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anotherUserSeekingAdvice
Starting Member
United Kingdom
3 Posts |
 Posted - 17 July 2009 : 21:40:08
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Hi
I have a legal charge of registered estate on my brothers house (only his name is on the deeds) and I have since found out that he owes large sums of money (unsecured loans) to 4 or 5 credit companies.
I am concerned as to just how safe my share of the property is. If any of his creditors put their own charge order on the house, does their order get paid before mine ? or is it on a first come, first served basis after the mortgage lender has received their share.
What happens if he declares himself bankrupt ? Will I lose my 25% share of the property entirely to his creditors or will my share be paid in full first, before his creditors as I am the first to have a claim on the property in the event of a sale.
Any advice much appreciated |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 17 July 2009 : 22:16:42
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Hi
if you have a legal charge on the property then it is on a first come first served basis.
A creditor may decide to challenge the legallity of your charge if they beoeve that the charge was "created" in order to protect assets.
Youe brother may decide that it is worth speaking to a prodessional BEFORE it all gets out of hand. There are several soutions to debt - several not very well known or understood.
What is guaranteed is the longer one leaves the problem the fewer choices you have and the bigger the hurdle to jump
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
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anotherUserSeekingAdvice
Starting Member
United Kingdom
3 Posts |
Posted - 17 July 2009 : 22:27:09
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Hi, and thanks for the info.
Both me and my brother originally inherited the house over 2.5 years ago, with a 50/50 share. At the time of receiving the inheritence, my brother bought 25% of my share, and a solicitor put a legal charge of registered estate (CH1) against the property in order to state my 25% remaining interest in the event of a sale. With the current housing market the way it is, Im looking at renting the property in order to recoup recent refurbishment expenditure which Ive paid for, and the last thing I want to do is sign up to some rental agreement with a tenant and one of my brothers 3rd party creditors decides to pursue legal action to stake a claim in the property etc.
Currently, with what is oustanding on my brothers mortgage and what the house is valued at, there isnt enough equity to pay my minimum share of 17K (or 25% whichever is the greater at the time of sale), so if a pecking order exists, regardless of whether my brother declares himself bankrupt or not, then there will definately be no funds available for his creditors to stake a claim. |
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anotherUserSeekingAdvice
Starting Member
United Kingdom
3 Posts |
Posted - 23 August 2009 : 22:42:04
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Here is an update on this situaton:
1 of my brothers creditors has already issued in interim charge order (for 11K) on the property and a court date has been set for a hearing as to whether the charge should be finalised or not.
Ive been sent notification from his creditors solicitors, who have said that I dont need to respond to their letter unless I intend of going to the hearing.
I understand my brother can object to the 2nd charge being made and perhaps I could too if I felt the charge would put my interest at a disadvantage, although Ive heard there is a pecking order when it comes to paying charging orders, so I would get paid after the mortgage has been paid as Ive got the 2nd charge.
However, there isnt enough equity in the property to cover my charging order let alone further orders.
Current house value = 70K. Mortgage gets paid off first (55K) = 15K
Im left with a 2K short fall.
What would happen if my brother declared himself bankrupt -
Would the official receiver would take the property as an asset, and any equity would then be shared fairly amongst creditors?
My question is, just how fairly would the equity get shared ?
Im owed 17K, one of his creditors is owed 11K and another creditor is owed 1.4K (but the 3rd creditor hasnt got as far as putting an interim charge on the property, yet - they could do in due course, only time will tell)
Would the distribution be as a proportionate % or split 50/50, ie. myself and the 2nd creditor get 7.5K each ?
If, the outcome at the court hearing was that the charge isnt granted, could his creditor force him to go bankrupt ? If so, how would my charging order be affected ?
Can my brother object to the Interim Charge Order that his creditor has placed with the land registry, by calling the lang registry and simply stating the reasons why he objects ?
Will the interim charge order prevent sale of the property before the court hearing ?
Any advice much appreciated as Im really at loose ends with all this. The stress its causing to me and my partner is getting unbearable. |
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RHB
Senior Member
1159 Posts |
Posted - 24 August 2009 : 08:20:23
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I suppose worse case scenario is you are out of pocket by 17,000. BUT, I would talk to the solicitor that put the charge on, they should know the legal position.
As to someone else pputting a charge on the property, it doesn't sound as though that will effect you. |
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HiI have a legal charge of registered estate
