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malcolmdl
Starting Member
6 Posts |
 Posted - 08 June 2009 : 22:49:51
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I was advised to declare bankruptcy last August but decided to fight on in the hope I could get through it.
However, it is now obvious to me that this is the route I need to take. I Have approx £80,000 in credit card debts and loans (unsecured), mostly used to support my business which went under last year.
I have arrangements with a number of lenders, but the debt is too big, I have been ill for most of the last six months, and need to get my life back together.
My wife only has a part time teaching job and I was supposed to be training to be a driving instructor but have been too ill to do it.
My questions are:
1) I understand that all my assets will be taken over by the OR. My wife and I have a joint mortgage on our house, but there is little or no equity in it now that house prices have fallen and I assume that the OR would have no interest in selling it? Can you explain please how the system of someone else (eg my wife) buying back the nominal interest in the property for £1(?) works? Is it a case of, as long as she (we) can afford the mortgage repayments, we would keep our house? What would happen to any capital growth in future years?
2) I also personally own 4 'buy to let' properties, all with mortgages, and all with little or no equity at the present time. I manage them myself and currently they provide me with some income after expenses. What would the situation be with these please?
3) I am currently chair of governors at my children's school and would like to continue in this role. Would this possible under bankruptcy?
4) I am a trustee (and Treasurer!) of a small charity. Would I be able to continue in this role?
5) I am behind with my tax returns and have not filed return for 2007/08, mainly because I sold a property in that year and would have a capital gains liability that I cannot pay. Would HM Customs & Revenue simply become another creditor, or would the situation be considered differently?
Thank you. |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 09 June 2009 : 07:40:11
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Hi Malcolmdl and welcome to the forum
You have a lot going on so need to carefully plan what top do and when to ensure that you have a smooth passage through insolvency and the responsibility to the tennants is upheld to your best level.
The beneficial interest youhave in the house will al=utomatically pass to the Official Receiver as your trustee in bankruptcy. This is for the benefit of the creditors. However a thord party ( your wife ) is able to purchase this from the Official Receiver for market value.
i.e. if the total equity was £2000 then if it is a joint mortgage your share would be £1000 etc etc.
If there is no equity then the Official Receiver will still need to sell it but for a nominal fee of £1 plus legals of £211.
Regarding the chair of Governors and the trustee you are unable to continue these positions while Br but can start again after you are discharged. This is a requirement of Br so is quite serious if you carry on .
The buy to let properties ( I assume they are in your sole name ) will be lost to the estate. Either they have equity in so the OR will require these to be realised or the OR will retain the income to cover these fees.
HMRC would become a creditor but you need to complete the tax return so that a true representation of the figure can be allocated.
You will also need to carefully account for what the money was used for and when so a well presented timeline is critical.
Br is definately not the worst thing and if you go into it with your eyes wide open and get your ducks in a row first before presenting then it is much much better.
list your priorities, get a plan, work out a timeline
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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malcolmdl
Starting Member
6 Posts |
Posted - 09 June 2009 : 13:26:23
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Thanks for your reply Paul. Very helpful.
Once the buy to let properties become part of the estate who is responsible for continuing to pay the mortgages? Does the OR take over all aspects including the management of the properties?
Also, I had understood that I could continue as a chair of governors unless I was placed under a restriction order. Or is the bankruptcy itself a 'restriction order'? My local education authority told me I would be able to continue in this role if I had entered into bankruptcy voluntarily rather than a creditor filing for it! I assume they are wrong.
Malcolm
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 09 June 2009 : 21:54:55
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Hi
technically the OR can collect the rent and not pay the mortgages, and wait until they are reposessed. Any shortfall going into the Br estate.
I would disagree with the LEA on this point.
If you are desperate to continue I would suggest you speak to the OR afterwards and have some supporting documentation from the LEA.
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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malcolmdl
Starting Member
6 Posts |
Posted - 09 June 2009 : 22:07:08
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[quote]Originally posted by Reviva UK
Hi
"technically the OR can collect the rent and not pay the mortgages, and wait until they are reposessed. Any shortfall going into the Br estate".
Interesting! The bankruptcy specialist I spoke to last August suggested that I could collect the rent and not pay the mortgage until they are repossessed!!!
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 09 June 2009 : 22:47:41
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that is correct.
it is usual for someone who is going to pursue Br - and likely to hand back their residential home - to not pay the mortgage in order to save sufficient funds for a rental deposit which would be typically 3 - 6 months rent in advance.
this case is slightly different where you would need to be able to demonstrate where the funds had gone.
worst idea is to use these funds to treat family / friends preferentially as the OR will track it down and want the money back.
you would however be able to use some of this money for court fees, reviewing your car position, other essential costs ( i.e. if the cooker at home didn't work etc etc ). sometimes people use available funds to hire an expert to work on their behalf.
ideally you could cover all of your costs, sort the tennants out, hand the houses back, confirm the position with the LEA and probably have some money to pass to the Official Receiver.
They like that a lot!!
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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malcolmdl
Starting Member
6 Posts |
Posted - 10 June 2009 : 09:11:23
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So, are you saying that this approach is negotiable with the OR after I have declared bankruptcy? Also, what do you mean by 'hand the houses back'? To who?
Sorry for all the questions!
malcolm
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RHB
Senior Member
1159 Posts |
Posted - 10 June 2009 : 13:18:37
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| To the mortgage companies presumably. |
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Topic |
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I was advised to declare bankruptcy last August
