What happens if mortgage holder goes bankrupt and joint owner has disappeared?
- Thread starter michaelg
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Brendan Burgess
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If Mary goes bankrupt her loans disappear and she loses ownership of her assets.
Johnny Joint Owner continues to be liable in full for the mortgage.
In practice, if Mary wants to stay in the house and continues paying the mortgage, the lender might not take any action, but the property is vested in the Official Assignee and Johnny. The Official Assignee will usually be ok with her paying the mortgage as long as the house is suitable for her needs.
If Mary wants to vacate the house, she can do so. The lender will seek an order for possession which will be slow because they will have to try to trace Johnny to serve papers on him.
So do you know what Mary wants to do?
This is not correct.
Brendan
Johnny Joint Owner continues to be liable in full for the mortgage.
In practice, if Mary wants to stay in the house and continues paying the mortgage, the lender might not take any action, but the property is vested in the Official Assignee and Johnny. The Official Assignee will usually be ok with her paying the mortgage as long as the house is suitable for her needs.
If Mary wants to vacate the house, she can do so. The lender will seek an order for possession which will be slow because they will have to try to trace Johnny to serve papers on him.
So do you know what Mary wants to do?
This is not correct.
Brendan
Many thanks Brendan
So in effect Mary would be paying the mortgage for Johnny but at least has a roof over her head.
How slow is slow if the lender cannot trace Johnny ? Would the OA try to trace him as well ?
Mary has not decided yet, just looking at her options.
So in
So in effect Mary would be paying the mortgage for Johnny but at least has a roof over her head.
How slow is slow if the lender cannot trace Johnny ? Would the OA try to trace him as well ?
Mary has not decided yet, just looking at her options.
So in
Brendan Burgess
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Mary is paying Johnny's mortgage anyway, so the bankruptcy makes no difference.
In most cases I have seen, the mortgage repayments are much less than the cost of renting an equivalent house, so it's not "unfair" as such.
It can take years to repossess a house. I have only seen a few cases involving bankrupts but the court seemed to treat them normally which I thought was very odd.
The OA would have no interest at all in Johnny.
Brendan
In most cases I have seen, the mortgage repayments are much less than the cost of renting an equivalent house, so it's not "unfair" as such.
It can take years to repossess a house. I have only seen a few cases involving bankrupts but the court seemed to treat them normally which I thought was very odd.
The OA would have no interest at all in Johnny.
Brendan
Brendan Burgess
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Yes. Many of the attempts at repossession we saw in the courts were for empty houses.
Brendan
Brendan
Brendan Burgess
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Hi Michael
They can only send in receivers to investment properties and not on family homes.
The lenders often say that they can't find the owners in which cases they are told to renew their efforts or apply for what is known as "substitute service"
Here is an extract from my report on a trip to Donegal in 2015
There were almost 200 cases and no possession order was granted.
Case 1
Bank sought an order
In March, no one appeared. No recent contact from borrower.
The property is vacant. No appearance has been entered.
Registrar: Where are they residing
Solicitor: I don’t know
November 2014 we got a sub service order
Registrar: These are all photocopies
November 2005 Borrowed €157k over 35 years
February 2012 Defaulted
Last payment 25 March 2013
€159k now due.
€14k arrears
Affidavit on CCMA – not complying
Registrar: last statement is August 2012 – is there a subsequent statement?
Yes, but it’s not attached to an affidavit.
It must be, so Adjourned
Case 2
In July 2014 got an order for sub service
14 April letter and 22 June
Reg: Are they living there
Solr: They live outside the jurisdiction and have sent back the keys
Reg: When did they move outside the jurisdiction ?
Solr: Don’t know
Reg: Was it a pPR?
Solr: Yes
Last payment 20 Jan 2012 for €50 ( monthly repayment due was €1,300)
€300k balance with €85k arrears
Reg: When was last contact
Solr: Numerous attempts were made but none was successful.
REg: When were the keys returned?
Solr: I don’t know
Reg: I need to know that
REg: Were they any negotiations?
Solr: I don’t think so
Reg: I am concerned that there has been no engagement. How long has the property been unoccupied?
Solicior: I think it may be better to adjourn than to waste the court’s time.
Reg: You want me to adjourn?
Solicitor : On that basis, A property is vacant, I am concerned. Could we have short adjournment?
Reg: What would that achieve? Best to hear it in full in October
Reg: The folio is from 2006. I would want a more recent one.
They can only send in receivers to investment properties and not on family homes.
The lenders often say that they can't find the owners in which cases they are told to renew their efforts or apply for what is known as "substitute service"
Here is an extract from my report on a trip to Donegal in 2015
There were almost 200 cases and no possession order was granted.
Case 1
Bank sought an order
In March, no one appeared. No recent contact from borrower.
The property is vacant. No appearance has been entered.
Registrar: Where are they residing
Solicitor: I don’t know
November 2014 we got a sub service order
Registrar: These are all photocopies
November 2005 Borrowed €157k over 35 years
February 2012 Defaulted
Last payment 25 March 2013
€159k now due.
€14k arrears
Affidavit on CCMA – not complying
Registrar: last statement is August 2012 – is there a subsequent statement?
Yes, but it’s not attached to an affidavit.
It must be, so Adjourned
Case 2
In July 2014 got an order for sub service
14 April letter and 22 June
Reg: Are they living there
Solr: They live outside the jurisdiction and have sent back the keys
Reg: When did they move outside the jurisdiction ?
Solr: Don’t know
Reg: Was it a pPR?
Solr: Yes
Last payment 20 Jan 2012 for €50 ( monthly repayment due was €1,300)
€300k balance with €85k arrears
Reg: When was last contact
Solr: Numerous attempts were made but none was successful.
REg: When were the keys returned?
Solr: I don’t know
Reg: I need to know that
REg: Were they any negotiations?
Solr: I don’t think so
Reg: I am concerned that there has been no engagement. How long has the property been unoccupied?
Solicior: I think it may be better to adjourn than to waste the court’s time.
Reg: You want me to adjourn?
Solicitor : On that basis, A property is vacant, I am concerned. Could we have short adjournment?
Reg: What would that achieve? Best to hear it in full in October
Reg: The folio is from 2006. I would want a more recent one.
Thanks Brendan, interesting reading.
If the lender cannot find the borrower, does that mean at some point after a few years the debt legally disappears ?
On a separate note, A friend told me that his lender ( a vulture fund) tried on 2 separate occasions to send in a receiver on his family home, It took a solicitor to get them to back down. Was the vulture lender just chancing their arms ?
If the lender cannot find the borrower, does that mean at some point after a few years the debt legally disappears ?
On a separate note, A friend told me that his lender ( a vulture fund) tried on 2 separate occasions to send in a receiver on his family home, It took a solicitor to get them to back down. Was the vulture lender just chancing their arms ?
Brendan Burgess
Founder
- Messages
- 52,048
No. They can usually get permission for substitute service from the court. For example, they pin a notice on the front door with the legal proceedings.
But different courts take different approaches.
In the end, the lender will get an order. If the lender and their legal team are well organised, and this is extremely rare, they could get an order inside a year. But usually, they mess around for years.
Brendan