shortfall of mortgage owing pre bankruptcy

[simon 3267]

Hi, Nram repossessed our house last Nov, we are now renting, they then sold it silly cheap, and now have landed us a shortfall bill of £91k!

there is no way we can ever pay this , so my wife has decided to go bankcrupt next week, ( only her as i went last year and fortunately Nram have said im down as insolvent and thus only chasing her)

My question is can the £91k def be including in the bankruptcy, and do judges ever refuse them?

Thanks in advance

[FlamingParrot]

Re: shortfall of mortgage owing pre bankruptcy

Hi, Nram repossessed our house last Nov, we are now renting, they then sold it silly cheap, and now have landed us a shortfall bill of £91k!

there is no way we can ever pay this , so my wife has decided to go bankcrupt next week, ( only her as i went last year and fortunately Nram have said im down as insolvent and thus only chasing her)

My question is can the £91k def be including in the bankruptcy, and do judges ever refuse them?

Thanks in advance

Yes, you should be able to include a mortgage shortfall, very few debts are excluded from bankruptcy, you may want to look at the Insolvency Service for reference: http://www.bis.gov.uk/insolvency/per...debts-included

What will happen if my secured debt is not paid in full after the sale of my property?
There will be what is known as ‘a shortfall’. This shortfall will become an unsecured debt in your bankruptcy.

You may also want to see this with regards to mortgage shortfalls: http://www.nationaldebtline.co.uk/en...age_shortfalls

As you say you went BR last year, you probably know all there is to know about the process, etc. but do feel free to post any questions you may have.

[scoobydoo]

Re: shortfall of mortgage owing pre bankruptcy

Out of interest did the mortgage lender let you try and sell the house before possession and did you have any offers? Unfortunately I dont think it will help your current predicament I am just wondering how the lenders are operating at the moment.

[simon 3267]

Re: shortfall of mortgage owing pre bankruptcy

Yes we were trying to sell for 2 years, but being a non-lending bank now!!! seeing as WE bailed them out, all they are interested in is getting back as much as they can!!

Very unreasonable and left me and my 5 kids homeless, Yes they sold it after knocking £90k off its worth

[PlanB]

Re: shortfall of mortgage owing pre bankruptcy

Hi, Nram repossessed our house last Nov, we are now renting, they then sold it silly cheap, and now have landed us a shortfall bill of £91k!

there is no way we can ever pay this , so my wife has decided to go bankcrupt next week, ( only her as i went last year and fortunately Nram have said im down as insolvent and thus only chasing her)

Since you are a BR the mortgage lender can no longer chase you for the shortfall and will continue to chase your wife for up to 12 years instead. You say she has decided to go BR next week but that is a massive step if this is her only debt (are there others?). If you're in rented accommodation and have no assets now that the house has been repossessed does she really need to go BR because the lender can't get blood out of a stone if she's not working. Is there really a hurry?

NRAM are facing a number of potential group action claims over selling repossessed properties at below market value (and other issues), and it may be worth your while waiting to see what becomes of all that before making up your mind.

Was this a Northern Rock Together product because there's a thread on here (I'll link it here tomorrow when I have more time) where some LB members are getting themselves into a group. Also did you read this about NRAM having to pay £270 million in compensation as a result of missold secured loans and mortgages and yours could be one:

http://www.bbc.co.uk/news/business-20679511

I would do more research before you do anything else

[PlanB]

Re: shortfall of mortgage owing pre bankruptcy

Very unreasonable and left me and my 5 kids homeless, Yes they sold it after knocking £90k off its worth

That's disgraceful! Have you considered a complaint to the Financial Ombudsman Service because they take a strong line on this issue. Here's a case where the lender was ordered to pay compensation to the borrower for selling below market value:

http://www.financial-ombudsman.org.u...ears.html#cs11

While the FOS investigate a case the lender will normally be asked to agree to put any further collection (of the shortfall) activity on hold. The NRAM loan isn't adding interest (so not increasing) which means the lender will not be disadvantaged or have a growing debt while they wait in line. Cases generally take a year to travel through the FOS sluggish system, and by then you'll have a better idea of the way forward

NRAM can whistle for their money if you ask me.