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mattdjuk
Junior Member
214 Posts |
 Posted - 17 March 2008 : 13:10:22
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Hi all,
I currently am on a DMP with Payplan, I owe in the region of 80K and have been told that an IVA is not currently a valid option. The DMP will take me 17years to pay back! I have spoken to a couple of different people about the possibility of an IVA but the amount I can offer and the fact I have HSBC as a major creditor, rules me out
I was wondering about certain aspects of declaring bankrupt...
My wife and I are joint mortgagees on a flat, what would happen if I were to go bankrupt? I've read some stuff about my wife being able to buy my share of the property from the OR - Some rough figures would be helpful here to know if this is a viable option. The flats worth about 215K and the mortgage is for 193K, the equity was based on a 50/50 split between my wife and I. However we are currently in the first year of a 5 year fixed deal and the early repayment charge is 11K - so realistically we don't have that much equity even if we sold for top price.
Also, what happens with the mortgage? Obviously that was based on our combined income and if my wife had ot remortgage just in her name it would be impossible, and I know you can't obtain credit over £500.
the only assets I have are my share of the property, a 2 bed flat (mortgage payments are interest only and about the same as renting sothing equivalent), I also have a car which is on HP and is worth about what I have to repay over the next 5 years (4-5K).
Obviously this would be a big decision and I want to go into with all the facts. I'd be grateful for any info you can offer.
Thanks
M |
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 17 March 2008 : 13:35:38
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HI Matt,
A Full review would be required - however the general principle is that your partner family member or friend could acquire the beneficial interest ( equity that transfers to the OR) In certain instances the benficial interest can be acquired for as little as £1, plus associated legal costs.
The valuation of the property is agreed ( with the support of valuations) with the OR and compared with the redemption figure for the mortgage and any other secured loans on the property.
With regard to the car provided the monthly payment is reasonable and the HP provider is happy to continue then this would not usually be an issue.
However always best to talk direct with an expert to review your specific circumstances and to see what is best for you and your wife
All the best Alan
www.debtdr.co.uk |
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mattdjuk
Junior Member
214 Posts |
Posted - 17 March 2008 : 14:07:25
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Thanks for your response.
Can anyone recommend someone I can contact for more detailed advice?
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 17 March 2008 : 14:15:51
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Hi Matt
There are resident experts on the forum or you could view www.debtdr.co.uk for our contact details and Head Office will arrange for either me or one of our local consultants to contact you
All the best Alan
www.debtdr.co.uk |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 17 March 2008 : 14:45:04
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Hi Mattdjuk
As Alan says there are many options both in terms of the property and the debt solution.
Because you have a property you really need to review your case with a specialist who can look at the whole picture for you and discuss all the options and then advise what would happen to the flat, the car and potentially the income payment agreement that you may get depending upon the level of disposable income.
Advice is always free impartial and without obligation.
which part of the country are you in.
Take care
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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mattdjuk
Junior Member
214 Posts |
Posted - 17 March 2008 : 14:54:31
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The key thing here for me is not costing my wife and baby their home. I know that she can by the BI in the property, is this guaranteed - what I mean is the OR can't turn round after I have gone through the process and tell me that they won't let someone buy my share of the flat?
Is it possible, and legal, for me to sell the BI before going bankrupt? I realise it would be for the market rate, but would it be frowned upon or totally illegal to do this?
M |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 17 March 2008 : 15:16:17
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Hi Mattdjk,
This would not be a problem as long as the correct valuations are done and the transfer or purchase of the BI is fully documented giving full disclosure to the OR, any monies realized in this transfer eould need to be supplied to the OR.
May I suggest that you do take independent advice rather than do it yourself as I have seen many people come unstuck trying to handle a complex transaction such as this.
Both Paul and Alan are very skilled in these areas so contact either through thier relevent websites.
I hope this helps
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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mattdjuk
Junior Member
214 Posts |
Posted - 17 March 2008 : 15:54:18
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| Say for arguments sake I get a valuation done at 210K and our mortgage is 193K - that leaves 17K. Would the OR just halve that and that would be the cost of my share or would they take off the sale costs, such as early redemption penalty on mortgage, EA fees, solicitors fees and then work it on whats left? |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 17 March 2008 : 16:03:23
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Hi Mattdjuk,
They would take the value of the property less the mortgage less any early repayment penalty, that you have said is £11k.
They would then calculate cost of sale i.e. estate agents and legal fees this being around 2% as a guide, then they would split the equity 50:50
so as follows:-
£210,000 value
£193,000 mortgage
£11,000 early repayment penalty
£4200 costs of sale.
=£1800/2= £900
They would then require, whoever were buying the BI to pay legal costs of around £250 for the transfer so your wife if she were to buy your interest would have to pay the OR £1150
Hope this helps
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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mattdjuk
Junior Member
214 Posts |
Posted - 17 March 2008 : 16:06:20
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thanks,
I'm confused now - I have been reading another forum where someone who has goen through the process said that the OR categorically refused to remove early redemption penalties and sale costs. Is the way you describe it a rule or is it luck of the draw so to speak? |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 17 March 2008 : 16:18:00
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They must take into account the secured creditors first and foremost, however the OR can take up to three years to deal with the equity in the property so if the early repayment penalties were to come to an end within the three year period then I could see why they would not consider these, whereas yours are for five years so well outside the three years rule.
As for costs of sale this is a negotiation and is dependant on area, but if they were to have to sell the property these are costs that they would have to consider so they should also consider them upon negotiation.
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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Edited by - Helpful Advice on 28 April 2008 13:48:21 |
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mattdjuk
Junior Member
214 Posts |
Posted - 18 March 2008 : 07:52:51
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I spoke with Paul last night and I'm feeling a lot more comfortable about things. Thanks again for the advice.
Some more questions...
Say I took out a secured loan, for 10K, used it to pay some of the more difficult creditors and then went bankrupt. Obviously the level of equity available would be next to nothing, could I then sell it prior to bankruptcy for a nominal fee? I'm looking at alternatives if I can't get family to raise the market rate for my share. |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 18 March 2008 : 12:07:10
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As Long as you use the £10,000 to improve your unsecured creditors position, then this would be ok.
If you took out the secured loan and did not spend this on paying creditors this would be seen as bad conduct prior to Bankrupcty and result in a bankrupcty restriction order.
If you go down the secured loan route then the payments to this lender would be a viable expence in Bankrupcty therefore limit the possibilty of your getting a Income Payment Agreement or Order.
If there is little or no equity in your property by going down this road I would then do the transaction of selling the BI through the OR and not before.
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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zoe
Junior Member
329 Posts |
Posted - 28 April 2008 : 13:25:44
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Hi Helpful advice
i am the person that mattdjuk refers to in that the OR has refused to take my ERedemption into account. (it has another 3 and half years to run and i have been bankrupt for nearly a year) can you tell me if you have had any experience of OR's actually taking this into account for use in my argument with them????
thanks a million
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 28 April 2008 : 13:52:02
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Hi zoe,
Are you negotiating to buy back the beneficail interest yourself?
If so I know what the problem is.
In each of the transactions we deal with the BI (Beneficail Interest) is sold to a third party.
In most cases this is the spouce, however this can be a family member or friend.
When negotiating the sale of the BI to a third party they will normally take into account the costs of sale and early penalty charges, however if you are negotiating to purchase this back yourself they do not make these allowances.
You may need to nominate a third party to purchase your BI.
I hope this helps
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my personal story & blogs at:
http://brettengland.blogs.bankruptcyhelp.org.uk/ |
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zoe
Junior Member
329 Posts |
Posted - 28 April 2008 : 20:37:26
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Hi there
No my parents are buying the BI for me.
Thanks
Z |
Edited by - zoe on 30 April 2008 07:54:02 |
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IVA unsuitable, Bankruptcy Questions...
