Advice Please! Bankruptcy, Property Ownership, Tenants Rental Money

[Gr00vebird]

Hello

I have a friend who has used this advice forum a lot and it comes highly recommended

This is my first posting and use of this forum

 

Over the last 6 months I've found myself in a really tricky situation.

I lost quite a high powered job, high income and so on, had no savings, high outgoings etc and stopped paying cards, mortgage and so on. I've recently been re-employed and look well back on track.

But long story short, I've been declared personally bankrupt in court in the last few days. I took a long look at the options, took advice, it was the right thing to do.

Whilst not pleasant much of the process seems straightforward. However one item is pretty tricky and is like to ask for some advice on it please.

 

I live in separate rented accommodation, but I own another flat. The Mortgage is £155k, the mortgage company currently value it at £140k

Mortgage payment is £750/Mth, service charge £150/Mth = total £900/Mth

The flat is rented out for £900/mth (to two Chinese student with poor English skills)

They have paid £900 deposit plus a full year Upfront to cover 1st September 2014 to 31st August 2015. They paid a year upfront as this tend to be normal for foreign students.

 

The money was paid direct to my mother and is held in her bank account as I intended to shield it from my personal bankruptcy. However, since late August around half had to be used for day to day expenses and there is £5800 balance remaining.

 

The mortgage on the property has not been paid in 6 months and a repossession order is in place with a hearing booked for Monday 1st December.

 

The official receiver has indicated she's not likely to be interested in the flat as its in negative equity and therefore it's up to the mortgage lender if they wish to force a repossession. However she is keenly pursuing the rental money held in my mothers account.

 

If the lender insists it is repossessed then the students will be evicted at some point. They rightly should expect the remaining balance of rental money. However the official receiver is demanding I hand it the rental money immediately. I fear if I hand it over now the tenants will not not see it and not only be asked to leave but will also be left without any rental money to find a new place, along with this being hugely disruptive to their final year studies. The thought of this is a heavy burden to me and I'd like to know what my options are with the tenants and the situation as a whole. Aside from dropping them right in it, I can see them pursuing my legally for the rental money.

 

Ultimately I'd like to keep the flat, setup a plan for payment with the lender to settle the shortfall and get it back on track. I wondered if there was any way I could do this.

 

Any advise or guidance would be very helpful.

Kind Regards, Rob

[AndyOrch]

Thread moved to the appropriate forum.

 

Welcome to CAG Gr00vebird .......advice will be along shortly.

 

Regards

 

Andy