Is Bankruptcy the best option here?

[tonycee]

It is owned in a private capacity.

In which case, you should have no trouble getting them evicted.

No judge will refuse you if you want to sell

 

What a mess...

 

I lost £ 100k ( one hundred thousand pounds )

But im fine, i survived. I swore a lot, but hey, its only money.

Yes its a mess, yes it hurts, and yes it will take time.

But YOU have to do whatever you can to maximise your interests.

[bottomburp]

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[sarah1975uk]

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?

 

 

Aww Jane jennifers you have not been at all selfish you are under so much stress sweetheart and we all go along the emotional rollercoaster that stress and debts brings.

 

I can see you have made lots of friends here and we are all behind you 100%, i personally would do as i suggested look into a company buying your home, you cut out agents fees etc, also look into the auction option aswell, although you then have to MAKE SURE YOU PUT A RESERVE ON the auction and look into what fees you would have to pay even if the house doesnt sell at the reserve. Balance up what options you have at your disposal and do only what is right for you and your family, dont be railroaded into something that in time to come that you may regret;) Remember you are NO1 in this.

 

As for me am in same sort of boat as you debts and property:( as for anything to offer me mmmm well a share of the equity when you sell would be nice haha (only teasing ).

 

You will be fine, anytime you feel wabbly post on here, there will always be someone about to offer you support and a frendly ear

[jane jennefiers]

I am going to be honest with you guys. I am so so scared. My stomach is like a race track. I just read all the BROs on the Insolvency Web Site. It seems there are many people who genuinely try and get out of it alone, mess it up even further and end up on a black list for 15 years.

 

I am scared that I will end up Bankrupt and in prison if I try and sort it out and fail.

 

But I will start phoning Auction Companies and also see what can do with the unsecured.

 

How to manage the fear...

 

Try to be logical I suppose.

 

I will post any feedback I get from companies before making any decisions.

[gizmo111]

It seems there are many people who genuinely try and get out of it alone, mess it up even further and end up on a black list for 15 years.

 

BRO's for 15 years are quite rare, most BR's are discharged within a year, which is why you see such a large no on the website with BRO's cos the rest are just a huge turnover.

 

I am scared that I will end up Bankrupt and in prison if I try and sort it out and fail.

 

Debtors prisons went years ago, and as I see nothing fraudulent or criminal about your actions you will NOT go to prison.

 

Take it one step at a time, you owe some money which at the end of the day is just bits of paper and metal, this is all you owe, not your health your life or your well being. Try to calm down, and look into the things that have been mentioned above.

 

Keep us informed and we will help as much as we can.

[jane jennefiers]

OK. Research starts tomorrow.

 

Many thanks.

 

I hope will be able to put something in and help others. This is what the internet is about in my view.

 

Again, many thanks!!!!!

 

J.

[sarah1975uk]

your best bet is to think of it all in bite sized chunks if you look at the over all 24/7 it will eat away at you. Do whatever you can do LEGALLY! to get rid of the other house rather than the bank reposesing it. That way it will have a better effect on sorting the rest of your debt out.

 

At least you are facing your problems sweetheart and not running away from them.

 

you wont go to prison for going bankrupt, the courts and OR will have seen everything in their time, from the honest genuine cases to the fraudulent misleading ones. You have nothing to worry about, people who know a hell of a lot more than me are always about to help you as best they can;) You can get control of this situation, just try and arm yourself with as much info on all possibilites as you can and it will really help you. ;)

[tonycee]

OK. Research starts tomorrow

 

Good Luck.

 

Make a list of all the things you need to do.

Its a great inspiration to cross them off as " done "

[Edz11]

I assume that the rental income on property 1 is very significant in money terms. In the tens of thousands a year? The question of capital gains tax will raise its head if you dispose of it (dependent on the usual factors).

 

If the rental income isn't covering the mortgage on property 1 then you need rid asap. If it hapens to be a lease (and at that level of rent it almost certainly will be - with a company? - then you're tied until it ends or it gets repo'd and even then you are still liable for that breach).

 

The unsecured debts do need investigating. As has been mentioned already - sending off a CCA request will produce paperwork which will establish if the debts are enforceable or not. If they do not produce the agreement containing prescribed terms then the creditor is prevented from taking enforcement action via the Court. You can then pay back those cases using your timescale not theirs.

 

Waiting to realise the equity in property 1 might not be realistic. It isn't an asset - it is more a millstone at present.

 

You haven't actually said that you rent out property 1 - but your post reads that you do. If you don't, then renting out that property (so long as it will pay the mortgage) with you renting a third property, until property 2 (which would be rented out under that scenario) is available for you to use.

[jane jennefiers]

I assume that the rental income on property 1 is very significant in money terms. In the tens of thousands a year? The question of capital gains tax will raise its head if you dispose of it (dependent on the usual factors).

 

Yes. But we took it in a lump sum and it is spent.

 

If the rental income isn't covering the mortgage on property 1 then you need rid asap. If it hapens to be a lease (and at that level of rent it almost certainly will be - with a company? - then you're tied until it ends or it gets repo'd and even then you are still liable for that breach).

 

Yes. Commercial with a company. We would have to refund rent pro rata.

 

Waiting to realise the equity in property 1 might not be realistic. It isn't an asset - it is more a millstone at present.

 

This is how it seems to me also. I can try and sell it, but it seems that it is touch and go whether what is realized would make any serious impact.

 

The unsecured debts do need investigating. As has been mentioned already - sending off a CCA request will produce paperwork which will establish if the debts are enforceable or not. If they do not produce the agreement containing prescribed terms then the creditor is prevented from taking enforcement action via the Court. You can then pay back those cases using your timescale not theirs.

 

I am on this.

 

You haven't actually said that you rent out property 1 - but your post reads that you do. If you don't, then renting out that property (so long as it will pay the mortgage) with you renting a third property, until property 2 (which would be rented out under that scenario) is available for you to use.

 

We rent Property 1, as above. We live in property 2 which is worth 210K and mortgaged for 175k plus 3.5k redemption fee. Yes. i guess we could rent it. But it would only fetch the same as we would need to pay rent on a property to live in. So may as well sell it if I don't go BR.

 

If equity from property 1 and 2 would clear tenant refund and mortgages, that leaves unsecured of 150k plus unknown litigation, say 60k maximum = 210k total.

 

So, is that result (reducing burden to 210k unsecured), worth it as compared to BR?

 

And if I can not realize enough from sale of both properties to actually clear both mortgages and refund tenancy lease, then it leaves me either with unsecured debts plus mortgage shortfall and breach, or no sales and the same situation as the present.

[tonycee]

. If it hapens to be a lease (and at that level of rent it almost certainly will be - with a company? - then you're tied until it ends or it gets repo'd and even then you are still liable for that breach).

 

Not true.

Taking back your property under these circumstances will be granted, without question, by any court in the land.

You will have to pay back the owed rental, but you can add them to your list of unsecured creditors.

 

This is how it seems to me also. I can try and sell it, but it seems that it is touch and go whether what is realized would make any serious impact.

 

Sorry to be brutally frank, but if you dont do everything that you possibly can at this stage, you will be paying for a long time to come.

You will NOT be made bankrupt, you are NOT insolvent.

If you dont do what you can, somebody will do it for you, and charge you

tens of thousands of pounds for the privelage.

[bottomburp]

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[jane jennefiers]

If you could answer the bits in red that would help though I'm sure others will have more questions, as will I.

 

Property A has a monthly rental value of £4250.00. The mortgage is 5.5K per month and was missed last month for the first time by arrangement.

Property B would fetch around £650.00 per month in rent - equal to the rent we would have to pay for alternative accommodation. Mortgage was missed for the first time last month by arrangement. Litigation is for allegedly not delivering as advertised. Cost to defend as quoted by solicitor = £60K. They would take between 30K and 40K out of court I think. No, cannot use prior knowledge of previous cases against other side.

Projected income for new venture hard to cite. Perhaps 75K in year 1 raising to 125K by Year 3.

We are nowhere near statutory demand. This is first month we will have missed any unsecured creditor payment. All up to date otherwise. Only one is with collection agency.

 

Please accept apologies for lack of clarity in earlier posts. I think this is to do with a natural ambivalence about disclosure and fear of consequences. Not logical, I know. Certainly it has not been an intentional waste of anyone's time.

 

I hope the above rectifies that.

 

Placing emotions aside and addressing the facts, i think the most difficult thing is analyzing the differential of opinion. CCCS say: Go bankrupt. it is your only choice. Everyone else says: you are not insolvent: work it through.

 

The child in me wants it all to be over. But my brain is beginning to wonder whether there is a strategy that might work.

[Edz11]

But, on the sums you are not bankrupt. You do not owe more than you own, at least on paper. The disposal of the rented property prior to the end of the lease is not really a goer. Depending on the basis of the lease you may be able to terminate it early but that would then mean you have an empty property which is not earning rent and is producing a liability for rent to be refunded for the period of the unexpired lease.

 

What I would do is initially ring up the company that you've leased the house to. I would explain that you may be forced to sell but that as their employee is obviously settled and that you have no wish to uproot the tenant you would wish to offer sale on prefential terms to them. They may not be interested in the slightest - but on the otherhand, they may be interested. You have nothing to lose and they can benefit from reduced sale costs etc as much as you.

 

If that option fails then it's estate agent time. But I'd "ask for advice" rather than say you want to sell. Don't speak to someone at the first desk you see as you walk in the office. You need a manager at least. It is possible that they might know someone who may wish to take the property with a sitting tenant who will be gone in x months which then means that it can be sold for a higher price. (Please read between the lines here).

 

As for the litigation bit - you'd be suprised at what you can learn on here. But, you need to supply some detail!

[jane jennefiers]

You do not owe more than you own, at least on paper.

 

I think the sums look something like this:

Assets

Property A Value = say 1.2M

Property B Value= say 210K

Total at sale = 1.41M

 

Debts

Property 1 Mortgage Repayment, depends on when and how many missed payments = say 1.1m

Early Redemption Fee on property A if sold before Spring 2009 = £50K

Capital Gains on Property A = say 30K

Lease rental refund = say 50K

Property B Mortgage Repayment = 175K

Unsecured Debts Plus Litigation = 200K

Total Debt = 1.605M

 

That's a shortfall of over 200K.

[The GodMother]

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.

 

 

I actually rent a property now but it is off the council. It is a safer bet were we live.

[tonycee]

Good evening JJ.

I hope you are bearing up ok.

 

Have you spoken to your mortgage providers ?

Have you asked for a defered payment period ?

Have you considered an interest only option ?

Does your age allow you to extend your mortgage term, and therefore reduce the monhly payments ?

 

Sorry to be so personal.

[jane jennefiers]

Have you spoken to your mortgage providers ?

 

Yes. Good relationship with A.

 

 

Have you asked for a defered payment period ?

 

 

Not really. But Property A providers are very friendly and seem flexible.

 

 

Have you considered an interest only option ?

 

 

Already got it.

 

Does your age allow you to extend your mortgage term, and therefore reduce the monhly payments ?

 

 

I am 45

 

Sorry to be so personal.

[tonycee]

Have you spoken to your mortgage providers ?

 

Yes. Good relationship with A.

 

 

Have you asked for a defered payment period ?

 

 

Not really. But Property A providers are very friendly and seem flexible.

 

 

Have you considered an interest only option ?

 

 

Already got it.

 

Does your age allow you to extend your mortgage term, and therefore reduce the monhly payments ?

 

 

I am 45

 

Sorry to be so personal.

 

Please talk to them as a matter of urgency.

Contrary to popular belief, they do not want to repossess your home, they would rather have your money for 25 years.

You may be pleasantly suprised with their response.

This link might just help you to.

National Debtline England & Wales | Debt Advice

 

 

I have absolutely no idea how these stop repossessions - Google Search work, but worth a look ?

[bottomburp]

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[jane jennefiers]

Actually, I appreciated the toughness. The straight talking got me out of self pity and into rational thinking.

 

I am going to talk to them and see what they will be prepared to accept and do.

[Docman]

Hi JJ,

I’ve read the various posts on your thread. As someone who used to work for the Official Receiver until I retired many moons ago, I have to say to you that you should NOT consider bankruptcy as an option at this stage. You simply have to much going for you – and now you will find a lot of help from this forum.

First things first - take one day at a time- but make sure you start to take actions each day.

Second, let’s deal with property A. If the company currently leasing it don’t want to buy, then approach the mortgage copany. The last thing they want to do is repossess, especially as it would take them several months to gain possession with a sitting tenant – and then they would have to sell the porperty before they get their money back. See if they will allow you to defer the interst until the end of the current lease when you will have to sell. I calculate you will owe around £85k – 90k in interest payments by then. Offer to repay £100k if they defer. Even if you sold today, you would have to pay the interest penalty of £50k, which you would avoid by deferring the sale by 15 months, so the additional cost would be another £50k.

When the current lease expires, make sure you move back into the property before you sell because – (a) its always easier to sell a residential property with someone actually living in it; (b) it will give you time to make it as presentable as possible after a tenant; and © you could avoid the Capital Gains Tax if the property becomes your ‘principal private residence’, even for a short time.

Thirdly, deal with your unsecured creditors. Take advice from this site and CCA all them. If they have vaid agreements (and many do not), then send them a Subject Access Request (SAR) under the Data Protection Act in order to obtain old statements. Calcluate any unlawful charges and claim these back. Then make them an offer of a reduced payment until you are back on your feet.

Fourthly, the claimant who is taking you to Court. Forget the £60k idea. You will be able to find enough advice on this site to defend an action. Paying out this kind of money now for legal costs is a very bad idea. If you feel in any way responsible to the claimant, write a letter headed ‘Without Prejudice’ and explain your financial position. He may realise he won’t get paid if he takes you to Court, where you would have to defend yourself anyway.

Finally, when you have sent out the letters or taken the steps outlined, forget about these debts for the next few days. Put your feet up and have a bloody good Christmas!

[jane jennefiers]

Hi Docman

 

I want to thank you for your advice.

 

Based on your post, I have drawn up the following plan.

 

1. CCA all unsecured Creditors. Include in the same letter a request to freeze accounts and accept £1 per month until I am back on top.

2. Explain to the mortgage company on property A what is happening and offer them a percentage of the differential between the sale price and the redemption fee in return for them agreeing to defer payments until end of lease and sale.

3. Do my best to stay in Property B until 209. Then sell and move into Property A.

4. Let litigators spend their time and money preparing a case. Less clear about what to do about that.

 

I will list all responses as they come in as a record for others in the future.

 

Again, many thanks for your post.

 

I have decided NOT to file for BR.

 

J.

[GuidoT]

JJ - start a new thread about the litigation you are involved with and explain in reasonable detail how far it has progressed and the facts, including the sums, whether against you personally or a limited firm etc.

 

We should be able to provide you some advice on how best to deal with it.

[jane jennefiers]

I would actually like to do this, because it has been going on for over 6 years and has caused me a lot of pain.

 

However, I am concerned about liability, being recognized etc.

 

I suppose I could frame my posts in 'Without Prejudice'.