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bearsndogs
New Member
51 Posts |
 Posted - 25 April 2012 : 11:30:25
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I’ve finally been forced by the Trustee to accept an offer for the sale of my house. Not happy, but feel I’ve been backed into the proverbial corner.
However, I wonder if anyone can answer me the following question. Some time ago, when “ambulance chasers” were trying to help with annulling the bankruptcy (didn’t happen, of course!), they said that I had to bear in mind the Secretary of State payment once the property was sold. I’d never heard of this and so looked it up on the internet, only to discover that it is a payment in the sum of approximately 22% of the sale price.
First of all, what on earth is it for? Surely, anyone who’s been made bankrupt has suffered/been punished enough. Secondly, where on earth is this money to come from anyway?
To illustrate – sale price : £110,000; mortgage, solicitors and agents fees : approximately £50,000. This leaves balance of £60,000 to be divided equally between hubby and me. HUBBY WAS NOT MADE BANKRUPT so, in theory, he can just clear off with his share – hopefully, he won’t do that!!
I hope someone knows more about this because it is beginning to concern me just a bit! Thanks.
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bearsndogs
New Member
51 Posts |
Posted - 25 April 2012 : 11:43:33
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Having read through the above, I realised I forgot to ask what happens if it's not paid. There's a shortfall regarding the bankruptcy anyway, so by the time everything's paid out in respect of that, there won't be anything left out of my share. If it IS obligatory, will my pension be taken from me to pay for it? Will my husband have to pay for it? Would I have to go to prison for non-payment of it - paranoia rearing its ugly here!!
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bearsndogs
New Member
51 Posts |
Posted - 25 April 2012 : 11:44:36
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Ugly head, I mean - sorry!
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debtinfo
forum expert
2826 Posts |
Posted - 25 April 2012 : 12:33:11
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| Hi bears and dogs, will give a fuller answer when I am home later, but there is no need to worry it is just to do with the order of payment. It is taken out of the bankruptcy assets not paid on top, so in your case, you pay the same but the creditors get less. The only time it would be a problem is if you have more assets than debts |
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bearsndogs
New Member
51 Posts |
Posted - 25 April 2012 : 14:28:07
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Thanks debtinfo. I look forward to more details later, but in the meantime, it does take the sting out of the tail!
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debtinfo
forum expert
2826 Posts |
Posted - 25 April 2012 : 17:42:00
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Hi Bears and dogs.
Basically it works like this say you have debts of £100,000 and they sell your assets of £50,000, That £50,000 becomes the bankruptcy estate ie everything that can be realised from you. You will never have to pay more than that just that whatever your bankruptcy estate is be that £1 or £50,000 it vests with the trustee, many people have no assets and so no money is realised.
Now from the bankruptcy estate there is an order that people get paid in. The first is any person that did work to realise the money so for instnace if it was the sale of a house then the estate agent solictor etc get paid first. Then the Official Receiver gets paid for your case. (your case costs a minimum of £1715 to administer (could be more) and when you go bankrupt you pay a deposit to the court towards this admin fee, the rest of this fee is now paid. Now obviously not everyone can afford this as they have no assets so the is where the Secretary of stare fee comes in, they take a percentage of the remaining monies (its a bit more complicated than a straight 22% but it is in that region) and that money goes into a big pot to pay off all the admin fees for cases where there were no assets. Effectively your individual creditors are losing out so that the fee for everyone else to go bankrupt is kept at a lower level.
Next paid comes preferential creditors, there are not as many as there used to be but the main ones are employees who lost out if the bankrupt was an employer, the costs of the creditor that made them bankrupt and certain types creditor who were taking distraint action when the bankruptcy happened.
After that if there is any money left it is shared prorata between all the other creditors.
Thats the jist of it,as always there are little expections and complications but theye are the main ones
Hope that helps
Just to add the main time someone could lose out is if say you had £50,000 of creditors and £100,000 of assets then the total paid would be all the creditors plus all the fees so you would end up paying more then the debts themselves, but that does not happen very often |
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bearsndogs
New Member
51 Posts |
Posted - 26 April 2012 : 09:41:27
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Hi Debtinfo,
Thanks for all the information. It was very helpful.
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| bankruptcyhelp.org.uk Forum |
© bankruptcyhelp |
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Secretary of Statement Payment
