Insolvency Query re Charge over Land

[macksmum]

'Hi All
Had some great help on here last year so hopefully can help again please. My husband is a discharged bankrupt, there is a charge against my house of £100,000. He had bought a piece of land for £55,000 which has now been valued at £40,000. So becuase of negative equity he can put in offer of above £1,000, which we are going to do to the official receiver. However I have just found out that Lloyds have a charge against that as well, does that mean we have to pay them that? We were hoping to build on it to be able to get rid of the charge against my house. (Its something I am paranoid about as my son has special needs and when I die I want him to be able to have a flat in a reasonable area and not just put somewhere by the Council). So I need to make sure there will be enough money from sale of my house in the future. (Hopefully a long way away!) hope this is clear! Basically will they want that money still or as its been with the offical receiver does that charge go away?

Thanks in advance

 

[Lisa Thomas]

Hi

I am a little confused between the house, the land, which asset the LLoyds charge is against and which asset you are buying back the interest for from the OR.

Please can you clarify then I should be able to give you some guidance.

 

[macksmum]

Sorry, I am a bit confused myself. I put my house up as security for my husband's business and he bought a plot of land with a mortgage from Lloyds. When he went bankrupt, i had to fight to keep my house, and now pay a regular monthly amount (it will take my about a 100 years to pay off £100,000) the plot of land was £55,000 so when he went bankrupt 6 years ago, nothing was done with this land and no one contacted us so I made enquiries and eventually the OR got back saying they were geting a valuation they did and it was £40,000 so they wrote to us saying that we could put in an offer of over a £1000. We thought that would be great we could build on it over time and then pay off the charge on my house but then the OR sent me this today:

""I believe Lloyds Bank holds a secured charge against your property, so, until all the mortgage has been paid off, the charge will remain. Should you husband fail to keep up with the mortgage repayments, Lloyds Bank has the right to repossess the property and the piece of land" and :

"I’m glad Mr. Foley has rec’d my letter. I can confirm that based on the Land Registry search that was conducted previously, Lloyds Bank hold a secured charge and the Official Receiver registered the bankruptcy restrictions. Once the Official Receiver’s interest has been purchased, our solicitors will remove the restrictions from the land. So, from the day the restriction is removed, only Lloyds Bank will have a secured charge on the piece of land. I hope this answers your question."
Hope this makes it a bit clearer! Thank you so much for taking the time to read it.

 

[Lisa Thomas]

Hi

How much is the house worth?

How much are the mortgages/charges against it?

 

[macksmum]

My house is worth approx £280,000, with £100,000 secured against it and a mortgage of £147,000 xx

 

[UK Contractor Accountant]

So if am right lloyds are owed £100K (ignoring your home mortgage) and hold security in the sum of £140K.

Once you have relinquished the OR's interest in the land you would not need to repay the Lloyds mortgage until such time as the land/property is sold.

Of course, as stated, in post above if you do not keep up with mortgage repayments for the £100K Lloyds have the right to re-possess the land and/or call in the security on your house.

Your problems will come in trying to get planning permission to build and then finding some lender to provide development finance.

 

[macksmum]

Thank u very much for reply. I hadn't realised they had security on land as well don't know where we will go from here but I really appreciate your help x

 

[Lisa Thomas]

I presume your partner has no interest/equity in the property? His sole asset is the land, whch sounds like it is charged to Lloyds.

If/when the O.R's interest in the land has been purchased the charges will still remain and will need to be dealt with.

Happy to chat in more detail if you would like to call me.

01752 786800.

 

[macksmum]

That's correct, I would like to chat so will ring u later, am in work so will do it wen I finish, many thanks xx