Please can someone advise re my ex's bankruptcy and my home..

[dampenedspirit]

I've only just found this forum and it looks like many of you on here give great advice.

Please can someone help me...

I'm a single mum of 3 children. My husband and I separated about 3 years ago when I was pregnant with my last child. He was declared bankrupt 3 years ago. We jointly own a property which I live in (for now) with the children. He lives elsewhere. We've both been breaking our backs to keep up with the mortgage repayments which is in joint names. However his trustees called me today stating they were meeting tomorrow to discuss whether to put the house up for sale. It's been up for sale by myself for a year with no joy as I wanted rid as painlessly as possible.

 

We're mortgaged to the hilt and cannot afford to buy the beneficial interest in the property which isn't a lot only 5 thousand. I don't know if we'll be forced to sell or have a charging order placed on our home. Either way sounds grim to be honest. We also have a suspended possession order hanging over our heads and are beginning to wonder if its worth paying the mortgage at all as we're really struggling and are in a no win situation, either the trustees will take the house or the mortgage company. I really am at my wits end about what to do, I feel like handing in the house keys, but who to?. I could really walk away but I'm worried about the consequences especially for the children.

Any advice about this difficult situation is much appreciated.

[elliesnan]

bump

[StinkyFeet]

I feel so sorry to hear what you are going through and is great that even though you and your partner are seperated, you are both trying so damn hard to provide for the children. It does seem like a very complex situation your in and like you have said the house has been on the market with no joy, therefore wouldnt personally think it would be in the trustees best interest to take the house if there is no equity in it after the mortgage is re-paid.

 

You could hand the keys back to the mortgage company but this could create new problems for you as they would normally sell the house, maybe at auction and any shortfall they would come to you and your ex-partner for. This would then create you further heartache for further years so would be really wary bout doing this.

 

Have you possibly looked at going into a rented accomadation for a bit? Maybe its a possibility if you have had enough of the house and its not worth the grief or stress to contact the trustee and tell them they can take it.

 

Obviously im no expert but am trying to support in ways I can, on my rough ride over the past 9 years have learnt a few things hence what I have written above. Especially with regard to the house.

 

Keep us posted hey and stay positive

[Lula]

I dont know much about situations like this but I do know that you do not hand the keys back, because you will have made yourself intentionally homeless, if you want the council to re house you, you need to be evicted. So, all the other stuff I do not know about, but this is something that you need to keep in mind for the future, as for the house, at the end of the day, it is just bricks and mortar, the important thing is that you and your children are together and happy. If letting the house go means that you can have a clean start somewhere else, then perhaps it is something to consider, but do not hand the keys back, make them evict you.

[StinkyFeet]

Good point, also forgot that bit myself, you would be chased for any shortfall and as Lula has stated, you would in theory have made yourself homeless. Second that, stay put and make them evict you.

[dampenedspirit]

Thank you Lula and stinkyfeet for your replies and support, I don't feel so alone now. I have been ringing legal organisations like mad to try and sort this situation out. I also phoned the estate agents that the house is marketed with and they state that the housing market is dismal and it may be worth much less than it is marketed for, the price hasn't changed for 6 months. If this is the case it will then be in negative equity.

I will stay put and let them evict me. It will be hard (I'm crying as I write this) but it seems the best option. Many thanks

[gizmo111]

Ok then if you have decided that waiting for eviction is the best solution, then stop paying the mortgage and save up for a deposit and a few months rent on a new place.

How much is the shortfall likely to be following your conversation with the estate agent, and do you have other debts.

What are rental prices like in your area?

[dampenedspirit]

Hi gizmo,

Just spoken to the trustee, they've told me they're unlikely to sell the property in the current market. They want to put a charging order on it or come to some arrangement with my ex re him paying the 5 thousand in instalments which he can't afford. We're just keeping our heads above water as it is.

I have an appointment with a solicitor next week and have contacted 3 estate agents to give me valuations tomorrow on the property's current price. If is in negatative equity I was by a friend told I can buy the beneficial interest for a nominal fee from the trustees. Though I doubt they'd agree to it as they want as much money as possible. Does anyone know anything about this?

 

Renting is expensive in my area, it's just the same as the mortgage. Yes I do have other debts but my main concern is the mortgage and I can't face those. Gizmo I think the shortfall may be between 3-8 thousand. Many thanks.

[gizmo111]

I don't see how they can put a charge on a property for more than its worth - what was the exact date of his BR?

The rents may be the same as the mortgage but would you be entitled to some benefit to help with it? Check Start Calculation

The shortfall is quite small so it is probably worth hanging on - have you tried ot remortgage to a better rate in your name? Maybe consider interest only for a couple of years to give you a chance to tackle the other debts in your name?

[StinkyFeet]

Try to stay positive and dont get upset, its a terrible situation and I for one feel more confident daily since finding this forum and having the support and advice given.

As Gizmo111 said above, another cracking idea to bring the mortgage payment down could well be worth looking at going onto interest only, this should reduce your payments somewhat to free up a bit more case each month. This could be used to crack on with other debts, save towards rented or even come up with a payment plan to pay the ex-partners interest out of the property.

[dampenedspirit]

Thanks Gizmo and Stinkyfeet,

This forum has indeed been a godsend to many, me included. Sadly we are only paying interest on the mortgage until our situation improves. We are trying to keep the house if possible but if it becomes no longer viable we will concede defeat knowing we have tried everything possible to keep the property. I am already looking into other housing options suggested by you both and Lula. He was made bankrupt at the end of Feb 2006 I think. So the 3 years is up very soon, and we've tried really hard to sell the property ourselves with no luck.

I am so grateful for all the words of support from you. With that and my childrens smiling faces I will carry on and try not to get too down about it, it really has kept me going.

[StinkyFeet]

A charging order may not be a totally bad thing as this at least lets you keep the house for you and the children and would only kick in upon sale of the property I think. This means you could sit on the house for 5 / 10 / 15 years and only upon the sale would they be paid. Am I correct in assuming that they are only looking for half of any possible equity?

If this was the case and the country gets back on its feet in the future, you could sell the home when it has equity back in it and least your half would be yours to go towards a deposit for a new home.

 

Am pretty sure this is how charging orders work, hopefully someone could confirm further to hopefully bring you a little light.

[dampenedspirit]

Thanks Stinkyfeet, yes it is for only half of the property. I will ride it out and see what happens. I was unsure of the amount they'd charge to the property. My ex was made bankrupt for £25000. Would they apply that amount for the charge or only half of what equity is on the house at this present time? I've no idea to be honest. Well I have to look on the bright side a charging order is a far better alternative than an order for sale. Stinkyfeet you really have kept me positive through this.

[palomino]

I don't see how they can put a charge on a property for more than its worth

 

A charging order secures the debt on the property. While the primary object is to recover the debt you should not forget that a secondary objective is to prevent the disposal of the property.

[dampenedspirit]

Palomino, does this mean they will secure the full £25000 on the house or will it be the £5000 they wanted me or my ex to pay now. Really unsure of how this works. Also a friend of mine stated I could add conditions to the charging order preventing the Trustees selling the property until my youngest reaches 16 or 18 if in full time education. Is this true?

[palomino]

A charging order is simply a 'lock' for want of a better term. There is no amount mentioned.

 

When the property is to be transferred the Land Registry will not re-register the property until the person/organisation who obtained the charging order issues a certificate to say that the charging order has been discharged.

Obviously they would not do that until any outstanding monies were paid, although in practice there are likely to be negotiations of the 'who blinks first' variety.

Edited January 29, 2009 by palomino
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[dampenedspirit]

Thanks Palomino,

At least I'll be clued up when I see my solicitor next week. Thanks everyone for your help and I will let you know what happens and how I get on.

[palomino]

No probs!

 

Keep us posted - there are many people here who are interested in your experiences.