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hello, thanks for reading, my question is about a charging order that northern rock are trying to put on our house, court date is for october. we are currently with payplan, with a view to remortgaging in a couple of years and offering a full and final settlement on a debt of 112k. now that we may be getting a charging order on the house this looks unlikely, so we are seriously considering bankruptcy but my main concern is losing the house, mortgage owed is 153k, market value aprox 165k, charging order is for 32k, does this mean we would be in negative equity? or would we be made to sell up and give the proceeds to northern rock, which seems unfair on the other creditors when we would quite happily pay everyone off in the future when the house could've been remortgaged.

Once Nothern Rock have placed their second charge, you certainly will be in negative equity for remortgage purposes.

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Are you currently in a DMP and if so how much are you paying per month? Have you thought about whether an IVA would be a better option for you, given the level of your debt?

Your case is another example of how creditors are moving towards securing their position with the use of Charging Orders, and a further demonstration of the weakness of the DMP procedure in effecing a pro-rata return to all creditors. Once Northern Rock have the charge in place, they will still require you to make ongoing payments to them.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thanks for responding, yes we are in a DMP with Payplan only paying £100 per month as I was out of work at time of setting this up, have now secured a part time job which means we will be able to offer about £300 a month, not enough in my understanding to do an IVA unfortunately. The court date for the charging order is 12th Oct, my question is would we be better off changing the court to a local one, i understand there is a small fee for this, but considering fuel costs to get to newcastle this would be better for us, then we could go to the hearing ourselves. Also is it likely that the court will agree with the order as it seems unfair on other creditors? My husband and I have separated and if he went bankrupt I understand that any equity in the house would have to be halved (if at all there was any) would I then be responsible for the full amount of any joint loans?
thanks in advance for any advice

Hi
It is almost certain that the court will grant a charging order and yes you will be liable for joint loans if your husband went bankrupt.
How much are your unsecured debts once NR secure theirs ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Are you saying that there is no equity in this property?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

hi, my unsecured debts after northern rock secures theirs will be £80k. our joint mortgage is £153k so will be £185k combined with the secured loan of 32k. house value roughly 170-175k. with the northern rock loan being secured, would i then be able to do an IVA for the remaining 80k debt, if so how much a month roughly would this be?

I am just curious about the sense of a DMP which keeps you paying a very low amount on a monthly basis and waits for you to be able to remortgage in the future to clear debts of £112k. When you only have equity now of £17k. It just does not make sense!

If Northern Rock do secure against your property, then you will have not equity at all, and therefore no reason not to declare yourselves bankrupt. I imagine that Northern Rock will then do a deal with you to recieve ongoing payments based on your disposable income.

Do you have a Northern Rock Together mortgage product - and if so have you been continuing to pay the unsecured element with your mortgage payment?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Hi
On an 80k debt you will need to pay about £480 per month to provide a 25p dividend to your creditors.
Have a chat with a couple of companies that post on this site and see what they advise.
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

We had a together mortgage a few years ago, but when we moved last year we went with Natwest as Northern Rock wouldnt let us move the mortgage to the new property as husband is self employed. The house sold at a loss, so we didnt pay back the Northern Rock loan, and they doubled the interest rate.
If Northern Rock do secure this loan on the house, and we are in negative equity and we decided to go bankrupt, would we definately lose the house?
We are with Payplan and they have approached our creditors saying that we will increase our payments when i secure work, which i have just done, start job on 10th Sept(part-time) and also when the car payments have finished we will include this extra money.
I am just trying to decide the best option for us and my main priority is to keep the house, we have moved so much over the years(ex forces family)and one of my children has aspergers and found our last move so difficult, she is very settled now, dont get me wrong, if a council house was available in our village that would be fine, but there arnt any available, apparantly a wait of at least 2 years, and i really do not want the kids to change their schools again. As for renting, there are 3 bedrooms that come up now and again but with 4 children and pets, we would need an understanding landlord!

Hello,

Just reading through your post, and would like to offer some thoughts.

NR are a nightmare, I know from experience.

Do you have negative equity and can prove it through at least 3 local independant estate agents/valuers?

My understanding is that providing you pay the mortgage and are not behind with payments, I dont think you can be turfed out.

You may have to continue paying the charging order (if instructed by the c.order) each month to stop NR trying to secure the home, ie. its like another mortgage.

Do you have joint debts or or they in one name?

hello pm.e,
thanks for responding. We will only be in negative equity after the charging order is in place, so it makes more sense to go bankrupt after the charging order rather than before it i understand, less chance of the house being sold.
our main debts are joint, 2 x 30k loans. i have been fighting against going br because of losing the house but dont see any other way out of the mess we are in at the moment, worrying that a baliff will call any day, ive finally plucked up the courage to answer the phone now, i hid from it for a few months, but most of the creditors are usually fine once they hear we are with payplan.
thanks again for everyones responses.

Hi
You will need to take advice from an IP but once NR secure their unsecured loan and you are then in negative equity it would make sense to go bankrupt and then just continue to pay the mortgage and NR loan.
Would you be able to afford both of these ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Hi, yes our disposable income at present is around £200 per month, but will rise a few hundred as i have just started a job.