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Kirsty.tr
Starting Member
5 Posts |
 Posted - 29 May 2012 : 20:08:09
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| Hi, myself and husband are in negative equity in a jointly owned house. We are considereing facing bankruptcy to relieve us of our business debts and personal guarantees to release us from a long lease. Our house is part renovated and as such is in neg equity. RICS valuation £400k. O/s mortgage int only is £422k plus secured loan of £45k. Our repayments are £1800 mortgage and £478 secured loan. WE WANT TO KEEP OUR HOUSE and want to buy the BI out straight away but we have been told by CAB that there may be a problem with this due to the high amount of mortgage and secured loan monthly payments in comparison to renting another property -I am confused and will have to soldier on if the house is at risk. we want to finish renovating our house in our own time without the risk of losing it later on. Any advice would be welcome. |
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debtinfo
forum expert
2826 Posts |
Posted - 29 May 2012 : 20:38:13
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| how much debt do you have, what are rents in the local area and how many are in your family |
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RHB
Senior Member
1159 Posts |
Posted - 30 May 2012 : 13:51:20
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| That's a hefty sized mortgage - are you really sure you can afford it if the business is failing? |
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year 2029
Average Member
590 Posts |
Posted - 30 May 2012 : 15:38:53
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Hi.
If its your family home, I cant see anywhere that it states if you are in negative equity that the OR can make you sell your home if you can afford the mortgage.
Mortgages are part of priority debts, and if you wish to keep your home, the OR/Trustee would actually advise you to keep up payments.
The OR/Trustee, would then look at your disposable income after priority debts and 'normal' living expenses to see about setting up an IPA or IPO.
You might actually be 'lucky' that rules work extremely well in your favour.
If anything I have said is incorrect, hopefully one of the experts will pick up on it.
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Views expressed are my own personal views, based on what has happened during my own BR process unless otherwise stated.
Professional advice should always be sought. |
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trabon09
Starting Member
4 Posts |
Posted - 30 May 2012 : 16:01:10
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| There is myself and husband, and daughter aged 10. Debts could be as much a £300k for my failing business and husband has personal guarantee for lease. Outgoings are £1800 mortgage and £478 secured loan. My husband has separate business and can afford these repayments. we are just trying to free ourselves from a failing business so we can move on. My husband has paid the mortgage / loan for the last 10 years. |
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year 2029
Average Member
590 Posts |
Posted - 30 May 2012 : 16:07:27
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Hi again,
Just to clarify, you would both be filing for BR?
Is your husbands business one as 'sole trader'?
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Views expressed are my own personal views, based on what has happened during my own BR process unless otherwise stated.
Professional advice should always be sought. |
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trabon09
Starting Member
4 Posts |
Posted - 30 May 2012 : 16:15:01
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| Hi, my husband would have to file for BR too because of personal guarantee. He has tax debts which he is managing monthly. He has a limited company but could revert to sole trader if need be as he has only just gone Limited this year. ??? |
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trabon09
Starting Member
4 Posts |
Posted - 30 May 2012 : 16:16:44
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| PS rents in area are approx £1200 - £1500. However there are not many rentable properties on the market. |
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Viki.W
forum expert
United Kingdom
2211 Posts |
Posted - 30 May 2012 : 16:26:21
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Hi trabon,
It is unlikely the OR will allow you to pay £2278 per month for your home.
Whether your home is in negative equity or not, if the OR thinks that the mortgage/secured loan payments are excessive, then they will knock it down to free up money for an IPA.
I really suggest you speak to an expert asap.
Viki Warbrooke
Vincent Bond & Co
If you would like free advice on all options available and help with your bankruptcy petition please contact me at http://www.vincentbond.com/about_us_Viki_Warbrooke.asp |
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trabon09
Starting Member
4 Posts |
Posted - 30 May 2012 : 16:34:51
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Hi,
So if the trustee/OR doesnt let us pay that then this will prevcent us from paying the mortgage /secured loan and the house will get repossesed without these payments and we will lose it anyway??? so it looks like BR is not going to work for us??? I thought that neg equity would be in our favour - I am still confused.
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debtinfo
forum expert
2826 Posts |
Posted - 30 May 2012 : 18:19:29
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| Part of bankruptcy is about repaying as much to creditors whilst maintaining a reasonable lifestyle. If you are essentially paying £750 -£1000 pm more than you need to for a suitable residence then that is not reasonable that is £36,000 over the live of an IPA that could be being paid into the bankruptcy. |
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xmas baby
Average Member
537 Posts |
Posted - 01 June 2012 : 11:54:45
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Hi Kirsty,
I must admit £1800 sounds like a huge amount for a mortgage and similarly with rents of £1200 - £1500. Which part of the country do you live in for those kind of rents.... London? I tend to agree with Viki in that the OR will probably not accept that high amount of mortgage (or rent). I also think you might have to put a hold on any renovation work for the time being.
xmas baby |
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year 2029
Average Member
590 Posts |
Posted - 03 June 2012 : 12:12:33
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Debtinfo,
Can the OR make you sell your family home if you are in negative equity?
Surely the OR would ask everyone to 'downsize' their house to free up extra money if that was the case?
Although £1800 is a lot for a mortgage, everything is relative.
We dont know what their disposable income is, and they have already said that their husband can afford those payments.
My mortgages were well in excess of £1800, and if I could have afforded them, I would of had to pay them all as priority debts. Instead I gave some up for reposession.
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Views expressed are my own personal views, based on what has happened during my own BR process unless otherwise stated.
Professional advice should always be sought. |
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debtinfo
forum expert
2826 Posts |
Posted - 03 June 2012 : 13:22:26
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The OR would not physically apple for an order of sale, but what they can do is only allow a smaller amount for the mortgage, leading to a higher IPA which can be enforced by an attachment of earnings. Now that would obviously leave not enough to pay the mortgage and lead to the enevitable repossession, unless someone else subsidesed them.
You are right that peoples situations are relative both in the area they live and the size of their family. That is why there is no absolute value for a limit, It is judged on what is reasonable for the size of family in the area they live. In this case the OP has already stated that a reasonable rent fo the area is much less |
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Viki.W
forum expert
United Kingdom
2211 Posts |
Posted - 03 June 2012 : 14:19:08
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Year 2029,
The OP has stated that both her and her husband are going to be declaring bankruptcy and they have one child and can rent for cheaper in the area, so as Debinfo has posted, the OR would probably not allow all of the expenditure for the mortgage and secured loan in their case.
However, this might not be the same for someone else declaring bankruptcy, it all depends on the needs of the family etc.
Unless a family member or friend could make up the difference for them whilst they are paying an IPA it is likely that the home would be repossessed.
Trabon/Kirsty, please have a chat with an expert to go through your options.
Viki Warbrooke
Vincent Bond & Co
If you would like free advice on all options available and help with your bankruptcy petition please contact me at http://www.vincentbond.com/about_us_Viki_Warbrooke.asp |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 03 June 2012 : 14:41:22
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I agree with Viki - please speak to an expert (details on the left hand side of the page) to sort out what is right for you.
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
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We want to finish renovating our house without the risk of losing it later on
