Repossession of BTL property during IVA?

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kat66

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Post by kat66 » Mon Oct 27, 2008 6:32 am
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Hello,
can anyone advise me please?
What happens if a BTL property currently detailed in the IVA and in negative equity is repossessed during the term of the IVA because of tenants not paying rent leading to mortgage not being paid? What effect would it have on the IVA and what would happen to the deficit once the mortgage company sells the property?Does it become an unsecured debt and would it get a pay out from the IVA monthly payment which forms the dividend?

Would that mean an increase in the monthly payment?

Also the property is not one of the proposed properties in the IVA which would be valued and remortgaged if possible to release the equity in the fourth year, this would be from other BTL properties currently not in negative equity.

Thank you in advance for any advice, I am trying to put my mind at rest about any potential problems that may arise. All BTL mortgages are currently covered by the rental incomes.
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MelanieGiles

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Post by MelanieGiles » Mon Oct 27, 2008 9:02 am
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How was the property treated in the IVA, and was it in negative equity when the IVA was proposed? Did your IP circulate the mortgage company and make them aware that you were entering into an IVA?
Regards, Melanie Giles, Insolvency Practitioner
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kat66

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Post by kat66 » Mon Oct 27, 2008 9:17 am
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Hello Melanie,
thanks for replying. The property was in negative equity when IVA proposed. Does it make a difference if the IP didnt circulate the mortgage company? I am not sure if they were made aware of the IVA..

I Look forward to your reply
Thanks
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MelanieGiles

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Post by MelanieGiles » Mon Oct 27, 2008 10:15 am
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It might do Kat. There has been an interesting discussion on this point on the forum over the weekend, involving a few of us IPs with differing opinions, so I am actually taking legal advice on this at the moment. Hope to get back to you soon.
Regards, Melanie Giles, Insolvency Practitioner
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kat66

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Post by kat66 » Mon Oct 27, 2008 11:10 am
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Thanks Melanie,
I would be very interested in receiving the definitive answer. I dont want any surprises later on down the line !
Kind Regards
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MelanieGiles

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Post by MelanieGiles » Mon Oct 27, 2008 1:55 pm
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My lawyers are working on it as we speak - and I hope to be able to report something soon.
Regards, Melanie Giles, Insolvency Practitioner
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David Mond

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Post by David Mond » Tue Oct 28, 2008 3:13 pm
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Interesting - whilst we wait the advice from Melanies lawyers, if the IP did not circularise the mortgage company might be a case of negligence? Try and find out.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
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kat66

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Post by kat66 » Tue Oct 28, 2008 3:35 pm
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Hi David,
thanks for your input.Whilst waiting for the advice from Melanies lawyers would you be able to advise me on the impact on the IVA and what would happen re the deficit because of the negative equity if the buy to let mortgage companies were circulated at the time of the proposal.

Can you clarify what the term circulate means in simple terms

Many Thanks
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David Mond

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Post by David Mond » Tue Oct 28, 2008 3:38 pm
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Sorry "send out" so in this case sending a copy of the Proposal and all papers to the mortgage lender.
x
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
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kat66

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Post by kat66 » Thu Oct 30, 2008 7:42 pm
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Message for Melanie....
sorry to trouble you is there any news from your lawyers yet on the answer?
Many Thanks for all the time you are putting in
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MelanieGiles

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Post by MelanieGiles » Fri Oct 31, 2008 6:35 pm
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No - but they did say they would not be able to revert to me this week. I think Elizabeth is also checking with her lawyers, so she might have the clarification earlier.
Regards, Melanie Giles, Insolvency Practitioner
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kat66

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Post by kat66 » Wed Nov 05, 2008 8:30 pm
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David Mond wrote:

Sorry "send out" so in this case sending a copy of the Proposal and all papers to the mortgage lender.
x
Hi David,
yes the proposal was sent to all mortgage lenders
Thank you or your input,I look forward to your reply
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