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harbourmaster
Junior Member
346 Posts |
 Posted - 30 August 2008 : 21:54:20
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| We are just about to go into br next week. My question is what happens if we declare that we have equity in our houses and they are subsequently sold for less than the outstanding mortgage? |
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BankruptC
Senior Member
1030 Posts |
Posted - 30 August 2008 : 22:53:19
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Hi harbourmaster and welcome to the forum.
I'm just about to go BR myself so am by no means an expert, but from what I've read and learned from the forum and experts, I don't think the OR would force a sale on a propery which was unlikely to release any equity for your creditors.
I can't advise on your situation as it'sdifferent to ours, but I'll tell you how we're doing it. We've actually moved out of our home and are going to hand back the keys and so when we go BR, we intend to write 'possible shortfall' next to the mortgage and secured loan in our list of creditors, so that the shortfall (there will definitely be one-we're in negative equity), will be captured in the bankruptcy. I'm not sure if you can or should do the same if you're in positive equity, but I'm sure an expert will be along soon enough to advise you properly.
Hang in there and keep asking the questions!
CG. x |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 31 August 2008 : 09:47:04
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Hi and Welcome
We went BR on the 4th and we have equity in our home, we have stayed here and wrote on the SOA "possible shortfall" in both secured and unsecured sections so that it is captured in the BR.
We have been asked if someone wants to buy the BI in the home and we said that their is no one. So now its a waiitng game, as we can just about afford the mortgage at present and if the OR wants the equity then they have 3 years to get the house sold.
We will wait and see what the mortgage goes back up too when our offer ends in May next year and then take it from there with regards to renting etc.
Everyone does it different, we dont have anything secured against the house, also we can afford the mortgage as its not to high about the same as a rental property for us down here.
So its up to you, some go before,some go after.
I know it is a bit harder after BR but not impossible.
I stayed not only because wee could afford it, but i knew that the OR would want their bit and whilst they are sorting that out i would still have my own home.
I dont know if my view has helped a bit.
Anyhow keep posting.
JO
"There is light at the end of the tunnel, if you cant find it get a brighter torch"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/ |
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harbourmaster
Junior Member
346 Posts |
Posted - 31 August 2008 : 11:37:25
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| Thanks for the replies. I am sure we will be asking lots of questions over the next few days. We do not intend to continue paying the mortgage as our company is now closing down and we have new jobs but only earning £1500. The mortgage payments alone are £1650!!! Payment was due friday but didn't pay it. That's the first missed payment. Do we tell the lender straight away or wait until they start proceedings. After all if we can manage to live there for 3 or 4 months we will be able to save a bit. |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 31 August 2008 : 11:38:12
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Keep posting and we will keep answering.
Take care
Jo
"There is light at the end of the tunnel, if you cant find it get a brighter torch"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/ |
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BankruptC
Senior Member
1030 Posts |
Posted - 31 August 2008 : 12:05:33
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Hi again Harbourmaster,
If you tell the mortgage lender now, they will be sure to want you out very quickly. I would certainly advise you to secure somewhere to live before you inform the mortgage lender of your intentions. Do you plan to go into rented?
From what Jo says, it is important you've written 'possible shortfall' on both secured and unsecured sections of your SoA so you're not liable for any potential shortfall on your mortgage.
CG. x |
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rv02
Junior Member
United Kingdom
195 Posts |
Posted - 31 August 2008 : 12:15:17
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| Hi Sorry to jump in on this but can some one tell me where need to write this in SOA. do I need to write the possible shortfallbe when i declare the secured loan and say the word possible shortfall and the same for mortgage. Its just that there is no sections on online forms for notes and additional informaion which iam filling online |
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BankruptC
Senior Member
1030 Posts |
Posted - 31 August 2008 : 12:17:55
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Hi rv02,
I think this has been mentioned before. If I remember correctly the person said they had to write 'possible shortfall' in by hand afterwards because the online forms had no provision for it.
Jo says she did this too, so I'm sure she will tell you how she did it. I haven't done it yet so will be interested to see the answer too!
CG. x |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 31 August 2008 : 13:23:15
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Hi all,
On my form it says something like what the money was for, i wrote in mine "Possible shortfall" then it printed off.
I could not write an amount as obviously i did not know what that would be so i just wrote the outstanding amount for the whole mortgage.
Hope this helps
Jo
"There is light at the end of the tunnel, if you cant find it get a brighter torch"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/ |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 31 August 2008 : 13:25:19
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And No i did not tell my lender, i missed 2 payments so i would have the money for the fees and when we got back from the court i called them and made arrangements to pay the arrears back, which we are now doing over 9 months.
We dont want to move out yet as we can just about keep the house with the payments.
If we have to go we wont really know till end of May next year, then we will see which road is better for us then.
Jo
"There is light at the end of the tunnel, if you cant find it get a brighter torch"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/ |
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harbourmaster
Junior Member
346 Posts |
Posted - 31 August 2008 : 15:41:08
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Hi C.G
Housing isn't a problem, we are very lucky in the fact that a close business friend owns 49 houses and he has told us if he has not got one empty that we like he will buy one for us. Couldnt have done this without him.
Another question now is cars!!!
As we HAD a very sucessful business we had nice cars but always on finance. Do I put these under the secured or unsecured section of the forms? The do notyhave any equity in them. (in fact mine is worth about £10,000 less than is owing!)
If we prove to the finance company that the monthly payments will be kept goiung will they let us keep the car? Not bothered about mine, it can go back and there is an instant £700 per month saving. Only worry is that my sons car is in my wifes name (who is also going BR) He is in the Navy and has not had credit and is too young to get credit so we did it in my wifes name for him. |
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John
New Member
United Kingdom
73 Posts |
Posted - 31 August 2008 : 19:03:22
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Hi
was the business you mention a partnership or a limited company?
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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harbourmaster
Junior Member
346 Posts |
Posted - 31 August 2008 : 19:05:38
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| Hi John. The business is a ltd co. |
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John
New Member
United Kingdom
73 Posts |
Posted - 31 August 2008 : 19:25:33
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Hi
do I take it you have no interest in "phoenixing" the company?
Has it been liquidated already?
www.Bankruptcyhelp.org.uk
0800 078 9367 |
Edited by - John on 31 August 2008 19:25:51 |
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harbourmaster
Junior Member
346 Posts |
Posted - 31 August 2008 : 20:05:28
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Yes thats correct John. It was a mortgage brokers!!!
Did employ 15 brokers and 4 admin staff and had 4 high street shops. Current "credit crunch" hasn't helped at all! What was left of the business has now been transferred to someone else. This happened before our decision to go BR |
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John
New Member
United Kingdom
73 Posts |
Posted - 31 August 2008 : 20:22:00
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Hi H
in that case the OR will contact the finance companies re the cars. The OR will certainly want them to go back as this will release monthly disposable income and increase the possibility, and his return, on any IPA proposed.
Most vehicle finance houses would not let you continue anyway.
You should enter the details of each vehicle in the secured part of section 4 on your SoA.
You should also enter each vehicle again in the unsecured part. In the column asking for the amount owed put "0". In the reason for debt column write "potential shortfall".
This way the shortfall on each is captured in the bankruptcy.
It's a sticky one regarding the car in your wife's name that "belongs" to your son.
Obviously if he were 18 upwards you may be able to get the negative equity vehicle, and the finance, transferred to him.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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We are just about to go into br next week.
