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Topic starter
04/01/2012 11:31 pm
can anyone tell me why arrears on a mortgage may need to be cleared prior to applying for bankruptcy.
My advisor and a fellow landlord's advisor differ on this point. She has been told arrears have to be non-existant at the outset and 'iP fees for the equity' need to be paid upfront to ensure the property isn't sold. Affordable payments then pay the IP fees throughout a 3 year period.
04/01/2012 11:46 pm
Hi pamjo
They dont.
Interesting point on paying equity up front as im not sure exactly how this would be possible. Ive never know this to be suggested or requested and its certainly not in the guidance or legislation.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
05/01/2012 7:49 am
Thanks Mark - My thoughts were surely if funds were available to pay this, creditors could be paid, avoiding need for bankruptcy!
Topic starter
15/01/2012 6:36 pm
Hi Mark-I might have caused crossed wires there-It was the fee for the interest in the equity, (if any existed) which was referred to as needing to be paid by a 3rd party at the outset. You and others have said that it is variable how much and in what timescale that's expected.
In this regard, when a property with a sum of arrears enters a bankruptcy/trust deed, the IP would presumably not be paid to discharge the interest in current or eventual equity.
16/01/2012 10:03 am
Hi Pamjo,
I'm a little unclear what you mean.
I think you are refering to the oft-quoted "£500 to protect the equity" but specifically in connection to a property with mortgage arrears?
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
16/01/2012 1:01 pm
Exactly TDA-Iunderstand better now about the fee for having a trustee discharge their interest in a property with negative or little equity. I was recently told that arrears had to be paid before entering bankruptcy. Maybe this was just where the property was to be kept as opposed to being handed back to the lender and any assumed shortfall plus arrears added to a PTD or Bankruptcy.
So...
A property with current equity=equity amount to be paid in at some point by somebody
No equity or negative equity-IP fee to relinquish the interest in the property, can be arranged at the start but flexibility in timing of payments over the duration of the PTD/Bankruptcy or extension.
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Property with arrears-IP cannot be paid to relinquish interest in it?
