Bankruptcy seems certain in our partnership business.The house,free of mortgage was pledged to the Bank.BUT the bank charge will be £750K but falling values house worth £450K.Outside the bankruptcy we think that my wife's side of the security charge form is flawed.Would OR leave house outside Bankruptcy order given the negative equity situation OR is it mandatory that the house is sold even it will result in a massive loss.(I always thought that property fully charged and with no equity fell outside a bankruptcy order
I am a little unclear of your post but this is the situation regarding property.
Once bankrupt the Official receiver owns your beneficial interest ( equity ) in the property. If there is equity then to retain the property one must put forward a third party who will effectively purchase the Beneficical Interest from the official receiver.
Where the equity is either zero or negative then the beneficial interest is worth £0 so the official receiver would sell this to a third party for £1 plus legal fes to do so.
In your situation I would be very nervous about taking on a debt secured against the house ( 750k) worth only 450K
really suggest you give one of the experts a call to discuss the situation and see what choices you may have
Paul Johns Assisted Bankruptcy Specialists Reviva UK www.revivauk.com
Your interest in the property vests in the Trustee, but if there is no equity they will take little action to deal with this and as Paul says will likely sell the interest to a third party for a nominal sum. However your main problem is the bank's security who presumably will want to see the property sold to recover some of their losses. If the security is valid, then you may have to face possession proceedings.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com
Would OR leave house outside Bankruptcy order
Posted - 11 May 2008 : 22:16:52
