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wendyp
Junior Member
United Kingdom
175 Posts |
 Posted - 17 March 2008 : 19:54:22
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Me and my husband are declaring ourselves bankrupt, we have left our house already and are in the process of handing the keys back to the mortgage company. We filled in the forms for the mortgage company and now they say they cannot accept them because we didn't put our forwarding address on, I said fine, send me some more forms and I will put our new address on. We have had the post re-directed for 12 months so didn't see why they needed to know where we live now. They said it is because if there is a shortfall in the sale of the house they need to contact us about settlement - surely if we are bankrupt the shortfall will be written off (or included in the bankruptcy) and they said no, they will still pursue us for any secured debt - is this true?
There is also a second charge on the property and they will probably receive nothing from the sale, will they still be pursuing us in years to come? I was told that once we were discharged from bankruptcy anything that is left over would be written off whether it is secured debt or not. |
Edited by - wendyp on 17 March 2008 20:04:10 |
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 17 March 2008 : 20:22:57
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Hi Wendy,
Hold fire on the bankruptcy and get an expert to review your specific circumstances.
CARE Bankruptcy only covers unsecured debts.
So In general if there is to be a possession you want that to occur prior to bankruptcy and any shortfall established as an unsecured liability and then included in the bankruptcy. There are specific steps that should be taken and the process managed hence call in an expert
All the best Alan
www.debtdr.co.uk |
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wendyp
Junior Member
United Kingdom
175 Posts |
Posted - 17 March 2008 : 20:31:03
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I know, but it could take months for the house to sell and because we have left the property and are paying rent already we are not paying the mortgage or the other secured loan anymore. I am due to have a baby 15 April, so we need to declare bankruptcy before then, so was going to do this at the beginning of April, once we had given possession back to the mortgage company, I think that the house will sell and will deffo pay mortgage company back and some of the secured debt but it will not be enough to pay all secured debts - hence why we did not sell it ourselves.
Once mortgage company have taken possession and the house is sold, surely the debts that are still outstanding are no longer secured? |
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 17 March 2008 : 20:39:40
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Hi Wendy,
The Key is the date you file for bankruptcy if at that stage there is secured debt then it is not covered.
Hope all goes well with baby and still I would suggest holding off - if other creditors are causing stress then suggest that you seek to get a creditors arrangement in place to buy time - payments could be as low as £1 per month per creditor if there is financial hardship.
Experts will be able to review the situation and advise
All the best Alan
www.debtdr.co.uk |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 17 March 2008 : 20:41:29
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Hi Wendy
and welcome to the forum
Provided that the correct procedure is followed then any debts resulting from the house will be included in the bankruptcy.
This will include all the costs of reposession / hand back, all the costs of sale plus any negative equity for the first and second mortgage lenders,
So you are absolutely correct in beleiving that these debts could be involved in your Br.
Hiwever timing is important so you will deed to do things in the right order to ensure that these debts are included in the Br.
Which area of the country do you live in?
perhaps we can give you advice about the procedure in your local court as these do vary in each court.
Take care
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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wendyp
Junior Member
United Kingdom
175 Posts |
Posted - 17 March 2008 : 21:09:34
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Thanks to Alan and Paul.
We live in Failsworth, Manchester but need to go to Oldham County Court not Manchester. Possession should take place this week (I hope) and then we will go to court 1 or 2 April, at Oldham we don't need a date you can just turn up. Have already done the forms, need to do a few tweaks on the budget and have put on the forms that we have handed the house back to mortgage company.
We wanted to leave the house first and sort out a rented house because of the credit checks etc before BR.
We have been doing a debt management plan with our unsecured debts since August 2007 so at least they are holding back for now, and we are not being chased for now by them.
Any advice or help you can give me would be greatly appreciated.
Thanks |
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AlanO
Junior Member
United Kingdom
259 Posts |
Posted - 17 March 2008 : 21:19:10
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Hi Wendy,
As there is not pressure from unsecured creditors I would defer the bankruptcy petition until everthing is lined up on the property.
The theory of a debtfree start with baby is great but suggest that you logically work through this with an expert - as Paul said in his posting timing is important and things need to be done in the right order.
All the best Alan
www.debtdr.co.uk |
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wendyp
Junior Member
United Kingdom
175 Posts |
Posted - 17 March 2008 : 21:32:51
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Thanks for the advice.
So would you defer BR for another couple of months then or just until the mortgage company have taken possession? The second charge on the property is chasing me constantly, they have phoned 7 times today. I have stopped answering their calls because when I di they still call again the same day and to be honest I don't really think there is much to say to them, I have told them our situation and what we are doing and told them we are going to court in April. They asked for OR's details I said I wouldn't have these until we had been declared bankrupt.
It is going to be difficult to do the BR with a newborn, that is why we wanted to do it before the birth and maybe meet with the OR after the birth or is a telephone meeting possible? |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 17 March 2008 : 21:58:54
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Hi Wendy,
Alan and Paul are correct timing is everything in your situation and try not to feel pressured by the secured loan company, they are conatcting you as they are worried about their debt and rightly so, but don't let them rush you into bankruptcy wait until the mortgage comapny have possession then declare your bankruptcy.
If you debts are strictly credit debts and you have not run a business or been self employed then you will likley be dealt with via a telephone interview.
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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wendyp
Junior Member
United Kingdom
175 Posts |
Posted - 17 March 2008 : 22:14:16
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Thanks to all.
No its all just personal credit debts. I am still paying the DMP for now and have missed 2 mortgage payments so far. I suppose if we wait until the new baby is born we will know our exact income/outgoings also because we will receive more child tax credits and child benefit but my income is going to drop because of being on mat leave.
Will the mortgage company get in touch with the second charge on the property when they take possession? How long does a repossession usually take, the mortgage company told me 7 days but I imagine it will be much longer than this. |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 17 March 2008 : 23:11:07
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It Can vary depending on how busy the baliffs are, but normally seven to ten days.
The first charge mortgage company will have power of sale, so they will make the arrangemnts to have the property sold and their legal team will contact the second charge mortgage company.
Good luck and all the best
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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pix1
Average Member
689 Posts |
Posted - 18 March 2008 : 13:42:02
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| As I understand it if you go bankrupt before, during or after a property repossession any mortgage shortfall debt arising from the sale of the repossessed property would be included in your bankruptcy provided the mortgage company was declared as a secure creditor in the bankruptcy petition statement of affairs. Can anyone advise me if this is correct or not? |
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pix1
Average Member
689 Posts |
Posted - 18 March 2008 : 13:44:23
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| Further to my last post a few moments ago my Official Receiver advised me that was the case when I queried it with him following my Telephone Interview. |
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wendyp
Junior Member
United Kingdom
175 Posts |
Posted - 18 March 2008 : 15:54:17
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Thank you Pix 1.
I understood this to be the case also, I have completed our forms and have put both secured lenders down on the form and stated on the forms that I have handed the property back to the mortgage company for them to sell/repossess.
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 19 March 2008 : 10:02:03
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Hi Wendyp,
This will cover you I would also enter them as an unsecured creditor with a question mark on the amount owed, this will flag up to the examiner that there is likely to be a shorfall to the mortgage company that will form part of your Bankruptcy debts.
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 19 March 2008 : 13:03:13
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Hi Wendyp
As per the thread with Pix1 we now have a definative position to the question you asked,
When you declare Bankruptcy your assetts pass over to the OR/Trustee to be dealt with for the benefit of your creditors, if the property is sold or a third party purchases your benefical interest then the proceeds if there are any would pass to the OR to be split between your creditors, therefore if there is a shortfall this should form part of your bankruptcy debts.
So long as the property is still within the jurisdiction of the OR then this is to be the case, However if the trustee decides that there is no equity in the property he may claim that the property is exempt or offer to sell the beneficial interest to a third party or back to the Bankrupt, at this point the property is no longer an assett within the bankruptcy estate, If the property is reposessed at this point any shortfall will not form part of the bankrupcty.
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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Misleading Info - Bankruptcy
