| Author |
 Topic  |
|
Worried Essex
Junior Member
United Kingdom
193 Posts |
 Posted - 14 July 2008 : 09:39:08
|
Hi - I am after some advice. I am 37, Married with 3 young children, (5,2 and 1 week old!). We own our own home, it is in my sole name, Mortgage with the Halifax, 2 months mortgage arrerars and around £10K of equity. A deed of trust registered at Land reg in August 2007 recognises half the equity belongs to my wife of 6 years, with who'm I have lived for 10 years. I was made bank rupt on 24 June. I am meeting the official receiver on 21 July. I need some advice. We are absolutely desperate to keep our family home, as losing it would make it almost impossible to get back onto the property ladder in the future, and the location is ideal for schools and family. My wife would like to make an offer to the Official receiver to purchase her share of the equity (5K or thereabouts) - we have 3 valuations from local estate agents to support our indication of value etc. However, I have been told, 1) they do not have to accept the offer from my wife and could still force the sale, 2) they can still force a sale if our mortgage is higher than the cost of renting locally.
Our Mortgage is £2,200 per month. We could rent locally for £1,600 per month, e.g. a difference of £600 per month between rent and mortgage.
On this basis, can the OR still force a sale or what is the best angle for us to make an offer and remain in the home and have the interest passed to my Wife, e.g. so she owns the full 100%?
|
|
|
melanie_giles
Senior Member
1191 Posts |
Posted - 14 July 2008 : 10:29:30
|
Hi there and welcome to the forum
I'm not sure who has been advising you, but an offer from your wife of £5,000 in the circumstances you describe would appear to be a good one. Unless they question the level of your valuations, which they can then confirm by commissioning a valuation of their own, they would be unable to get a possession order over the property given the low equity value, so I would make the offer and keep us informed of your progress.
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 |
 |
|
|
Worried Essex
Junior Member
United Kingdom
193 Posts |
Posted - 14 July 2008 : 10:45:08
|
| Thanks for that, what is the position of the fact we could rent for less than our mortgage? Is there truth in the fact that they could force a sale on that basis, e.g. we could rent for £1600 but the Mortgage is £2200 - e.g. save £600 per month and use that to help pay off creditors? Appreciate your assistance thus far. |
|
|
|
JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 14 July 2008 : 10:59:47
|
Hi Worried and welcome to the forum.
Secured lending is excluded from BR, so the OR wouldn't force the sale as that would result in an increase in your debt (the property would likely go to auction and only realise 75% of the market value). Therefore, the OR would likely seek an offer from your wife, and from the information you have provided, £5k should be enough to keep the property (assuming the value hasn't fallen further).
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
|
|
|
Worried Essex
Junior Member
United Kingdom
193 Posts |
Posted - 14 July 2008 : 11:03:21
|
Thanks for that.... helping to ease my mind. What about the positon as described abive, e.g. making us sell and then rent, remembering the home is in my name with a deed of trust to recognise 50% of the equity is Jennies.
|
|
|
|
JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 14 July 2008 : 11:05:46
|
Hi Worried,
The OR cannot make you give up your home in order to rent somewhere cheaper. In fact, if you were renting somewhere for £3k a month when you go BR, the OR cannot make you rent somewhere cheaper (they may not like it, but there is nothing they can do about it!).
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
|
|
|
Worried Essex
Junior Member
United Kingdom
193 Posts |
Posted - 14 July 2008 : 11:20:55
|
So, on that basis, a straight forward offer from my wife for my share the equity, and the deeds transfer to my name? and I continue to pay the mortgage I assume then and things are resolved. We are then free to continue living there or sell and move on at any stage. Is this the correct understanding?
How quickly can this be organised, bearing in mind we are meeting them on 21 July?
Thanks again for your help and assistance.
|
|
|
|
hammy0107
Junior Member
399 Posts |
Posted - 16 July 2008 : 17:09:05
|
Melanie / Julian,
Sorry to jump on the back of this thread but as you know i am in a similar boat with regard to trying to keep my home. You both make comments in this thread that have intrigued me and i would love more clarification of what you mean.
Melanie, you said: 'they would be unable to get a possession order over the property given the low equity value' - Why would they be unable to?
Julian you said: 'Secured lending is excluded from BR, so the OR wouldn't force the sale as that would result in an increase in your debt (the property would likely go to auction and only realise 75% of the market value).' - If this is the case and i wasn't to make an offer what would then happen?
Sorry again but i think you both know how worried i am right now. |
|
|
|
rollercoaster
Junior Member
United Kingdom
327 Posts |
Posted - 16 July 2008 : 17:40:36
|
| Me too?? |
|
|
|
melanie_giles
Senior Member
1191 Posts |
Posted - 17 July 2008 : 00:37:01
|
To answer the point addressed at me - the rules for granting a possession order over a property are that the Trustee has to demonstrate that this will enhance the prospects of recovery for creditors. As it is likely to cost far more than £5,000 to actually bring a possession hearing before the Court, the costs would outweigh the benefits so, for a start, a Trustee would be unlikely to proceed on such basis where he/she might be open to criticism.
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 |
|
|
|
hammy0107
Junior Member
399 Posts |
Posted - 17 July 2008 : 08:59:37
|
Melanie,
Thank you again.
Based upon what you say then if a property showed £10k equity and the OR was offered £5k to buy the £10k equity then this would be as good if not better result for the creditors than going for a reposession order. Example: Reposess - cost £5k +, Sell - Gain £10k equity (if very lucky), Funds for creditors - £10k minus £5k reposession cost = £5k. Am i understanding this right?
Sorry i know i am bombarding you with questions, but you are always so helpful (and from your pic it is obvious you as such a caring person)- creep creep |
|
|
|
Ian Richards
Junior Member
United Kingdom
296 Posts |
Posted - 17 July 2008 : 09:05:39
|
Hi Worried
You say that you are two months in arrears, that's a total of £4400!! So in affect your equity is £5,600 not £10,000 therefore the offer to the Official receiver should be lower than the £5000 that you have stated. Your offer should be more like £2,800.
I would certainly try this and stress it to the OR that that is what is owed on the property, after all fact is fact!
Its worth trying anyway.
Ian |
|
|
|
JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 17 July 2008 : 11:30:36
|
Hi Hammy,
The OR will need to realise your assets for the benefit of your creditors, which will include any equitable interest you may have in property. Therefore, the OR wil come to you first to make a deal.
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
|
|
|
hammy0107
Junior Member
399 Posts |
Posted - 17 July 2008 : 15:32:28
|
Hi Julian,
Firstly, if the OR came to me and i could not afford to buy the BI, and if the equity in question was about under £10k what would then happen? Melanie states that it would cost at least £5k to get a reposession order. If this is the case then it would be reasonable to believe that a forced sale would not realise the value of the mortgage. In this instance the OR would have paid out £5k + for the reposession, he would have no funds availble to my creditors and there would most likely be a shortfall to the mortgage company. Is this really a route they would take? If not then what would their options be? |
|
|
|
zoe
Junior Member
329 Posts |
Posted - 17 July 2008 : 15:53:30
|
Hi Hammy
the Mortgage would always be paid first as it is the first charge - the OR would not force sale unless worth their while.
I have also posted a reply to your other thread - hope this is of help to you.
|
|
|
|
hammy0107
Junior Member
399 Posts |
Posted - 17 July 2008 : 16:34:49
|
Hi Zoe,
Thank you for taking the time to respond.
Exactly my point, the OR would have to pay the mortgage first and in my case right now the equity in my home is £13k (if redemption charge is not taken into account) or £6k (if redemption charge is taken into account). If the OR was to reposess then surely with this little equity he is not going to realise any funds for my creditors. I am in a quandry as to what to do for the best. |
|
|
|
Topic |
|
Keeping my home after bening made bankrupt
