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kramsenrab
Junior Member
United Kingdom
199 Posts |
 Posted - 06 July 2008 : 21:02:09
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| we are going BR soon, and as the house has negative equity, we want to keep it. I understand that the BI can be bought for £1+ fees, but can we buy it or does it have to be a 3rd party. I have had conflicting advice so far. |
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John
New Member
United Kingdom
73 Posts |
Posted - 06 July 2008 : 21:46:52
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Hi Kramsenrab
If it were only one of you going into BR the other could, as you say, buy the BI for £1 + fees. As both of you will be going BR then it does need to be a 3rd party. |
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Dee
Junior Member
United Kingdom
215 Posts |
Posted - 06 July 2008 : 23:00:30
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This has been confusing for me too. Both my husband and I have gone BR and we have negative equity.
The OR has written to us quote
"It may be possible for me,as a trustee, to transfer the beneficial interest to you or a relative or friend"
The other thing I need to check out is whether the fees are doubled because there are two of us.
Hope this helps (or may be it will just confuse you further)
Dee |
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John
New Member
United Kingdom
73 Posts |
Posted - 06 July 2008 : 23:55:13
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Hi Dee
Has the OR written to you both individually offering each one's BI to the other? If so this looks like a standard format offer letter
( or at least a maybe ) which the examiner(s) dealing with your individual BR's will deal with in due course.
Once they pass beyond the standard issue of letters they will no doubt realise that both partners are in BR. It's therefore likely that at this point your respective "offers" will be more specific i.e only the friend or relative option will remain in each case.
Re the fees - there will be two charges I'm afraid.
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 07 July 2008 : 12:56:54
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Hi Assist and welcome to the forum .... nice to see another new name :)
The issue here is that you CAN buy your own BI, but you will be subject to an Ad Valorem charge which is 1% of the property value. Therefore, it is always adviseable to sell the BI to a trusted 3rd party (although the Ad Valorem charge will stand when you eventually buy the BI back).
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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Dee
Junior Member
United Kingdom
215 Posts |
Posted - 07 July 2008 : 13:04:02
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Hi Assist
Not sure what they mean but the letter to me has no mention of my husband at all in the letter. The letter is addressed to me and talks about my BR and offers me the option of buying the BI
Dee |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 07 July 2008 : 13:08:26
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Hi Dee,
Please remember that you and your husband are two seperate legal entities (despite the fact you are married) and have to be treated as such. No doubt your husband's letter will arrive shortly!
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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Dee
Junior Member
United Kingdom
215 Posts |
Posted - 07 July 2008 : 13:15:03
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Hi Julian
Sorry, my husband has received his letter also I was just trying yo explain to assist that that letters are indeed completely separate and mine has no reference to his BR and nor his mine. I cant understand why they would have a standard letter to be sent to a BR offering them the option of buying their own BI.
Time will tell as to the BI options.
Dee |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 07 July 2008 : 13:17:43
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Hi Dee,
Given that the transaction total will be circa £250 each, it gets the property dealt with which allows the OR to move forward with your case and (potentially) move for an early discharge. Be grateful ,they could have opted for a charge over the property which they would have 3 years to realise .... by doing it this way, it gets the property out of your BR immediately.
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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John
New Member
United Kingdom
73 Posts |
Posted - 07 July 2008 : 15:57:30
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[quote]Originally posted by Dee
Hi Assist
Not sure what they mean but the letter to me has no mention of my husband at all in the letter. The letter is addressed to me and talks about my BR and offers me the option of buying the BI
Dee
[Hi Dee, As far as I am aware then the "fees" due to be paid by you if you were to take up the OR's offer of buying your own BI would include, as Julain has already pointed out, an Ad Valorem fee of 1%. I'm keen to know how the OR proceeds in this scenario though. Please let us know how you get on with the BI./quote] |
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kramsenrab
Junior Member
United Kingdom
199 Posts |
Posted - 07 July 2008 : 18:05:38
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Thanks everyone!
So all in all as my husband & I are both going BR, we will have huge fees to pay!
However, will we be subject to pay 1% on half of the value of the house when paying the Ad Valorem, or 1% of the full value each?
So if house is valued at 200k, would we pay 2000 each or 1000 each?
I am so confused!  |
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Dee
Junior Member
United Kingdom
215 Posts |
Posted - 07 July 2008 : 18:47:37
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Me too. But like everything else I just take it as it comes.
So my understanding is that as our house is worth £120K my total amount is £211fees + £600AD and the same for my husband. If however we sell to a 3rd party we would pay just the fees + £1 but then have the 1% AD to pay after dicharge to buy the BI back.
Can we buy the BI back at any time? And who does the AD go to if the BR all done with?
Dee
kramsenrab sorry to hijack your post but as I seem to be one step ahead I'll let you know how I get on.
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kramsenrab
Junior Member
United Kingdom
199 Posts |
Posted - 07 July 2008 : 19:58:30
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No worries, Dee any advice is helpful! It does sound better if its just 1% divided between the two of us, still it's all a lot of money, when we're going BR because we have no money!!  |
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melanie_giles
Senior Member
1191 Posts |
Posted - 07 July 2008 : 22:25:30
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Julian
Forgive me if I am being thick, but I really don't understand your point about Ad Valorem charges unless I have misread it. Could you clarify exactly what you mean please?
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 08 July 2008 : 15:25:57
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Hi Melanie,
When you go BR, the ownership of all of your assets passes over to the Trustee/OR to deal with. Therefore, by buying your own BI, you are effectively buying the property from the Trustee/OR. The Ad Valorem charge is therefore akin to Stamp Duty. The Trustees/ORs normally offer the BI to a third party as a way around this. However, if the BR buys back their own BI from the third party at some point in the future, the Ad Valorem charge will still apply.
Hope this clarifies the issue.
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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melanie_giles
Senior Member
1191 Posts |
Posted - 09 July 2008 : 00:38:36
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No it doesn't - because this post is about the acquisition of a property at notional value, which then removes the asset from the estate. Ad Valorem fees are in no way related to Stamp Duty! And they are calulated at 17% of any asset value more than £2,000.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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Topic |
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buying BI
