Is Bankruptcy the best option here?

[jane jennefiers]

I own 2 properties.

Both are mortgaged in both mine and my wife's name.

Equity in Property 1 is between 100k and 250k

Equity in property 2 is 25k

Mortgage outstanding on Property 1 is 1,000 000 and costs 5.5k per month

Mortgage outstanding on Property 2 is 175k and costs 1.1k per month

 

Can not pay Property 1 Mortgage at all

Can pay property 2 Mortgage for another few months

Have 150K of unsecured debt

 

Have a pending commercial litigation case that could cost 60k to make go away.

 

That makes for around 210k unsecured plus a mortgage I can not pay.

 

I can not sell property 1 because the tenancy agreement with the tenants is unexpired.

 

Bankruptcy is tempting except for the fact that I am afraid that I will be placed on an income plan that will force me to pay anything I get in the future towards my creditors.

 

Unsecured consists of HSBC, AMEX, MBNA, Barclays (CDCS)

 

I can start again, but with the weight of all this over me, there is no point. I'll be paying it all off forever. That's how it feels.

 

Anyone with experience happy to say what they would do. Just looking to bounce some perspectives.

[bottomburp]

deleted

[bottomburp]

whoops!!! posted twice

[sarah1975uk]

Just wanted to say your not alone there are a lot of people here that are very knowledgeable and will help you out as much as they can

[blind-as-a-bat]

If you where to declare BR the worst you would have to do is pay an IPA out of your surplus income for 36 months from the start of the agreemant (wich can comence any time in the 12 month (or less) period that you are BR before discharge)

 

So worst case is that you will be stuck for four years before your finances are your own, so to speak, to rebuild

 

Not sure if that helps any as you may already know that but if you didnt at least it gives you a time frame:D

[travisperkins]

Mistake. Sorry.

[jane jennefiers]

I am so scared.

 

I only just noticed I had some replies.

 

Thank you to those who posted.

 

CCCS has advised BR. They say that I have no real chance of paying back Unsecured; plus they say very soon the mortgage companies will step in.

 

The problem is, this all started due to mental health problems, hospital, medication and finally a slow move towards recovery this year; and it is so hard to remember the actual events financially.

 

If I go BR then it seems I could pay for four years into the IPA. And if I do not I could spend four years trying to get rid of the debt.

 

None of it seems worth it at all.

 

No wonder people just walk out into the distance so to speak.

 

I suppose my question now is: are the CCCS almost always right. because if so, there little point dwelling on the decision any more.

[The GodMother]

Have you got CCAs for the unsecured debts.

 

If not and they are not valid CCAs you can use this as a barganing tool to get certain things sorted out like reduced payment.

 

With the cards is there any charges like overdrawn fees etc. U may want to look at getting these back and creditored to your account.

 

You could always CCA any of the unsecured debts, Mortage will not cum under a cca, and see if they hold a valid Consumer credit agreement of th e1974 rules. If not they have no rite in charging you any penalty charges and then you can offer a reduced payment offer based on this.

 

You will find the letter template in the template letters in the stickys above this thread you will require letter N.

 

Send a £1 postal order and send buy recorded delivery at lteast.

 

DINT SIGN THE LETTER. Companys have been known to get photoshop happy and copy and paste your signature into a cca. that is also why you dont send a cheques.

 

They have 12 working days from recipt of the letter to send you the documents and if they dont you can stop paying them. after a further 30 calandar days they cannot enforce a credit agreement without going to court.

 

Remember to send buy at least recorded delivery as you need proof of delivery.

 

Chrissi

[bottomburp]

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[bottomburp]

Sorry about that coming out in one big chunk, copied it across from word and can't get line spacings in.

[sarah1975uk]

im sure ive read somewhere that even if you have tenants in your house, that if you need your house back to move into or for personal reasons that you are able to give notice for the tenants to vacate.. cant remember where i read this but im sure someone will be along that knows the right answer;)

[jane jennefiers]

I do not mind answering questions.

 

My business is such that I am about to take up a new opportunity (Self-Employed). If I had no debts it would earn me a modest living. But with all the debts it will just serve to make a minimal impact. So, ironically, the future is quite bright, except for the fact that when you look at potential income set against debts it is hard to see the point.

 

Yes I am the defendant. It is a breach of contract case claimed by someone wanting to get money. He has done it before to someone else. Basically, they claim I did not provide the full service as advertised.

 

Tenants have another 15 months.

 

I intend to use the letter templates today to see if the unsecured are enforceable.

[tonycee]

im sure ive read somewhere that even if you have tenants in your house, that if you need your house back to move into or for personal reasons that you are able to give notice for the tenants to vacate..

 

This is correct and depends on the type of tenancy agreement.

Debt Factsheets - How can my landlord end my Assured Tenancy?

 

 

I would suggest that YOU start the process immediately.

If you house is re possessed,

BBC NEWS | England | Devon | House repossession 'lost me £22K'

your mortgage provider will have to follow the same process, and you will be liable for their costs.

A judge at a repossession hearing, will look favourably at you if you are actively trying to sell the property.

Good luck.

[bottomburp]

deleted

[The GodMother]

im sure ive read somewhere that even if you have tenants in your house, that if you need your house back to move into or for personal reasons that you are able to give notice for the tenants to vacate.. cant remember where i read this but im sure someone will be along that knows the right answer;)

 

 

You are rite. All you have to do is:-

 

if the rent is paid 4 weekly give them 4 weeks. If the rent is paid weekly give them 4 weeks notice. It does depend on how the rent is paid but you still have to give 4 weeks notice. If they have paid 6 mths rent in advance l would speak to a solicitor and see what they say but you could always let them live out the tenancy and then evict them that is unless the no owner wants them to stay on as tenants. You could even leave them in the property and let the new owner deal with them.

 

But l would advise them that the property is going on the market and that ppl will be viewing. I would also advise the real estate agent that there are tenants in the house as they would need to inform any potental buyers.

 

Chrissi

[sarah1975uk]

I am so scared.

 

I only just noticed I had some replies.

 

Thank you to those who posted.

 

CCCS has advised BR. They say that I have no real chance of paying back Unsecured; plus they say very soon the mortgage companies will step in.

 

The problem is, this all started due to mental health problems, hospital, medication and finally a slow move towards recovery this year; and it is so hard to remember the actual events financially.

 

If I go BR then it seems I could pay for four years into the IPA. And if I do not I could spend four years trying to get rid of the debt.

 

None of it seems worth it at all.

 

No wonder people just walk out into the distance so to speak.

 

I suppose my question now is: are the CCCS almost always right. because if so, there little point dwelling on the decision any more.

 

hope your ok today Jane jennifers, been thinking about you! Im going through crap aswell at the moment and have had a tremendous amount of support from kind people from this forum. Had a really bad weekend, but have learned that you have to take things in small size chunks and deal with things in a list like manner to make sure you keep a handle and some level of control on the situation. Another option im thinking about regarding the house which isnt ideal but would get rid of one of the houses. You know these companies that by houses from you, perhaps some as much as 90% of market value, they dont charge upfront fees and you dont have to then worry about estate agents fees which on a house of massive value of yours you would save money that way too and having the tenants paying rent in that house may also work in your favour if this scenario was viable for you. because you have a huge amount of equity in the house that it may be that even though they offer below market value that the equity will balance this out enableing you to either break even or have a bit of money left over to pay onto your debts.

 

 

Just an idea in these situations got to try and investigate every possible way to get out and then gather all info and try with the help of your friends on this site make an informed decision of what is best for YOU & Your family as at the end of the day thats all that matters.

[gizmo111]

I think you need to get the properties valued to see how much equity you have, and how much would be realised for a quick sale. If you have equity of £275K then you are not insolvent, you would have money to pay your debts and some left over so going BR would be pointless. If however the equity is significantly less than your debts then BR may be the solution. But whatever happens you need to be aware that the mortgage co will be looking to reposses after 3 missed payments anyway. Which house has the mst equity - your home or the BTL?

[jane jennefiers]

That's a great idea.

I had actually thought of auction.

I will get some valuations.

 

I feel I have been selfish...what is your 'crap' Sarah?

 

Is there anything I could offer you?

[jane jennefiers]

Hi Gizmo

 

Because of the weird downturn in the market, the equity in the BTL could have anything from 100k to 250k. Our home only has about 25k.

 

If you think Mortgage Co. will only tolerate 3 month, then there is little point fighting on really.

 

I was wondering whether they would strike a deal and hold off for 18 months in return for a cut.

 

But even if they did: the Unsecured debts plus litigation is still huge.

 

The thing is, I can work, I can earn again. But it is a matter of trying to work out the best course of action to minimize the amount of future income I will have to put into debts.

[gizmo111]

That's a great idea.

I had actually thought of auction.

I will get some valuations.

 

I feel I have been selfish...

 

 

Of course you haven't been selfish, just overwhelmed. Let us know how you get on so we can help further.

[tonycee]

But l would advise them that the property is going on the market and that ppl will be viewing. I would also advise the real estate agent that there are tenants in the house as they would need to inform any potental buyers.

 

Sorry, but as a landlord for over 11 years, may i suggest that this option is not legally possible.

Regardless of your circumstances, the tennants still have rights.

You may enter the property only twice yearly, giving sufficient notice, and the tennants have a right to be there.

 

You CANNOT simply send people round when you want to without the current tennants permission.

They can simply refuse entry.

 

May i again suggest that you start their eviction process ASAP.

Every day lost could cost you hundreds£££££££££.

 

No more talk like this,

 

If you think Mortgage Co. will only tolerate 3 month, then there is little point fighting on really.

 

The outcome Might be the same, but the costs will be considerably less if you do it.

 

Come on lets fight, fight, fight.....

[The GodMother]

Sorry, but as a landlord for over 11 years, may i suggest that this option is not legally possible.

Regardless of your circumstances, the tennants still have rights.

You may enter the property only twice yearly, giving sufficient notice, and the tennants have a right to be there.

 

You CANNOT simply send people round when you want to without the current tennants permission.

They can simply refuse entry.

 

May i again suggest that you start their eviction process ASAP.

Every day lost could cost you hundreds£££££££££.

 

No more talk like this,

 

If you think Mortgage Co. will only tolerate 3 month, then there is little point fighting on really.

 

The outcome Might be the same, but the costs will be considerably less if you do it.

 

Come on lets fight, fight, fight.....

 

Well this is wot my landlord of a few years ago done to me and they were in and out of the property when ever they felt like it. If you refused to answer the door they just let them selves in. They would even try and knock the bathroom door down when you were in there.

 

When l went to the cab and a solicitor l was told the landlord was acting within the law and they could do this if they want as it was there property.

 

We were then given 4 weeks notice by the new landlord and tried to appeal it but the courts said that everything had been done legally even with us still in the property when it was sold.

 

Ok this was 6 years ago but l am going on whatthe court, solicitors and CAB saying.

 

Chrissi

[MilkTrayMan]

...I can not sell property 1 because the tenancy agreement with the tenants is unexpired...

 

...You can certainly put a tenanted house on the market. Even if you’ve been paid up-front there’s nothing to prevent the house changing hands whilst the tenants are in situ...

I can verify what bottomburp has said is correct!...

 

A few years ago when I was a student the Landlord sold the house where I was an Assured Shorthold Tenant.

The NEW Landlord was only too pleased to already have sitting Tenants cos it mean instant income for her from Day 1.

I even managed to wangle a Months FREE rent for showing prospective purchasers around etc!...

 

Am NOT sure what the 'Buy-to-Let' Market is for a property valued at £1million + overheads of a £5.5k mortgage to cover is though??

...The last mortgage I was paying, was only £100pm!...

 

Is the Property owned in a Private capacity, or owned by your Company (...if U have a Company that is, + it is that which is subject to the pending litigation)??...

 

If all else fails, would it be possible to transfer any viable assets into your wife's name + take the hit of Bankruptcy, just yourself??

It used to be able to be done, but am NOT quite sure whether the loopholes have been closed now??...

 

I suppose it ALL depends on what the commercial litigation is about...i.e. Unpaid taxes etc as to what the tenacity of the other party would be + to what extent that they would press for any monies owed them?!...

[jane jennefiers]

It is owned in a private capacity.

 

What a mess...

[tonycee]

Im really sorry to hear this Chrissi.

Landlords like this give us all a bad name.

If you ever rent again, this will tell you, or anybody, what you need to know.Shelter: Private tenants' rights

 

I am not here to fight or lecture, or be the bearer of bad news, so much depends on the type of tenancy.

In this case whatever it is, time is money, and could be lots of it.