impreza_terzo3_no257

Hey guys,

Im stuck on this at the mo.
Basically my dad was made bankrupt and the inland revenue did this about 6 years ago, and now they want £30k of him. Now the only way he can pay them off is by re-mortaging, but no one will touch him, so he said to his solicitor to transfer the house into my name and i will get a mortageon the house. I have had a offer through from the morage company but my solicitor has advised i should take a indemity poilicy and the broker i have used has said they will check on my dad for bankrupcy and so on, and because he is bankrupt the chances of getting a mortage could be slim. Is this true? if i get this policy out will they check on my dad, and if they do can the company say no to giving me a mortage?

jay

Luan Pra bang

Its very hard to say without more details .But what you want should be possible provided you can arrange the transfer with the bank removing their title for a few days. The bank Removes their title, Usually at this point you have insurance for the bank against your dad's bankruptcy then you remortguage pay of the debt to the bank and its done. Once the title held by your dads mortgauge provider has been removed it should be no problem but getting them to remove that will be the issue and depends on your dads relationship with his bank. The only other option would be for you to buy the property but this will cost on stamp duty.

miff13

I assume the solicitor is not aware of the bankruptcy. As your dad wants to transfer the house to you (presumably for no financial consideration) this will be classed as a transfer at undervalue, and if you intend to take out a mortgage on the property the lender as part of it's standard instructions to the solicitor will require an Insolvency indemnity policy to cover itself in case you dad is made bankrupt in the next (five, I think years), this doesn't offer you any protection at all, it covers the lender. In order to take out the policy the solicitor will carry out a bankruptcy search which will show your dad's bankruptcy, and if they are not aware of his bankrupcty the lender will withdraw the mortgage offer. Even if that was missed (very unlikely), he would also be required to swear a statutory declaration of solvency (well he would were I work), and I would imagine the court will take a very dim view of him lying in a sworn oath.

I'm no expert on bankruptcy but I am a conveyancer, and I have a client at the moment who was declared bankrupt in Nov 2005, he was automatically discharged from bankrupcy after a year and is now able to get a mortgage. Are you sure your dad hasn't been discharged? I'm not at work a the moment so I can't check but I thought even under the old legislation you were discharged from bankruptcy after 5 years. If he has you can get a Certificate of Discharge from the court and he should then be able to get a mortgage somewhere (but he should be honest about his past).

Go and see a decent IFA and you and your dad should be honest and up front about your dad's past, otherwise it will come back and bite you on the ****.

Good luck.

Matt

3times

Not sure what broker you are using but I can get mortgages for bankrupts, even easier after 3 years when they are discharged.

I appreciate that there may be other reasons but based on your post I can't see a problem.

As already said, if he gives you the property you will have to pay stamp duty on the purchase price/open market value, whichever is the higher.

miff13

Few links below might help

When will my bankruptcy end

If your dad doesn't have a mortgage at present and the property is transferred to you for no financial consideration, no stamp duty is payable. If he has a mortgage and is transferring the whole house to you for no consideration then stamp duty is payable at 1% on the amount of his existing mortgage (nothing is payable if the mortgage is less than £125,000.), if he transfers half the house to you and has a mortgage then stamp duty is payable on half the value of the existing mortgage (if 50% of the existing mortgage is less than £125,000 no duty is payable).

Scope: What is chargeable

Hope this helps.

3times

helpfull links.

I was under the impression that all transfers of equity attracted stamp duty. Learn something new everyday. Thanks.

Luan Pra bang

You don't have to pay stamp duty for a love and affection transfer for no consideration.

{better late than never)

miff13

That's natural love and affection mind, not sure about the unnatural love mind!

impreza_terzo3_no257

Hey guys thanks very much for the advice.
Matt, in response to your reply my dad has declared everything and his solicitor is aware he is bankrupt along with the trustees of the other party because they are the ones that have made him bankrupt, the broker that we used also knows aswell because he tried to get my dad a re-mortage but it kept flagging up with the bankrupcy, and he was the one who advised that the best thing to do for getting out this mess is by transfering the house to me and i get the mortage out. When we went to see the broker he sorted the valuation inspector to come out and they valued the house at 125k. fair do's i said and i applied for 85K for a mortage and a gifted deposit from the old man. The broker then found a lender almost went through to the offer stage and it flagged up that my dad was bankrupt, and therefore wouldnt give me an offer, even though im not bankrupt myself. The broker then set about finding another lender within the same company and he found one, who sent me an offer i accepted under 2 conditions, i get a damp and timber report done and take out this frigging indemnity policy. After speaking the broker about this policy he said its a must and we must take the policy out, however the chance of the mortage completing has half'ed to 50% chance, because the policy will come up that the person you are buying from is bankrupt. I then argued with him saying that he knew all along that my dad was bankrupt because he tried to get the mortage for my dad and couldnt, and now hes coming to me telling me that theres only a 50% chance i can get a mortage. Ive now got to speak to my solicitor because he said he will do evrything he can to sort this mess out and get me the motage, but my hopes are fading and i dont really want to loose the house because thats the way its going.

any furthur advice?

impreza_terzo3_no257

Oh by the way my dad was made bankrupt 6 years ago shouldnt that of cleared by now?

miff13

Speak to the solicitor first, if they have a copy of the mortgage offer they can tell you whether it's any good for what you are intending to do.

If the trustee in bankrupcty has agreed to the sale, and some or all of the mortgage money is going to them to discharge all or part of your dad's debt, I don't see what the problem is. I don't see that the indemnity policy is going to happen, it only covers the possibility that someone might be made bankrupt in the future, and since your dad is already bankrupt, no insurance company is going to offer cover.

I suspect your best bet may be to speak to a decent independent financial advisor (not one tied to certain companies that you find in most estate agents offices, as most of them couldn't find their **** with both hands tied behind their backside), it's not that difficult to get a mortgage even if you have been bankrupt in the past. It will limit the number of lenders and your dad will pay a higher interest rate but it's possible.

I'm not sure on whether your dad will have been discharged from bankruptcy, I would have thought so as it's been 6 years. If you find out which court dealt with his bankruptcy and the date he was declared bankrupt (it will be on the bankruptcy order. If you don't have a copy ask the solicitor you are dealing with to request a copy from the trustee in bankruptcy) Ring the court and give them your dad's full name and the date of the bankrupcy and they will be able to tell you if he has been discharged, and if so when.

If you get nowhere pm me and I'll check at work and see what I can find out.

Matt

impreza_terzo3_no257

Matt,

thanks very much mate, and you are right the mortage is to pay the trustees off, and my dads solicitor has told the other party that a sale is going through and also they even have a copy of my mortage offer and they haven't said we cannot do this so they are ok with it becaus then they know for sure that we are going to pay.

Its also funny that when this all kicked off about a few months back my dad instructed his solicitor to go to the other party and offer them a certain amount below the 30k as the original ammount 6 years ago was 5k. evertime his solicitor went and made a offer they came back and declined. Something to do with equity in the house is so much that they have to ask the full amount, which really pissed us off.

I know for a fact that the broker has found a lender that will lend him for a second charge loan, how good is this product and what chances is there in getting one for my dad?

cheers