If your property had about 5k equity in in before any redemption figures are taken into consideration would they still want too sell the house are would you be given an opportunity to buy out the interest or are they more likely to wait and see how much more equity there is goig to be in it after the 12 month period.
Hi Jane redemption penalties are unavoidable if they exist. Therefore if you had £5K equity and you were still within the redemption penalty period the property is more than likely then in negative equity. Irrespective of where a redemption penalty exists or the amount of equity in the property, you would always have the option to pay the OR a sum equal to the BR's interest / equity before a forced sale is considered. The OR or trustee has up to 36 months, not 12, to wait for the equity in the property to increase. So each case would be dealt with on it's own merits and the decision would be down to the trustee. In today's property market the trustee is unlikely to wait if there is only minimal equity such as in your example as property values are likely to continue to fall for some time to come.
Thank you for your quick reply. One of my husbands creditors is trying to get a charge on the property for about 17,000 an if they acheive this which i think they will what would happen if we later went bankrupt as the property would be about £12,000 negative equity not taking into consideration the redemption figure. Would the or allow us to pay £212 to buy his interest or is it again he could possibly think about holding of for 3 years too see ow much equity would be in the property at that time.
Hi if the charge is in place prior to BR then you will almost certainly be able to buy your husband's BI due to the level of negative equity. Obviously that would mean that the creditor holding the charge would be paid in full if you sold the house in the future and the value had significantly increased. However, if he goes BR before the charge lands the debt would be written off and therefore not payable in the future.The decision is of course yours.