going bankrupt later on this year

[wholesaler]

Help,
I will be going bankrupt later on this year, I have a secured loan with kensington
which I have had for approx 15mths and always paid to date, When I go bankrupt I,m hoping to re-purchase the equity from the OR via the receiver via a friend. My current situtaion is that i.m on incapacity benefit and was self employed so at present on benefits I spoke to Kensington and they offerred to reduce my monthly payment by £450p/m to £50p/m and I would go into 1mths arrears in 5wks I asked for a payment holiday which they don't offer.
My concern is when I go bankrupt it has been mentioned to me to cancel ddm anyway so the equity is less and then the friend comes in to pay the equity amount and I can then keep the house, but will the secured loan company and mortgage company refuse this as I have missed a recent payment or 2

Advice would be very helpful

[MelanieGiles]

Hi wholesaler and welcome to the forum

If you don't pay the secured lenders, your property will get repossessed. A secured lender can apply for possession as soon as you have missed three or more payments. so your suggestion to not pay to keep the property would work so long as you did not miss more than two payments. Personally, if you can afford to keep paying, I would do so, as the banks will only chase you if you don't.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[wholesaler]

Hello Melanie,
Thank you for your reply,
I have a short term issue as currently not in work and on Incapacity benefit so to pay my secured loan for the next 2 mths is nearly impossible, but I will re-start self emplyment in another line in 2 mths and then go Bankrupt in say 4-5mths time so I intend to start repaying my secured loan in 2-3mths and then discuss with the OR re
paying for the equity via a family friend
My concern is whether Kensington may refuse and force the sale as I had missed a couple of payments or is this something they can't do as long as I don't miss 3 payments or under BR they can still force the sale regardless

please advise
As i can approach family friend now which I don't want to do as I would rather have smaller equity to approach him with at the time of BR.

Thanks
Paul

[MelanieGiles]

The secured lender can only force a sale if they have a possession order and under the Law of Property Act 1925 you have to be three payments in default.

You are playing a dangerous juggle at the moment, but are aware of the consequences, and let's face it if you have no income you cannot pay in any case.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[wholesaler]

thank you Melanie,
I suppose my main concern was if I go bankrupt in a position of missing 2 payment or none would have any bearing on Kensington not allowing me to stay in my house if I pay the equity, but it seems as though unless I miss 3 payments and they get a procession order
they can't do anything is that correct ?
Also with the OR do I have to prove I can pay the mortgage and secured loan to be able to continue to live in the home?
Also I have a payment holdiay on my mortgage with Nationwide which they agreed before I went off sick but I was supposed to tell them if I change employment which i haven't done for obvious reasons do you forsee any probelms with that?

Thank you for your time in advance

Paul

[MelanieGiles]

Correct. The OR will not be too bothered whether you pay your mortgage or not, but make sure you tell them the reasons why you have stopped making the payments. From what you say, the possession proceedings will likely precede the bankruptcy order in any case.

If Nationawide have offered you a payment holiday, then you should not need to tell them you are off work sick, but check the terms of your agreement with them to be sure.