Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By mrsmith
#2606 I see there is another thread on this but it doesn't cover my question so here goes...

I declared bankrupt last week and my wife & I are keen for her to buy out the beneficial interest in our house as soon as possible (house/mortgage is in joint names). Is it possible to negotiate with the OR or is it a matter that he says what he wants and thats it?

When I spoke to the OR's office last week I was told to obtain a valuation from a reputable estate agent (got one coming today) and a mortgage redemption figure. When the OR comes to a figure is it a matter of simply deducting one from the other and dividing by 2? We have a secured balance which is one amount but then there is £4k early redemption costs, plus there would be approx £3k sales costs therefore from our viewpoint we'd like those to be included in the secured debt before splitting the difference. Is this likely or are they only interested in the 'raw' secured amount owing? Do they look at what it would 'really' cost to sell the house before coming to a sum?

Thanks in advance
#2607 In theory, yes, that's exactly how it works and there should be some element of negotiation - in practice I am finding it a bit more complicated as I am now dealt with by a Trustee rather than the OR.

Please let me know how you get on and what other information you find !

Good Luck !
By keepchinup
#2608 Hi,

My OR absolutely 100% NOT interested in negotiation. Take value of property less mortgage, and he wants 50% of that figure. No messing. No negotiation. No arguments about what the fees would be, etc. Then again, it was worth paying the whole lot to know the house was safe.

I hope your OR takes a different line!
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By JaneClack
#2643 You can never second guess the OR but getting it done asap will be the best... as you can see all of our posters re this for the bankruptcies from April may have had a few sticky moments but have always come to a happy resolution.
By Bayroo
#3270 I share and own my house with my m8. If after deducting the mortgage there was 15k equity in the property. Giving us each 7.5k.

If I wanted to go down the road of the big B. But sold my share to my parents for 7.5k before I did. Would the house then be excluded from my assets as my parents now own my share?

Sorry to keep on.

#3272 Very very basically, YES, aklthough you should get at least one paid for valuation to support your actions otherwise the OR has the right to overturn the transaction retrospectively.
By Bayroo
#3274 OK! Thanks for that.

So if I went and got 3 different estate agents reports, that should be good enough.
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By JaneClack
#3276 Ah, we're thinking of bankruptcy again now, are we, Bayroo? Can you see why it pays to take your time before rushing into anything.

If your parents can buy the beneficial interest it would be by far your best money advice. It will have the same effect on your credit rating as an IVA would and any income payments arrangement would last for 3 and not five years! Just ensure you have at least two and preferably three valuations.

Hope it goes well and let us know what you decide to do but think about it!!!
#3282 My understanding from the OR / Trustee dealing with my similar situation is that an Estate Agents valuation is no longer acceptable. Whilst I appreciate that ORs can vary from area to area, it would seem foolish to jeopardise a posibly good arrangement by taking short cuts with a valuation.
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By JaneClack
#3283 You may well be right, Vanessa and I usually advise people to do the buying of the beneficial interest in bankruptcy as the OR has its own conveyancing department anyway and can therefore not query the valuations. Some of my colleagues say there is no difference.

It would not hurt to have an estate agent or two's valuation first - they cost nothing and Bayroo would have an idea of what the equity is. If he is not sure he is going ahead with bankruptcy it does seem to be a waste of money for a paid one straight away - if on the results of these it seems a feasible option for his parents to buy out the beneficial interest he could then go for a paid valuation that the OR cannot dispute.
By Bayroo
#3296 Thanks peeps! This site is great for advice.

I have been thinking about it all day, what to do!

My debts total around 58K, nothing to show for it. Not watching a 42” plasma TV or driving around in a BMW. Just someone tempted by credit to live really!

I take home around £1400 a month, £500 on my half of the bills, if I didn’t need to eat and just paid my credit card and loan bills, I would still need £140 to pay them! (What a pickle!)

I don’t think I can stomach an IVA, paying 100% surplus into it, hoping that nothing goes wrong within the 5 years and then not being able to pay the correct amount, and being forced in Bankruptcy.

Other than the small amount if equity in my house, I have nothing else, I am lucky and drive around in a company car. Spoke to me dad last night, he said he would help me with what ever I wanted to do, he doesn’t judge me, I’m more disappointed in myself than he is with me, feel like I have let everyone down.

I may just ask him to buy my share of the house. And then go for the big B!

Like so many others on here, I don’t think I could deal with the creditors phoning all the time and dreading the sight of the postman!

I could be home dry after 6 months, debt free and able to live life within my means, and not having one single bill coming through the door in the way of credit.