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jb6
Starting Member
25 Posts |
 Posted - 20 October 2009 : 15:13:45
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Can you please help and advised me if possible. What will the Official Receiver consider as an "excessive mortgage payments". Filing for bankruptcy on the 10th November. Wife is worried we will be made homeless. I earn £2560 net of tax plus tax credit etc brings it up to £2740. As my what has lost 80% of her self employed income she has £140 left after her finance commitment that she bring in to the household.
Total Income £2880
Mortgage which is in my name only is £1020 per month and we have a Joint secured loan of £160 per month. Totalling secure payments of £1180 - which is about 39% of our Household Income. Would this be considered as "excessive mortgage payments". and would the Official Receiver likely force a sale even though there is £30,000 negative equity in the property. to relise more money for the creditors and a IPA. The reason I ask is I do not know where we would get the large bond & rent we have been told we need for a private rental as a undercharged bankruptcy. Have been told we will need between £7000-£10,000 for a private rental and removal. Is this anything some one has come across, please can you advise.
Thank you
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 20 October 2009 : 15:37:42
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If the house is in negative equity then the OR wouldn't sell the property as they wouldn't get any money from the sale to pay to creditors.
A mortgage of £1020 isn't that high depending upon the area you live in. I lived in SE England and some people I worked with last yr were paying £1200 per month due to the high prices a couple of years ago. They were unlucky to buy the houses when the prices were pretty much at their peak. |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 20 October 2009 : 17:10:02
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Hi Jb6,
No 2 cases are the same, but our mortgage is £1425pm and £700pm for a second charge.This equates to about 43% of our joint income.
We are in negative equity by 44k, and have been advised that the OR would not take an interest in the property as there is no equity to realise. I suppose the proof will be in the pudding, and no doubt if we do go BR (still considering options) we will eventually find out.
Good luck and keep us informed of the outcome.
quote:
Originally posted by jb6
Can you please help and advised me if possible. What will the Official Receiver consider as an "excessive mortgage payments". Filing for bankruptcy on the 10th November. Wife is worried we will be made homeless. I earn £2560 net of tax plus tax credit etc brings it up to £2740. As my what has lost 80% of her self employed income she has £140 left after her finance commitment that she bring in to the household.
Total Income £2880
Mortgage which is in my name only is £1020 per month and we have a Joint secured loan of £160 per month. Totalling secure payments of £1180 - which is about 39% of our Household Income. Would this be considered as "excessive mortgage payments". and would the Official Receiver likely force a sale even though there is £30,000 negative equity in the property. to relise more money for the creditors and a IPA. The reason I ask is I do not know where we would get the large bond & rent we have been told we need for a private rental as a undercharged bankruptcy. Have been told we will need between £7000-£10,000 for a private rental and removal. Is this anything some one has come across, please can you advise.
Thank you
Treat EVERY Penny as a prisoner. |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 21 October 2009 : 13:27:23
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Just wondered if any forum experts can answer the question asked by Jb?
quote:
Originally posted by In 2 Deep
Hi Jb6,
No 2 cases are the same, but our mortgage is £1425pm and £700pm for a second charge.This equates to about 43% of our joint income.
We are in negative equity by 44k, and have been advised that the OR would not take an interest in the property as there is no equity to realise. I suppose the proof will be in the pudding, and no doubt if we do go BR (still considering options) we will eventually find out.
Good luck and keep us informed of the outcome.
quote:
Originally posted by jb6
Can you please help and advised me if possible. What will the Official Receiver consider as an "excessive mortgage payments". Filing for bankruptcy on the 10th November. Wife is worried we will be made homeless. I earn £2560 net of tax plus tax credit etc brings it up to £2740. As my what has lost 80% of her self employed income she has £140 left after her finance commitment that she bring in to the household.
Total Income £2880
Mortgage which is in my name only is £1020 per month and we have a Joint secured loan of £160 per month. Totalling secure payments of £1180 - which is about 39% of our Household Income. Would this be considered as "excessive mortgage payments". and would the Official Receiver likely force a sale even though there is £30,000 negative equity in the property. to relise more money for the creditors and a IPA. The reason I ask is I do not know where we would get the large bond & rent we have been told we need for a private rental as a undercharged bankruptcy. Have been told we will need between £7000-£10,000 for a private rental and removal. Is this anything some one has come across, please can you advise.
Thank you
Treat EVERY Penny as a prisoner.
Treat EVERY Penny as a prisoner. |
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jb6
Starting Member
25 Posts |
Posted - 21 October 2009 : 13:40:58
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I know its a though one but would apreciate an experts viewpiont
Thanks JB
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Melanie.n
forum expert
United Kingdom
1282 Posts |
Posted - 22 October 2009 : 09:38:10
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Here goes, I will try to clarify - but please remember that each OR's office operates independantly in its interpretations of the Insolvency Act!!! wrong but true
Around 40% of income being used for accomodation costs is the basic rule - but then you have to figure out location, house size, type, number in household etc.
It would be acceptable to have higher % costs in the South East of the country, down purely to the higher housing costs in the area. The OR will look at 'AFFORDABILITY' - I recently had a client with high mortage & sec loan costs and large negative equity, and recently seperated with 2 children and no DI. At her OR meeting last week she was advised to hand back the property (shortfall to come into bankruptcy)as she could rent in the area, for her and the children at a far lower cost per month than maintaing the mortgage and secured loan payments,and as such free up DI and make some kind of IPO payment. This came as a shock to the client who had read many posts on here, and presumed that as she was in a neagtive equity situation she would automatically be able to buy the BI - This is NEVER guaranteed!!! The OR will always look at the whole picture and best solution for the client to get debt free but also to try to make a return via IPO to creditors.
There are no hard and fast rules, and no golden trigger figures!!! there is general practise, but always be aware that your individual situation will be looked at, and what was an acceptable arrangement ie buy BI for one person may not mean you will automatically do the same. It is quite common in a negative equity situation and high housing costs to be expected to give up property and rent.
We on here can only provide the general guidelines, your OR will see the whole picture and make a decfision accordingly. You will however, always have the right to question any decision they make, but it is their role to establish how you got into the financial position and how best to move forward - if housing costs are excessive or indeed you are single and in a 3 bed and could rent cheaper, be prepared you may be asked to do so! negative equity scenario's DO NOT guarantee you keeping your home
Sorry if this post comes as a shock to some going through the process right now, but it is important that you are aware of the risks
Melanie Nicholas
28 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
email me at melanienicholas@jonesgiles.co.uk
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 24 October 2009 : 16:08:05
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Hi Mel
Ur last comment has made me go EEK although totally understand what you are saying.
since going into financial meltdown i have taken in lodgers to my address, they pay a nominal fee but fair market price
their income and my part time income means that the mortgage is 30% of total income. I do not propose to hide any of my income
Are you aware of any OR guidance for subletting your property
thank you Richard |
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Can you please help and advise me if possible.
