At the end of the road........

[kdsplit]

Hi there all......

 

Am looking for some advice.

 

we have a mortgage in hubbys sole name(in arrears by 3k)(no equity in house(present times), or if there was would only be approx 5-10k when sold.)

we have a 2nd mortgage on house in joint names (in arrears by 3k)

we have between us approx 60k in loans and credit cards

The business loan is 16k

Bills are mounting up with the business approx 3k

 

Myself and my husband started our own business early 2007. We got through the first year and were still managing to keep afloat with the bills and the mortgage payments etc.

In 2008 we decided hubby would take a full-time job alongside the business to cover our mortgage as the business wasnt able to pay us both.

Hubby brings home approx 800 a month and we are recieving working tax credit of 350 a month.

We have come to an arrangement with the mortgage provider to give us 9 months of interest only payments, and an arrangement with the 2nd mortgage provider for the same but only 4 months.

The 2nd mortgage providors filed for repo but we got it cancelled with the help of this site.

 

We are on the verge of filing for BR and have found somewhere to rent today that we can move to mid-Jan.

 

Questions........................

 

* do we file for BR together as the business is a partnership?

* do we have to pay 2 lots of fees?

* will the OR take possession of the house? Origionally we were looking at handing the keys to the mortgage provider with advice from the CAB.

* will i lose my car? Its worth about 3k but i need it to check on/visit elderly family member each week who lives 60 miles away, and hubby is in the process of changing jobs and may poss need it for work as early starts and late finishes.

 

Im really confused as we have a business as well as the house and personal debts, and cant get my head around everything:confused::confused:

 

I have been reading thread after thread and all are so different.

We are going to see someone at the CAB after xmas, she helped us with the advice before when we were looking at the repo order, but until then im looking for help and advice please.

Thanks x

[rory32]

You can find a lot of the answers to your questions on the insolvency website Publications and Guidance Material Issued by The Insolvency Service

 

In their guide to bankruptcy you'll also find lots of useful contact information e.g. the business debtline should be able to help you with your questions regarding your business.

 

Regarding your car you may have to sell it but only in order to obtain a cheaper car. The value of the car isn't high so the OR may allow you to keep it but only if it is essential so make sure that you stress that it is. The only possible problem I can see arising is that the car is yours and you do not need it for work.

[palomino]

* do we file for BR together as the business is a partnership?

* do we have to pay 2 lots of fees?

* will the OR take possession of the house? Origionally we were looking at handing the keys to the mortgage provider with advice from the CAB.

* will i lose my car? Its worth about 3k but i need it to check on/visit elderly family member each week who lives 60 miles away, and hubby is in the process of changing jobs and may poss need it for work as early starts and late finishes.

 

 

If you petition for bankruptcy each person petitions separately. There may be circumstances where only one of you goes bankrupt.

Each person pays fees.

The OR will be looking for all your assets. This may include your home if there is any equity in it.

Your car will probably be claimed by the OR although you should be able to buy a much cheaper car with the OR taking the difference. Bear in mind that your estimate of the car's value is probably a large over-estimate. In essence a car is worth what someone will pay for it and people aren't paying much for cars these days. As a guide ask a local second-hand car dealer what they would give for it as a trade-in. And then take about 2/3 of that value.

[rippedoff15]

Hi

 

We are in the same position so your not on your own, my business closed after a fall, unable to work and behind on the repayments, we have got loans secured on the house and the house price has dropped £30k in the last 12 mths, we have put a tennant into the property for 6mths and the rent covers the main loan, and the 2nd loan we pay a small amount after confirming to the lender our income, we have moved into a rented house and filing for BR in Jan 08.

 

When the house is sold their will be a shortfall on the loans but they move to unsecured and will be inc in the BR, once the BR is filed the OR will write to your lender informing them of your BR, but as long as they are getting payments from the rent they should hold the sale until the house prices increase. The OR will need confirmation from the lender once it is sold any funds are sent to the OR . Try to keep the house and hope prices increase it helps repay loans etc etc

 

cheers

[kdsplit]

Thanks for the advice guys.

The car realistically if sold private would be worth around 4k, but i put 3k as a quick sale would be r'qd!!

 

Looking at things, and im not deciding anything until spoken to CAB, it looks as if poss only hubby needs to file for BR. The mortgage and the business loan are both in his sole name.

Yes i have debts, but im in the process of the CCA's route so this may starve my creditors, and these are un-secured.

 

The 2nd mortgage is joint, so if he files for BR does this mean they look to me to repay?

[kdsplit]

and does anyone think i should sell the car before the BR and buy a cheaper one?

[rippedoff15]

No sell it to your brother,sister mum or dad , it then has no issue with the OR or your BR as you have access to the car but do not own it

[sequenci]

No sell it to your brother,sister mum or dad , it then has no issue with the OR or your BR as you have access to the car but do not own it

 

Think very carefully about doing this, especially if it is your intention to sell the vehicle for less than what it is worth. This could be viewed as a Transaction at undervalue which may cause the Official Reciever to impose a Bankruptcy Restriction Undertaking.

[Chris1933]

The 2nd mortgage is joint, so if he files for BR does this mean they look to me to repay?

 

In short yes . . . but if you are joint owners the good news is you will recieve half of the sale of the house as only your husband went bankrupt and the Official Reciever only has title on half the house.

 

In theory you will become liable for the whole of the second mortage but what you recieve from the sale of the house could possibly cover this.

 

I am 100% sure about you becoming liable for the second mortage but the rest of this post is purely a theory but it may be worth running it by CAB and im sure a CAGer will soon correct me if my theory is flawed.

 

anyway i wish you all the best and try not let this horrible situation spoil your christmas.

 

Good Luck

 

Chris

[Goldlady]

Subscribing to your thread. Can't offer more advice than has been already given, but wishing you the best of luck on this.

[gizmo111]

What is likely to be the shortfall on the house after the sale?

[kdsplit]

Thanks for all the advice guys!

Re; the car, i was thinking of selling it privately before the BR and purchasing a cheaper one. Cash is harder to trace! and i would still have a car albeit a cheaper one.

The shortfall on the house at the present time.........

1st mortgage 92k

2nd mortgage 32k

house value........130-140k

There are 3 houses in street varied between these 2 figures, and i know ours is towards the top end of these figures.

But in these current house times, it could be a lot less.

[Goldlady]

Also, the OR will value the house at forced sale value. On my friends' IVA paperwork they devalued it by 20%. Which would definitely put you in negative equity as far as BR is concerned.

[kdsplit]

Chris1933...... Thanks for that.

Im not the joint owner of the house though, its hubbys house and he is the only one on the 1st mortgage.

We applied for a se-cured loan on the house, and the company wanted me to sign the forms too even though we told them he was sole owner??

[Goldlady]

Were you a couple when you bought the house? Did you put any money towards it? If so chances are that you have a right to half of it regardless of whose name the mortgage is in - under trust law.

[kdsplit]

Goldlady........ Thankyou.

We kinda thought that the value would be under what its worth, i suppose for a quick sale they sell for what they can get.

[kdsplit]

No we weren't a couple when he bought the house, i just moved in and been here ever since!

[Goldlady]

If it is in negative equity they might let you keep it.

[kdsplit]

I dont think we can afford to keep it anymore, what with the 2 mortgages and all the bills its costing a fortune, we have found somewhere to rent and can move end of Jan. If the OR doesnt want it, then the bank can have it.

[gizmo111]

I dont understand the issue with the car - is it in your name? Who piad for it? Is it on finance/loan? Apologies if I missed something.

[palomino]

I dont understand the issue with the car - is it in your name? Who piad for it? Is it on finance/loan? Apologies if I missed something.

 

Check back on the first post. The OP was asking what happens with the car in the event of bankruptcy.

Although, as you imply, it depends on who owns the car (OP?) and who is going bankrupt (OP, husband or both).

 

If it is sold at a less than realistic price then this will have to be declared to the OR.

[kdsplit]

Hi there, to get the facts right, i own the car, there is no hp or finance on it, but hubby bought it for me for xmas 2004. Does this mean technically they will look at it as his if only he goes BR?

And if i sold it before the BR will the OR trace this?

[palomino]

If it's only your husband going BR then the car is completely irrelevant. You own it (presumably it's in your name - including insurance), not him.

 

As far as the OR is concerned you're just another person and there is no obligation on you to pay your husband's debts.

The OR will only ask if anything of value has been sold at a reduced price in the last year or so. Four years is well outside the timeframe.

 

OTOH, if you are going bankrupt then the OR will want to claim the car as an asset to help pay off your debts. Can't get out of this I'm afraid unless you can somehow convince the OR otherwise.

[kdsplit]

Yes i understand what you are saying, and thankyou.

 

But if i sold the car privately now, and used the cash to buy another cheaper car, would the OR be able to trace this? As i would still have a car if i got a cheaper one? (We would be using the money for the BR costs and deposit for rented house)

Basically i am asking if there would be any come back if i sold the car now and used the cash from the sale to pay for things before it is siezed???

[Goldlady]

No, I think you should be OK. The OR bases what he/she is told on trust so if you no longer have the car and there is no finance agreement then that will be the end of it.

 

So no problem on that front IMO