require payment in full. Even selling the 3 properties and my own house does not cover the debt. Your assumptions re court proceedings, nothing to date, just threatening letters from the NatWest.I agree it is a complex case, I owe £485k to Natwest but have assets of £400k and I owe £100k personal mortgage to santander against an asset worth £200k, but the bank has a second charge against this. Effectively I owe £585k, with assets in the region of £500k. If I add my default loan the debt nears £100k and no means of repayment.
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 02 April 2012 : 12:15:00
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Hi,
You definitely need to speak to an expert - click on the experts link on the left hand side of the page and give one of them a ring. The advice is free.
Follow through
Make your dreams come true
Don't give up the fight
You will be alright
'Cause there's no one like you in the universe
Jan
xxx |
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mydebtpages
Starting Member
43 Posts |
Posted - 02 April 2012 : 13:29:51
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Hi Andrew,
In that case the answer probably becomes 'no', - it seems all your debt is actually secured and the general principle is that you can't go bankrupt on secured debt alone.
You will probably have to wait until at least one post-sale debt arises (or crystallises as you put it) unless you have other unsecured debt.
Regards
- MyDebtPages
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Andrew.mh
Starting Member
3 Posts |
Posted - 02 April 2012 : 14:17:11
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Thanks, that makes logical sense.
The bank are insisting I place my own house up for sale and pay off my first charge (mortgage provider) and pay them the remaining balance to reduce my debt. Presumably at this point the loan to the NatWest becomes unsecured and I would be in a position to proceed along the bankruptcy route if still appropriate. Thanks.
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mydebtpages
Starting Member
43 Posts |
Posted - 02 April 2012 : 15:10:31
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Hi Andrew,
Yes - not difficult to see why they would say that as it provides them with the shortest possible route to your £90k equity stake, which presumably goes straight to them under the terms of the security.
However I'm not sure that would make the Nat West loan then unsecured - from what you've said above it is also secured on the other properties? You might find you have to spend some time on clarifying the exact nature of the securities.
As long as you still have the £90k equity stake there may be some way you can use that to your advantage, but that probably doesn't involve bankruptcy.
Best Regards
- MyDebtPages
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Topic |
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Can I declare myself bankrupt ?
