Ok. We owe £290,000 to Northern Rock which we are able to pay. The second charge is £100,000 to Barclaycard which we can't pay. House is worth £250,000. Potential shortfall included in our bankruptcy. Will the 2nd charge lender repossess us even though they won't get any money and will have to pay the court costs. Thanks
Itis completely up to the charge holder on whether or not they take proceedings, or they rely upon the first charge holder to do so or indeed whether you voluntarily surrender the house back to them. If you have actually gone bankrupt and included the shortfall and the OR will write to the mortgagee. If you fall into arrears due to non payment of the second charge it will instigate repossession proceedings. My advice would be to sort out alternative accommodation and voluntarily surrender back the property, it is far better to be in charge of when and where this is going to happen than to continue paying the first charge only to get to 3 months arrears on the second charge and end up losing the property anyway.
Apologies if this was not what you wanted to hear, but secured charges will always rely upon their security if payments are not made irrespective if the first charge holder is up to date with payments, your second charge holder will only be concerned with their debt/charge
Melanie Nicholas 28 years insolvency experience - 23 of which in the Insolvency Service - Insolvency Manager Jones Giles
repossession
Posted - 23 February 2009 : 12:40:47
