Hi

I am looking for some urgent advice please.

I was made Bankrupt in January this year and everything went as explained with the Official Receiver contacting all of my creditors and as instructed I have been making the Payment Agreement figure each month to the nominated company.

However, my problems/queries are with the property that I own and the mortgage company and a second company that I have a secured loan with. (I have stopped making all payments to these companies since entering bankruptcy)

Since entering Bankruptcy, I have heard nothing from the mortgage company but the Official Receiver has assured me that they are aware and that they are in communication with them as my interest in the property now vests with them under the terms of bankruptcy.

On the other hand, I am still having daily contact from the secured loan lender via telephone and letter. I have accepted that the property will be repossessed and told them to proceed with this. They would then have to share the property sale funds with the mortgage company who I understand would take their share first as the majority lender. The Official Receiver has also confirmed that if there was then any shortfall then this would be covered under my bankruptcy as 'contingent liability'.

I repeatedly told them of this and finally they issued proceedings to repossess the property. However, I am still getting letters and calls threatening to enforce the order of possession and confirmation increasing fees onto their balance which I suspect is the reasoning for this course of action.

Should I be doing anything else than the above or just wait for them to complete proceedings and then let the Official Receiver take care of any shortfall as instructed?

Thanks in advance!

Hi,

While I can understand your concerns, you are fine.

You can contact the OR to make them aware, and to discuss this, but again, as they are not the mortgage company, and come secondary to the mortgage company, any shortfall to them will be included in your bankruptcy.

It may just be their "matter of course" to contact you and follow through with their procedures. In all probability they will not seek repossession, as it will increase their costs, and eventual losses.

From what you have stated, you know all this, and I hope this confirms what you already know.

Regards,

Jon

Hi Jon

Thanks for looking at this for me, few more Q's I'm afraid!

The OR is aware of all of the above and have told me that they cannot give any advice apart from what you/I have confirmed already as it is still a secured debt at this stage. They would only become involved once the repossession goes through and if there was a shortfall.

The secondary secured lender has already been to a court hearing to issue a possession order (I did not attend and advised them of this as I was not contesting the order) and are now according to their last letter looking to enforce it. This is what I have asked them to do from the start but would of thought it would be the mortgage company taking this action as the main lender. I am assuming the secondary lender cannot do this without the mortgage lender knowing? Why would I not have heard from the mortgage company and why are they not leading the reposession?

If either does not repossess how would they get their money?

Many Thanks

Eliot

Eliot,

While I can understand your questions, there is really nothing to worry about.

Yes, as the loan is secured it is not a part of your bankruptcy until a repossession, sale and subsequent shortfall; which is then unsecured. But it doesn't matter who repossesses the property. If the secured loan company does so, the mortgage company is still senior on the land registry and deed to be paid. If the sale doesn't pay them in full, then there will be a shortfall to the mortgage company and the secured loan becomes unsecured. Either way, you are not responsible for the remaining debt as you are bankrupt.

Repossessing a property is a legal matter and can take time and there are no hard and fast rules that each mortgage company or secured loan company will do this or the other in a specific set time frame. Each company may have their own procedures they follow.

I hope this helps.

Regards,

Jon

Hi Jon, thanks again.
Much appreciated!