Not suitable for IVA, some Bankruptcy questions

[MelanieGiles]

Matt

I am happy to have a go at a lower end dividend offer to HSBC, but would suggest we speak to them initially to see if they are amenable to this. Do you actually have HSBC as a creditor? If not, then I think and IVA could be workable, with a very low dividend. If the alternative is bankruptcy, there has to be a commercial argument to bring to creditors for you.

[matt.d]

Hi all,

Spoke to a lady at MG last night - we could just about offer 400pm but its not going to be enough - it was working out at under 25%.

I do have HSBC as a creditor unfortunately and they make up around 27%.

AlanO - I live in the London Borough of Redbridge, NE London/Essex border. We currently have a redmption penalty of 11K on our mortgage, its fixed for another 4.5 years - the penalty goes down with the fixed period, Ithink next year it'll be 9K, then 7K etc.

[AlanO]

Hi Matt,

So are you an IG,E or RM postcode - just want to check whether you are under the Southend OR which covers Romford County Court or more likely you will be covered by Bloomsbury St and the HCJ in Strand.

Both we have had dealings with.

On the redemption this is likely to work in your favour and assist an negotiation

Best however to get an expert to go through things in detail with you

All the best Alan

www.debtdr.co.uk

[matt.d]

IG postcode AlanO.

Obviously If we could take the redemption off, even without taking into account other sale costs, we'd reduce the cost of the BI significantly. I'm worried to start the process and then be met with a situation where they won't take it into account and we need to find someone with 10K+.

[matt.d]

Also, could I sell the BI prior to going bankrupt and take into account sale costs and redemption penalties to reduce the value? Or would this be frowned upon even if I can show a statement from the mortgage company showing the full payment value of the mortgage at this stage?

[Reviva UK]

Hi matt

as we discussed on the phone you are able to sell the BI prior to bankruptcy BUT you will need to do this at the full figure ( excluding redemption) otherwise the OR will view this as underhand and may overturn the sale.

I believe the best way forward would be to prepare carefully for Br as we discussed and then negotiate with the OR afterwards.

[matt.d]

Paul,

In your experience how do Mortgage companies receive people doing this sort of thing? I know theres not going to be any hard and fast rule but generally (selling the BI I mean)...

Would we be able to get a secured loan, to take up the amount of equity we potentially have, split this 50/50 between my wife and I. I would then use my half to pay off some of the more urgent creditors and she could use her half to buy the BI for a token fee and use the rest to clear some of her debt?

[zoe]

Am i missing something here or wont this be seen as selling assets to the detriment of creditors???

[Adam Davies]

Hi
I agree with Zoe,something doesn't seem right in using up the equity in the property.
Hope one of the bankruptcy experts can explain a bit more
Regards

[MelanieGiles]

The equity in the property needs to be valued, and divided up into the shares between both partners - usually 50/50. There is nothing to stop someone from re-mortgaging prior to bankruptcy to raise the value of their beneficial interest, so long as this is done at full market value, and that the non-insolvent spouse is prepared to fund the cost of the higher mortgage payments from their own disposable income.

[Reviva UK]

Melanie

you beat me to it.

Doing this before br does take away the guesswork and worry BUT you need to remember that the OR will want to see ALL of the documents and will be expecting the funds that are raised from the BI sale.

[Adam Davies]

Hi
Quote 'the OR...will be expecting the funds that are raised from the BI sale.'
This is the part that I couldn't see in the previous posts
Regards

[MelanieGiles]

Just a strange use of words perhaps!

[matt.d]

Thanks again for all the answers!

One more question...
One of my creditors wants to put a voluyntary charge on the property, the amount is for 9.5K. The effect would be that my equity would end up being worth next to nothing. It is a voluntary charge in exchange for accepting my reduced payments and not getting a CCJ. If I were to go with this would it be viewed by the OR as underhand? In essence the charge would actually benefit me in that the BI would be vastly reduced. Or would the charge just reduce the equity overall and the ramainder would still be halved to work out the cost of the BI?

[MelanieGiles]

No - you must not agree to this suggestion if you are seriously thinking of declaring yourself bankrupt as this will be seen to be both a preference in favour of this creditor and a disposition of assets to the detriment of the other creditors. These are issues that the OR will be able to turn around and you could find yourself ultimately with a Bankruptcy Restrictions Order as a result.