Hello, having been in a similar but not identical situation I wanted to put a thought to the forum for some input

I am a joint property owner with a bankrupt and although the property is in negative equity by approx 30K and therefore not affected by a sale the scenario has bothered me from the beginning.

I was amazed to learn that your property can still be sold even if you are not bankrupt, i.e. only a non bankrupt co-owner, i.e. your property can be sold to pay off someone elses debts and all you get is a letter from a trustee telling you resistance is futile and if sold you get the cash for your 50% of the beneficial interest

Now my thoughts on this I would like to put to the forum

Would such a forced sale of your property not contravene your Human Rights , the basic human right of safeguard of your property and a safe home ? (Only looking at this issue from the point of view of non bankrupt joint owners, keeping in mind this can nowadays be some friends who bought a property together, not even spouses / husband & wife)

Would a forced sale not be in conflict with their human rights as they may not agree to this sale and would loose not only their property but also their home and place to live through no fault of their own ?

This seems a very subjective area of the law Phantom. Perhaps the following link will help a little Technical Manual Chapter 33: Miscellaneous points

True, but isn't that what the Human Rights are ? Very subjective indeed.

To ensure your very basic rights ?

I remember a lender / bank managed to overturn a famous judgement in relation to an unenforceable credit agreement arguing the point that this section of the CCA was basically going against their Human Rights (safeguard of property or something like this)

Wasn't this the trigger to change the CCa section 127 eventually ?

I was merely wondering from say the point of view of a few friends who bought a property together, why should all of them loose their home if only one is bankrupt ? Would this not be against their basic human right of safeguard of property as well ? I am not looking at it from the point of view of the bankrupt but from the non bankrupt co-owners only.

I suppose nobody will know until someone tests this by fighting it in court arguing it on this basis, but it is intriguing nevertheless

A question for members with knowledge about bankruptcy

My OH declared bankrupt in October 2006, I am the joint owner of the house (I am not bankrupt)

My OH share of the property is held in trust.

The property is in neg equity by about 30K.

The trustee has offered me to purchase OH's interest in the property for £1.- plus legal cost of £215.-

I accepted

That was back in October 2006 (end of)

I have never heard anything since and a follow up letter sent by myself to the trustee also was also unanswered (sent recorded delivery so was received)

The Official Receiver (which is someone different to the trustee) has written to my OH telling him he is being considered for early discharge and would be hearing from them soon

Now what about the property ? When would the sale of the interest go through ?

As the trustee first offered it and is now ignoring me, should I seek legal advice on this ?

I don't want him sitting n the property and after one or two more years asking for a fee or something in addition to the £216.- for holding the property in trust ? I know he can hold it for another two years after discharge of bankruptcy (for three years in total) so not sure what he is playing at

Is the early discharge due to The Enterprise Act 2002?

If it is some points to note are below.

The Enterprise Act 2002

For secured lenders, it seems unlikely that the introduction of the Enterprise Act 2002 will have any significant effect. There are, however, 2 points that we would highlight.

1. Reduction of bankruptcy period - At present, once declared bankrupt, the period of bankruptcy generally lasts for 3 years. The Enterprise Act is reducing the period of bankruptcy. In most cases the bankrupt will be automatically discharged after 12 months. In many cases the discharge may come even earlier because the Act provides that if the Official Receiver files a notice with the court indicating that the investigation of the bankrupt’s affairs is unnecessary or concluded, the bankruptcy will come to an end once that notice has been filed. The aim is to encourage enterprise and to lose the stigma which currently attaches to being a bankrupt. The 3 months before the introduction of the Enterprise Act, saw an increase in the level of bankruptcies. Will this change continue the upward trend?
    
   Lenders should review their mortgage application forms to ascertain what questions are currently asked. Whereas a person who was generally undischarged 2 years after the date of bankruptcy will most likely, under the new regime, no longer be bankrupt. How much information will be required at the underwriting stage?
   
2. Interest can revert back to bankrupt - Bankrupts are commonly under the impression that on being discharged, their property belongs to them again. This is not the case. Unless the trustee transfers the interest back to the discharged bankrupt, the interest remains with the trustee. This has caused much consternation because with the recent increase in house values, bankrupts who were long ago discharged are now coming to sell their properties only to find that the trustee has retained a claim on their share of the property.
    
   The Enterprise Act will bring an end to this. Unless the trustee in bankruptcy takes steps to realise their interest within a period of 3 years from the date of the bankruptcy, the interest will revert back to the bankrupt. This may result in trustees in bankruptcy becoming more proactive in realising their share of the asset. If they are unable to reach an agreement with the bankrupt for the sale back of the interest in the property, the trustee may seek an order for the sale of the property. This may begin to impact upon lenders with trustees going into possession of properties perhaps resulting in the borrowers ceasing mortgage payments.
    
   Lenders will need to consider whether possession should be sought from the trustee or whether it can be agreed with the trustee that they will effect the sale of the property. In reality, it is only likely to be in those cases where there is significant equity that the trustee will be taking possession because the lender will always have first right to the sale proceeds.

As the trustee first offered it and is now ignoring me, should I seek legal advice on this ?

 

Personally I would. Don't know if CCCS can help, but may be worth a try.

It must be due to the Enterprise Act, as their letter to my OH said their investigation is complete and they would now be writing to the affected creditors informing them about the intended early discharge

He would automatically be discharged beginning of October this year anyway and the trustee could hold my OH's beneficial interest in the property until beginning of October 2009 until it would automatically revert back to my OH

As the property is substantially in negative equity and the trustee has only an interest in 50% ( I own the other half as a non bankrupt and would be entitled to 50% as well) it is unlikely any sale would be ordered now or in the future, there is no way the house would be out of negative equity by then never mind any potential profit by 2009.

So I was wondering what he is playing at by witholding the sale now and just ignoring all contact attempts regarding this issue. The last contact he made was end of October 2006 with his offer.

I am in two minds whether to pursue this more aggressively now or to just let it be and wait until 2009 when it reverts back automatically to my OH

Just worried there will be a £20000 bill or something for holding it in trust for so long:confused:

Just worried there will be a £20000 bill or something for holding it in trust for so long

That would be my concern as well, rather than any sale 'cos you stated in your first post about the negative equity.

Personally, I would pursue it. If just to stop worrying about a big bill in a couple of years time.

Yes, you are right, I will phone the Legal Advice Line from my Trade Union

Hi

I wonder if anybody can help

My OH is due to be discharged from bankruptcy in approx eight weeks time.

I had subscribed to a thread somewhere on the forum ( I think it may have been in the legalities forum, can't remember now) but it has gone, might be too old and has been taken off maybe. Not sure, just can't find it

It had information about removal of incorrect default entries with CRAs after discharge from bankruptcy

Apparently a lot of creditors leave debt entries with the CRAs standing as unfulfilled / not satisfied although bankruptcy should leave these as settled.

So the person who started the thread at the time wrote to all his creditors who were affected by the bankruptcy to confirm to him that the relevant outstanding amount was set to 0 and would show as fulfilled / closed with the CRAs.

Apparently there were some who refused to do this and he subsequently took them to court for "gross extortion of fact" (or something like this)

Now I can't find the thread or any info on how this ended.

I wanted to write these letters once OH has been discharged, does anybody remember the thread, the original poster or has any personal experience with this or any templates ?

Any info would be appreciated !!

If they managed I'd be interested to find out how!

Settled is where something is paid off, so unless the bankruptcy ended with creditors being paid in full I would have thought that showing the debts as settled would be factually incorrect.

No, they have to show as 0 balance as bankruptcy writes these off

The person in question got confirmation that all outstanding balances were set to 0 OK from his creditors, apart from one which he took to court about it, and that thread is gone, probably wasn't updated and then got too old, not sure how that works here on the site

Does anybody know what happens after you have been bankrupt for 12 months ?

OH declared bankrupt early October 2006.

We haven't heard anything from the official receiver since April 2007.

The trustee has last been in contact in October 2006.

Are you not supposed to get automatically discharged after 12 months ?

Will we be getting a letter to this effect or is this just "it" now and we won't be hearing anything else anymore ?

Is anything supposed to happen ? :?

If you go to the Insolvency Register here, you can search for your name on the register. Once you've found your entry, click on your name & on the page that comes up you'll see the date for your discharge. If you haven't received an Income & Expenditure sheet from the OR by that date, then chances are you won't be getting an IPA/IPO as they can't be imposed once someone's discharged. They don't confirm automatic discharges in writing, but if you want a certificate of discharge, the court will charge you £60 for it plus £1 for each additional copy.

You can find out more info about discharge from bankruptcy here.

I am in Scotland and been a few years for me so I know it's different.

But i didn't receive anything. I called the trustees office and they clarified date of discharge etc and said if i wanted the discharge letter need to send payment ( a lot less than up here than down there )

but never needed it

Idax

Oh - thanks for that !!

We were waiting daily for a certificate to frame and pin on the wall or something or a bunch of flowers through the post

Well, by the looks of it it could have been a long wait !

I just checked the above link and it actually says OH was discharged 02.10.07 !

And no, we haven't heard a dickie bird from anybody since April...

Oh well, an unpleasant chapter closed then !

Hi,

I haven't been posting on the site for a while, but hope someone can give me some advice on an issue I am having.

I own a property with my husband who (due to huge credit card debts he ran up) went bankrupt.

His share of the house was taken over by the official receiver. As there was no equity in the property

(due to mortgage and secured loan) the receiver had no further interest in the house and offered me to buy him out for £1.- plus his legal costs.

I agreed and purchased the interest for around £250.- in total.

However, I then received a letter from the receiver stating that he put the property back in the name of myself and my husband with the land registry, basically as it was before. Should the property not be in my sole name now ?

If I split from my husband, would he still be entitled to half of the value of the house ? Would I have to buy the other part of the interest again ?

I am very confused about this.

Can someone clarify this ?

Many Thanks !!

You have only bought his interest not his half of the legal title.

So what does that mean ?

If the official receiver takes over the interest in a property he is entitled to sell the property and pay the co-owner 50% of the proceeds.

Now that I have bought out the receiver, does that indeed install my husbands entire rights back into the property as if he had never been bankrupt ?

Do I now hold 100% interest in the property ?

The property will be returned to how it was before, im not sure what you want, you could argue that you now own 100% of nothing (the equity) but the legal title is still in joint names so to sell etc you need both signatures

If you wanted to reflect that you have acquired the beneficial interest in the property you could have had drawn up a Declaration of Trust which sets out the share of equity each of you have.

That would be registered at Land Registry, so if / when the property is sold in the future and the mortgage is redeemed you would receive any remaining equity.

The problem with changing the legal title into your sole name is that the mortgage company would have to be involved and agree to that.

Hi all

just a quick query or ask for some advice.

My husband went bankrupt six years ago.

As the property was in negative equity I bought out the official receiver for a nominal sum of £1.- plus costs.

Ever since then it's only my name on the deeds but both our names on the mortgages.

We have a first main mortgage with Nat West and a secured loan with Picture

which, after they folded, was sold to a company called Webb Resolutions.

The property is still in negative equity as we have paid Picture / Webb for almost 8 years (£555 per month) but have hardly paid anything off.

There is still apparently an outstanding debt of over 50 K although the loan taken out almost 8 years ago was 'only' 64 K

We have never received any annual statements from them.

I would like to separate from my husband but financial worries are a concern.

Due to my income I can pay the first mortgage on my own but would struggle to pay both the first and second mortgage

as I also have got two young children to look after.

My husband can only afford to pay a certain amount towards the costs of the house as he has to pay rent and live himself , too.

My plan was to try and agree reduced monthly payments with Webb Resolutions,

but I have never had any dealings with that company as we always paid our bills

and do not have any arrears, so do not know what their reaction will be.

If they decline or only agree to a reduced amount for a limited period I could be up in dire straits quickly

as they also have horrendous charges for arrears and 'administrating' arrears.

Now the issues that interest me:

If payments are kept up on the first mortgage can the second lender start repossession proceedings

even though they would hardly get any money out of a sale, as the first lender Nat West

would be paid off first and would get most if not all the money ?

Would Nat West even agree to that as they may even see a shortfall on what they are owned if the second lender goes for repossession ?

How would that work out

Any suggestions or ideas ?

Sounds to me as though it would be in the interest of the 2nd lender to reschedule the loan because the priority payment in the event of repossession would be the 1st mortgage provider.

Is there any PPI on the 2nd mortgage ?

That was my thought exactly but wanted confirmation.

I would write to Webb and explain the situation, that I would keep up full repayment towards the first lender

but can only offer a reduced amount of XXX on their secured loan.

(I could probably afford 1/2 or even 2/3 of the full amount depending on how much my husband can afford to contribute)

I would explain that I cannot sell the property due to the negative equity it is in and ask for their kind acceptance

of the proposal which would be in our mutual interest or something like that.

Oh, and no PPi unfortunately. I had loads of re-claim companies knocking on my door already

First step is to contact them and make an offer.

They will probably accept reduced payments for a time limited period - thereafter they will want a review.

In the interim, any shortfall in the payments is likely to accrue as arrears.

If they have agreed shortfall payments they should not make any arrears charges however.

Do not be fooled into thinking that because there is no equity that the 2nd charge will simply capitulate

and continue to accept reduced payments (logic says that is exactly what they should do as it ensures they get something,

rather than nothing at all), but experience suggests that these companies don't always apply logic when seeking possession.