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In Bankruptcy – Evicted From Property — 1 Comment

  1. Afterthought:

    This seems to be a great way of making money when there is in theory non available.

    Somebody tell me that I am wrong in what I am about to write?

    In this particular case the property was solely owned by the person going bankrupt. If this is the case then the trustee will make an entry at the Land Registry Office for a restriction order. A restriction is placed automatically when a bankruptcy order is made and this means that the bankrupt is no longer the legal owner of the property and therefore no longer has the right to sell it. It is only the trustee that can now sell the property.

    The trustee now has the power to evict the once property owner! The trustee can now place the property on the open market for sale. My understanding is that they have to ensure that the property is fairly marketed for a period of no less than 30 days. After this time the price can be reduced for a quick sale.

    Obviously the mortgage company will not be receiving any mortgage payments after the eviction faze. Of course the trustee will negotiate with the mortgage company to sell at the best possible price. He would also inform the mortgage company of his fees for doing this.

    I get the feeling that the mortgage company has very little option, unless it wants to make more losses, than to accept the proposal made by the trustee.

    So the end result is:

    Trustee – makes a tidy £7500 from the sale, of course highlighting that they made a loss because they were due £13,000.

    Official Receiver – remuneration of £1,300

    Mortgage Company – I don’t pretend to understand the tax system, but I have been told that they will not suffer because of this loss.

    If I am wrong about the above, please feel free to shoot me down.

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