Hi! I suffered with very poor health due to a brain tumour and really struggled, and was was subsequently made bankrupt in 2011, discharged in 2012. 2 charging orders were placed on my property prior to the bankruptcy. Unfortunately, my tumour has had regrowth, and I have been struggling again. There is a possession hearing on the 10th April, which has been brought by the leaseholders for my ground rent. Although I have kept my financial affairs in order since my bankruptcy, the lease holder has not accepted my ground rent payment each year when I try and make it, as they say I had to pay the invoice for the 2 years which were included as bankruptcy debts as well. I have been told by the Official Receiver that I am not able to do this, and the leaseholder has gone direct to the mortgage company to ask them to pay directly, but after the mortgage company spoke with the Official Receiver, they were advised that it was a valid bankruptcy debt and was not to be paid. However, the possession claim makes no reference to the prior debts they were trying to force payment for, it actually says that "the claimant acknowledges that it is not entitled to order for payment of the rent arrears incurred prior to the date of bankruptcy since they are a debt provable by bankruptcy". That said, they have claimed 5 lots of £126 (the annual ground rent), and 2 of the invoices are for periods which I was bankrupt, even though their claim acknowledges that they have no right to claim. They have also claimed over £2200 in legal fees, despite not sending invoices, chasing the debts, or sending any legal documentation other than the paperwork for the possession hearing, and ignoring my annual attempts to pay (done verbally and by email), and the repeated communication from the mortgage lender. I just wanted to clarify : 1. Whether they do indeed have a legitimate claim for the periods which I was bankrupt, despite their acknowledgement that they are not entitled to order for those debts 2. Are they able to add their legal fees that they accrued prior to bankruptcy on A buyer has offered to buy the house at the cost of the outstanding mortgage, which would enable me to move back with my parents and not have the pressure of the mortgage hanging over me. It means I can do things quickly, without the hassle and stress of putting the house on the general market, and get on with preparing for my next surgery, but it means that there would be no equity to pay the charging orders (both were absolutely not legitimate debts, but as I was suffering at the time, I didn't know what was going on until much too late to ask for them to be set aside). Is it possible to allow the buyer to purchase the house? What about the charging orders?
I bought the property back from the Trustee from the bankruptcy estate in mid 2014 thinking that my health had improved, but things have clearly not gone to plan health wise.
Any help would be gratefully received as the stress of everything is making me even more ill than I need to be, and I'd give anything just to have no stress at the moment.
They are saying that I am in beach of the terms of my ground rent lease in that I have failed to pay the ground rent :
Hang on, just getting the amounts and dates
£126 for 1/5/10-30/4/11, £126 for 1/5/11-30/4/12, £126 for 1/5/12-30/4/13, £126 for 1/5/13-30/4/14, £126 for 1/5/14-30/4/15. They have included the first 2, but as I was made bankrupt in October 20111, the first 2 invoices were included in the bankruptcy. I have had no invoices for the other 3, but call and email them on the 1st March each year to try and pay, and they refuse my payment.
Ok - well they are wrong. If they have been INCLUDED in the bankruptcy then the creditor can not pursue them.
This means that they can not seek to throw you out and claim possession.
The debts are not secured therefore they can not take possession proceedings
I'm trying to attach the image of the paperwork so you can see.
It is only where you have failed to pay after bankruptcy can they do anything
In any event if they have refused payment they can't throw you out for that, its their own making
I probably dont need to see the paperwork, but based on what you have said, they can not enforce the debts
As for the charges, you have to pay those off before the property is transferred.
Sadly a charge before bankruptcy makes the debt secure and therefore always remains
Thank you. They are not entitled to possession
Can I clarify anything for you about this today please?
Re the case, thank you, ***** ***** Re the charges, I'm not in a position to pay the charges, nor am I well enough to keep paying the mortgage indefinitely. The other option is allowing the mortgage lender to take possession, but that adds an extra dimension of stress.
I found this on MoneySupermarket :
April 2003 and afterwards
The Land Registration Act 2002 (LRA) and Land Registration Rules 2003 (LRR) introduced significant changes to land registration procedures. Cautions were no longer to be used. Instead when a creditor obtained a charging order against a debtor:
If the property was solely owned by the debtor, or all owners of the property were debtors, for example husband and wife owning the property jointly and being joint debtors, then an ‘agreed
notice’ was to be filed at the Land Registry by the creditor. Effectively this was almost as good as
having a mortgage. The debtor could not realistically sell the property without repaying the debt to the creditor.
However, if the property was jointly owned by the debtor with other nondebtors, for example husband and wife owning the property and only one of them being the actual debtor, the creditor was not entitled to enter an agreed notice. Instead the creditor could only file a ‘restriction’ at the Land Registry in the
following terms: “No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to creditor...] being the person with the benefit of an interim/final charging order on the beneficial interest of [name of... debtor].”
This restriction was, and remains, practically useless.
The effect of the restriction
The debtor and his joint owner’s freedom to sell the property is not affected by such a restriction. They could sell the property as if there was no charging order against the debtor. All that was required was that the new buyers or their solicitor write to the creditor informing them that they now owned the property and then confirm to the Land Registry that they had given that notice. Then the buyers could register the property with no further complications. The creditor, who is sitting back, waiting to get paid, instead just receives a letter confirming that a sale has already taken place, typically a week or two after
the sale so there is little they can do to get the debt paid. In theory the creditor could apply for a freezing order against the debtor to try and obtain the cash from the sale proceeds. However, most creditors will
never make such an application:
The cost of applying for such a freezing order would run into thousands of pounds.
The debtor might have spent the cash from the sale of the property before the freezing order was obtained, so there is little, if anything, for the freezing order to bite on.
What is your take on this? Although I wouldn't be getting any equity, it would offload a problem, and leave me free to have a mortgage again at some point in the future rather than allow the lender to take possession (they haven't threatened this by the way, I am up to date with payments, I just know that last time I had brain surgery I was in bed for 7 months and would just like to offload my property.
The problem is the remaining restrictions. They need to be discharged, generally by consent to allow you to sell. Whoever takes it on will want it free of restrictions
How would I obtain consent?
If the property is returned to the lender, they wouldn't get anything either.
It's this part of the article that is pertinent :
The creditor, who is sitting back, waiting to get paid, instead just receives a letter confirming that a sale has already taken place, typically a week or two after
So if the lender has the property how can you sell it?
No, I've not been clear. I was asking why I can't let the buyer have it for the outstanding mortgage value, because the above article says that the charge holder can in effect do nothing. I was asking why I shouldn't do that, as if I allow the mortgage lender to take possession, they would get nothing either. If someone bought the house for the outstanding mortgage value, at least my financials would not be blemished again, and I would be able to have a mortgage again at some point.
They can stop you selling or transferring the property.
It wont cost thousands, £155 to list the application to be exact.
But the article says that the house sale would have completed a couple of weeks before they would even be notified.
Not necessarily. Any sensible Solicitor doing the work for the buyer would want the charges removed before the sale is completed, otherwise they may face a negligence action
So my only real option is to give the property to the mortgage lender? Or perhaps allow the leaseholder for the ground rent to take possession next Friday, even though their claim is unjust? I just don't think I can keep going with this on my shoulders whilst I'm recovering? Could I contact the charge holders and explain the situation?
Meaning that I could advise that it would be being returned to the mortgage lender.
Sadly yes I think you can only allow it back to the lender.
You can contact the charge company and explain
Does that help?
Just going back to the ground rent, can I just clarify that they have no legal right to charge the legal fees accrued prior to the bankruptcy either? Even if they didn't invoice it then?
Indeed. Any fees are included up to the point of bankruptcy.
In which case, thank you for your help. I really appreciate it! If there is any case law re the bankruptcy debts not being payable that I should mention when I attend court next Friday, please advise.
Yes I would certainly raise this.
Good luck with this.
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Thank you. If you could just advise if there is any case law I should quote, I'd appreciate it. Happy to rate this once I have that.
Just had the post, and Nationwide have sent every copy email they have sent the solicitors, so that proves my attempts to pay and the legal fees were prior to the bankruptcy.
Indeed. The only law is in relation to bankruptcy which is any debt included in bankruptcy cant be recovered afterwards
Perfect. Thank you.
Alex, I'm so sorry. I thought I pressed excellent, but good service came up, and I can't seem to amend it.