Author Topic: Buy to let failure  (Read 4603 times)

Imperialmint

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Buy to let failure
« on: Dec 21, 2019, 10:57:34 PM »
My husband and a family member purchased two buy to let properties in 2007.both are in serious negative equity and his relative who predominantly controlled the “business” has made herself bankrupt - she had massive personal debts and lives in rented accommodation. However we (husband and I)have a joint mortgage of our own with a large amount of equity and (we have been homeowners since 1997 and will have paid our mortgage off in 6 years. Both properties will have a shortfall and under J&S liability the outstanding amount will all fall to my husband to repay. This is likely to be around £120k.  I don’t want to risk losing our house if he goes bankrupt but I don’t see how at 53 and with an income of just over £2k a month he is going to be able to reach a figure for repayment of this debt. Would an IVA. E his best option even tho this will bring our house into the mix in year five (I doubt we would be able to draw down equity as he will have a bad credit record) and if he goes bankrupt I may not be able to raise the full amount the OR would require to buy his beneficial interest. I am very worried as it is like a ticking time bomb being held over my head and I haven’t done anything wrong but feel as though will be punished. If bankruptcy is the end result I will have to agree to the house been sold and just as I am about to retire will end up renting (albeit with a lump sum my share of the equity in the bank) but no security and no [size=100%]home to call my own.[/size]

Scrooge

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Re: Buy to let failure
« Reply #1 on: Feb 14, 2020, 12:32:12 AM »
If he's going to be liable for the debt on those 2 houses what are you waiting on? That's like sitting on a time bomb. Your house will be a problem under bankruptcy and in an IVA later down the line. Sell your house, remove the equity and RENT. When the time comes to pay the debt on the 2 other houses, pay it if you can afford to. If you can't pay it because you spent all the money taken from your own house what are they going to do? You can't get blood from a stone. It's not illegal. If you sell the house and spend the money then YOU declare bankruptcy, that would be deemed disposing of an asset to avoid repaying debts. However, if you don't declare bankruptcy you can do what you want with your house and the equity just now.


I wouldn't worry about renting. You'll have enough money to rent anywhere you want with the bonus of being able to move very easily if you get neighbours from hell next door. ;D

Obviously if you leave the money from your house equity sitting in your bank, you will eventually be sued for the debt on the other houses.
Hint nudge: don't leave the money sitting in your bank account.