The products, which cover from light to heavy adverse, include a choice of two- and three-year fixed rates starting from 5.89 per cent. All pricing is based on Bank Base Rate and mortgages are available up to 90 per cent loan-to-value (LTV) on both a full status and self-cert basis.
Bankruptcies are on the increase in the UK with 47,000 bankruptcies being registered in 2005, 31 per cent more than in 2004. The number increased again in the first quarter of 2006, with 15,389 bankruptcies, 12 per cent higher than the previous quarter and 51 per cent higher than the same period last year. Bankruptcy orders can either be made by a debtor if they are declaring themselves bankrupt, or by a creditor if a company is owed money. In the case of creditor bankruptcy, a bankrupt individual can apply for the order to be annulled if they can prove they no longer have any outstanding debts.
To have a bankruptcy order annulled a specialist company assesses whether an annulment is feasible, by analysing the bankrupts’ level of debt and the amount of equity in their property. If sufficient equity is available to cover the debts a re-mortgage application is prepared and bridging finance is arranged to enable the outstanding debts to be redeemed, following which a court hearing is arranged to annul the bankruptcy order. As soon as the order has been wiped from the applicant’s record, the mortgage application is completed and the bridging finance is repaid.
Jeff Sutherland-Kay, speaking on behalf of Spectrum, said: “Bankruptcy orders can result in an individual’s debts increasing two or even threefold due to Government taxes and the fees and charges imposed by insolvency practitioners and the official receiver. When a home has to be sold, there are estate agents fees, legal fees and other charge as well of course.
“If an individual has sufficient equity in their home, it makes far more sense to use it to repay their outstanding debts and have the bankruptcy order wiped from their credit record. Not only does the individual not have to lose their home, but they also avoid being classified as a bankrupt and therefore have a quicker route back to prime lending rates. This is an excellent example of a win/win mortgage deal.”
