URGENT! Please help with bankruptcy advice

[thats pooh]

Hello all,

This is my first post and I dont know where to turn! The problem is not with myself, but with my wife's parents. They are horrendously in debt and will be losing their house very soon if something isnt done.

They have:

£58k loan with GE money that is secured on the house
£18k loan with Welcome Finiance secured on the house
£26k mortgage

And various other personal loans that put the total to about £110k.

The value of their house is only about £85k.

The problem has arisen from the mum in law becoming ill, not being able to work and her PPI now not paying out despite months of arguing. We will be starting the ball rolling with a claim for a mis-sold PPI thanks to info from this site. However it means that legal proceeding are being undertaken as we speak.

However, they really do not want to lose their hosue, and the option that I am looking at is for us to buy their house, and for them to then decalre themselves bankrupt.

However, the question that I cannot find an answer to is what price the house has to be sold for?

Can the house be sold to us for a reasonable ammount, say £70k which pays of most of the debts, and then them declaring themselves bankrupt to clear the rest?

Or would the house have to be sold at the market value?

What would happen if it was sold to us cheaper - would the bankruptcy trustees come after us for the difference?

I have trawled the internet and can only find info on buying the house from the trustees but nothing about them selling the house prior to becomming bankrupt. I have read some info on the bankruptcy act, and do not want to commit any criminal offences by doing this, but we just cannot borrow more than about £70k and just want to help.

I know this a lot of dept to get into, however the majority of it is down to illness, and stupid PPI's which have incurred massive interest and late payment charges.

ANY help or advice would be greatly appreciated.

Many thanks.

[payingonlyencouragesthem]

"Can the house be sold to us for a reasonable ammount, say £70k which pays of most of the debts, and then them declaring themselves bankrupt to clear the rest? "

Can help you on that bit. If they did this the transaction would be set aside as fraudulent. The house would have to be properly valued by a surveyor, probably appointed by the lenders themselves. I think the best thing you can do is sit down with the lenders and explain the situation.

[thats pooh]

Thanks for the reply. We're going to get the house valued by an estate agent just to give us a brief idea of what the value would be. I think I've found soemthing like you said called a 'transaction at an undervalue.' The thing is, no one sells their house at the asking price, and I believe that trustees would sell it at auction and get less than the market value anyway? I was just wondering whether there is a level that is 'acceptable' that would not class it as a transaction at an undervalue? Trouble is, we cant borrow more than £68k and have about £3k in savings. Its not that we dont want to pay more for it, its that we cant.

[payingonlyencouragesthem]

The lenders will bend over backwards to stop them going bankrupt I can assure you. You are right the trustees will sell it at auction and get a rock bottom price that's why the lenders will want to help you sell it on the market. Unfortunately I think your only real hope of keeping them in the house is getting a buy to let landlord to buy it. You really must talk to the creditors and see what kind of deal you can hammer out with them.

[hellhasnofury]

Originally Posted by thats pooh

Hello all,

This is my first post and I dont know where to turn! The problem is not with myself, but with my wife's parents. They are horrendously in debt and will be losing their house very soon if something isnt done.

They have:

£58k loan with GE money that is secured on the house
£18k loan with Welcome Finiance secured on the house
£26k mortgage

And various other personal loans that put the total to about £110k.

The value of their house is only about £85k.

The problem has arisen from the mum in law becoming ill, not being able to work and her PPI now not paying out despite months of arguing. We will be starting the ball rolling with a claim for a mis-sold PPI thanks to info from this site. However it means that legal proceeding are being undertaken as we speak.

However, they really do not want to lose their hosue, and the option that I am looking at is for us to buy their house, and for them to then decalre themselves bankrupt.

However, the question that I cannot find an answer to is what price the house has to be sold for?

Can the house be sold to us for a reasonable ammount, say £70k which pays of most of the debts, and then them declaring themselves bankrupt to clear the rest?

Or would the house have to be sold at the market value?

What would happen if it was sold to us cheaper - would the bankruptcy trustees come after us for the difference?

I have trawled the internet and can only find info on buying the house from the trustees but nothing about them selling the house prior to becomming bankrupt. I have read some info on the bankruptcy act, and do not want to commit any criminal offences by doing this, but we just cannot borrow more than about £70k and just want to help.

I know this a lot of dept to get into, however the majority of it is down to illness, and stupid PPI's which have incurred massive interest and late payment charges.

ANY help or advice would be greatly appreciated.

Many thanks.

Hello,

Just a quick question because I am not a expert, but have my own opinions. You have stated "I know this a lot of dept to get into, however the majority of it is down to illness, and stupid PPI's which have incurred massive interest and late payment charges."

If you where to reclaim back the ? mis-sold ppi's and late payment charges with the interest, would that not put these accounts held by these debtors in dispute. Would it not be interesting to send a CCA request to see who holds or if the have the original credit agreement.

It may buy you some time to try to sort things out.
Just a thought,

[InKogneeToh]

Hi

Have just come across this thread and agree with HHNF that a CCA request for the copy of agreement and special statement of account under CCA s77/78 would put the debts in dispute and at the very least buy some time (they have 12 working days to comply, failing which they cannot enforce the agreements until they do!).

Also do FULL S.A.R - (Subject Access Request)'s to GE and Welcome Finance requesting all data, from all relevant filing systems. They have 40 days to respond to this and will not be able to enforce the agreements whilst the debts are in dispute. A full S.A.R - (Subject Access Request) will produce more than just statements and 'may' reveal other useful info.

Then go for a claim for any charges and for the PPI.

Regards, Pam

[sequenci]

hey.

as there is negative equity it is unlikely that the Official Reciever will do anything with the property. You will be able to buy their beneficial interest under the low cost transfer scheme.

take a look at this:

http://www.insolvency.gov.uk/pdfs/gu...tspdf/home.pdf

[thats pooh]

Thanks for the advice so far.

Pam, sorry to sound like I dont know a thing, but please could you tell me what a CCA request is and what does it do?

Also what are full S.A.R - (Subject Access Request)'s?

We have just found out that GE Money have already taken them to court and obtained a repossession order.

Does anyone know who decides on what the market value of the house is? Would it just be an estate agents valuation, or would we have to pay for a surveyer etc?

We are going to the CAB hopefully on Monday. This is a nightmare.

[InKogneeToh]

Hi, and welcome to CAG by the way!

Sorry but I have to go out for a while now but will answer your questions later, unless of course someone else does in the meantime.

Regards, Pam

[suecrill]

Hi and welcome to CAG. You will find lots of help and support here-I have. I havent the knowledge to help you very much but I am sure someone will be along later who can help.

A CCA letter is what you send to whoever holds a debt more or less asking them to prove to you that they are entitled to collect this debt. You have to send them £1 fee for this. There are letter templates on the site for you to copy, inputting your details and when you send the letter make sure that you send it special delivery so there is proof they have received it. This will put the debt in dispute.

A S.A.R - (Subject Access Request) letter (also on a template) cost you £10.00. It is a request to the loan company/bank etc to supply all transactions and data held on your file.

If you spend some time looking around the website and reading the FACs you will bgin to understand the processes to put you or your parents back in control and it will also give you the strength and confidence to take on these big companies.

If I can be of any help please PM me even if its for moral support

Take care
Sue

[sequenci]

Originally Posted by thats pooh

We have just found out that GE Money have already taken them to court and obtained a repossession order.

Does anyone know who decides on what the market value of the house is? Would it just be an estate agents valuation, or would we have to pay for a surveyer etc?

We are going to the CAB hopefully on Monday. This is a nightmare.

give national debtline a ring on 0808 808 4000 too, the advice given by a CAB can vary depending if they have a money adviser or not.

can they meet the mortgage payments? if so it is likely they could get a suspended posession order from the judge. take a read of this factsheet:

http://www.bdl.org.uk/images/bdl01_e...ageArrears.pdf

[hellhasnofury]

Originally Posted by suecrill

Hi and welcome to CAG. You will find lots of help and support here-I have. I havent the knowledge to help you very much but I am sure someone will be along later who can help.

A CCA letter is what you send to whoever holds a debt more or less asking them to prove to you that they are entitled to collect this debt. You have to send them £1 fee for this. There are letter templates on the site for you to copy, inputting your details and when you send the letter make sure that you send it special delivery so there is proof they have received it. This will put the debt in dispute.

A S.A.R - (Subject Access Request) letter (also on a template) cost you £10.00. It is a request to the loan company/bank etc to supply all transactions and data held on your file.

If you spend some time looking around the website and reading the FACs you will bgin to understand the processes to put you or your parents back in control and it will also give you the strength and confidence to take on these big companies.

If I can be of any help please PM me even if its for moral support

Take care
Sue

Hello again

have a look at this link. You need letter N to send to the creditors with you £1

http://www.consumeractiongroup.c o....templates.html

[InKogneeToh]

Originally Posted by thats pooh

Thanks for the advice so far.

Pam, sorry to sound like I dont know a thing, but please could you tell me what a CCA request is and what does it do?

Also what are full S.A.R - (Subject Access Request)'s?

We have just found out that GE Money have already taken them to court and obtained a repossession order.

Does anyone know who decides on what the market value of the house is? Would it just be an estate agents valuation, or would we have to pay for a surveyer etc?

We are going to the CAB hopefully on Monday. This is a nightmare.

Hi

Right - in brief (well on second thoughts I don't do brief ):

1) When you enter into an agreement for a loan, credit card, large store purchase etc., the chances are that the agreement is regulated under the Consumer Credit Act. This was specifically enacted to protect the consumer and governs every aspect of the agreement.

The tragedy is that most people don't know what their rights are and so often allow creditors/debt collection agencies etc. to bully, intimidate, and lie to them and get CCJs /charging orders/repossession orders by often relying on the borrower's ignorance of the law.

Under the CCA the borrower is entitled at any time to request from the lender a copy of the actual agreement that he signed and a special statement of the account. This request costs £1 and the lender is obliged to comply within 12 working days of receiving the request, otherwise he is not entitled to enforce the agreement until he does comply.

It is very often the case that a lender cannot produce the copy agreement (lost/destroyed etc.) or that the document turns out to have been improperly executed, i.e. does not contain all of the terms and/or statements of statutory rights, and/or was not signed properly.

Depending on the specific errors/omissions, the agreement may not be enforceable except by an order of the court, or totally unenforceable.

The reason for doing the CCA request in your case is to make sure that there is a properly executed agreement in place and that therefore the lenders had the right to seek CCJ/charging order/repossession order in the first place!

It is not easy to reverse the situation if errors etc. come to light but it is possible.

2) The S.A.R - (Subject Access Request) (Subject Access Request) is the right of any individual to be given details of any or all data that any institution holds on them. In a full SAR you would typically receive copies of all documents, transcripts of all data held on a computer, manual accounts/notes and even transcripts of telephone calls.

In your case, you may get evidence of unlawful charges on the accounts (which may be reclaimed) or evidence of any other irregularities/discrepancies etc. that may or may not be open to challenge. So all in all, well worth the £10 fee charged for this. The lender has to comply with a S.A.R - (Subject Access Request) within 40 days.

Regards, Pam

[The Phantom]

Originally Posted by sequenci

hey.

as there is negative equity it is unlikely that the Official Reciever will do anything with the property. You will be able to buy their beneficial interest under the low cost transfer scheme.

take a look at this:

http://www.insolvency.gov.uk/pdfs/gu...tspdf/home.pdf

That is very true. The OR is only interested if there is equity in the property
My OH went bankrupt and we got to keep the house as there was no equity in it. The trustee offered me to purchase his interest in the property for £1.- plus legal costs as the house is no use to him
They will force a sale only if it releases equity to pay off some of the debts.