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[Mopsey2]

I live in Scotland and my husband and I went through Sequestration at the end of last year. I have a joint mortgage with my husband. Our property is about £15000 in negative equity and we have been advised that we can buy back the interest on our property by paying £515 each. My mortgage company have not yet confirmed the amount of my mortgage and whether or not it is in negative equity. Do I need to pay this as i am being discharged on 1st december and the chance of me being back in positive equity in next two years and three months is extremely slim. Could you advise us please

[Hayden]

Hi Mopsey2

I assume that the rules regarding buying back the beneficial interest in your property after bankruptcy are the same in Scotland as they are in England. That is if your property is in negative equity you can buy the interest back for £1000 + costs (I assume this is where the 2 x £515 comes from).

You do not have to do this immediately. In fact if you wait for three years from the date of your bankruptcy and the property is still in negative equity (it is revalued after 2 years an 3 months) then the Trustee will simply give the beneficial interest back to you for nothing. However if you think property prices will go up and there could be equity in the property after 3 years then ultimately the cost of buying back your interest will be the amount of equity at that time. In this situation it might be prudent to pay the £1000 now rather than risk having to pay more later.

[Geraldine]

Hello Mopsey2. I believe Hayden is right. If the property is still in negative equity then you can buy back the beneficial interest from your Trustee for £1000 at any time. However if you think the property will remain in negative equity for the next 2 years (3 years from the date of your bankru-ptcy starting) then there is no need to do this as after that the property will just be given back to you if it is still in negative equity.

The best thing to do is get confirmation of your outstanding mortgage from your mortgage company and a quick sale valuation from a local estate agent now. You can then calculate the extent of the negative equity and make a decision from there.