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Tim.jf
Starting Member
4 Posts |
 Posted - 16 March 2010 : 14:22:52
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| I was declared bankrupt last september because of £4500 claimed by one creditor, a business landlord who I refused to pay owing to a dispute. I am 62 and my wife has wholly owned our home ever since she bought it in 1992. It was paid for with the proceeds of sale from her house before we married. She has paid the mortgage ever since from her own bank account. We have separate incomes. I have no current account. Now the receiver's office is making ugly noises about me having a beneficial interest in the property. My feeling is that (a) it is not any asset of mine at all and (b) The forced sale of the house would be totally disproportionate to the amount owed. I own nothing else , drive a company car and am paid about £500 per month for my work. I have no prospect of any better gainful em,ployment due to my failing health and age. |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 16 March 2010 : 14:55:20
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Unfortunately, if you have lived in a property for a long time you would be considered to have a beneficial interest in it as you would have contributed to its' upkeep. This would be the case even if your name wasn't on the mortgage and your wife paid the mortgage herself.
Was the £4500 the only debt in your bankruptcy? |
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Tim.jf
Starting Member
4 Posts |
Posted - 16 March 2010 : 15:24:11
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The only debt I had at the date of bankruptcy was the business landlord for £4500 whic he claimed I owed on a finished lease in my personal name. His solicitor tried to stick me with costs for abandoning the new lease negotiations and leaving the premises. We were harrassed out early from the premises and the so called 'debt' consists of the rent, service charges and odd bits they dredged up from years earlier. It was easier to allow them to have me bankrupted than fight it. I am afraid that after eleven years of stick from this landlord, I had no stomach left for a fight and no money to fund one. I will be damned if I let them take my wifes house as well. This cannot be fair.
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 16 March 2010 : 15:35:43
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When you are bankrupt then the OR has complete control over your assets or any assets you have a beneficial interest (BI) in. In this case the house is being viewed as an asset that you have a BI in.
From what you have said it looks like one way or another you will end up having to pay the £4500 that you were declared BR for. This will either be taken from the equity within the property (in a worst case scenario you could be forced to sell the property to release the equity) or you will need to find the money to buy the equity from the OR.
Is there any way you could get hold of £4500? It is a lot smaller than most bankruptcy amounts and isn't worth possibly losing your wife's property over.
If the OR decides that you do have a BI in the property and you disagree you do have the option of going to court for a judge to decide the outcome. If you lose then you will have no choice but to pay the £4500 somehow even if this means selling the property to release the equity.
It seems a lot of worry/hassle to go through for what is a very small amount when it comes to bankruptcies. |
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Bridgewood
Junior Member
United Kingdom
222 Posts |
Posted - 16 March 2010 : 15:39:26
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Hi Tim
It is always a bit of a minefield when dealing with potential interests in property.
There are a lot of factors to take into account such as - how long you have lived there, how much, if anything, you have contributed to the upkeep of the property, how much you have paid for repairs, improvements, etc.
In addition your wife must be able to prove she bought it from her sole funds prior to you living there, and that it was always your joint intention that the property would be solely hers. She also has to prove that her income was sufficient to pay the mortgage and upkeep in full, and a fair contribution to your joint living costs as it is not uncommon for a couple to split the outgoings so that one pays the mortgage and the other pays the bills.
Unfortunately it may appear unfair but the OR's duty is to investigate the position, and try to recover assets for creditors.
The OR will write to you, and your wife, once his investigations are concluded if he believes you have a beneficial interest in the property. At this point your wife should obtain independent legal advice regarding her position and options.
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Bridgewood
Junior Member
United Kingdom
222 Posts |
Posted - 16 March 2010 : 15:47:53
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Sorry I posted the above before seeing the response from gettingoutofdebt.
Another thing to bear in mind is that the OR's claim, if he believes he has a beneficial interest, will, potentially, be more than £4,500. It will include the costs of the bankruptcy and interest on the debts (assuming the beneficial interest is quantified at an amount greater than £4,500).
If it gets contentious it may also be that the OR will seek the appointment of a trustee, in which case the costs will increase substantially.
A lot of things to consider for a relatively small debt - one possibility is for you to bite the bullet and, if you can raise the funds to do so from a third party (e.g. your wife), apply for an annulment of your bankruptcy - this may work out cheaper than arguing the position with the OR/trustee
As with all things of this nature I would recommend you seek professional assistance ASAP |
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Daniel Griffiths
Junior Member
United Kingdom
268 Posts |
Posted - 16 March 2010 : 16:00:04
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Hi Tim What a position to be in,
First the onus is on the OR/Trustee in bankruptcy to prove you have BI in this property, and NOT you to prove otherwise, and from what you have said this will prove very difficult.
Normaly when married and the property is in the non bankrupts name there is no claim to equity although they may try and argue otherwise if they can prove that you have contributed to the equity in that property, be it paying off Capital (Not interest on Capital) or generally improving the property to gain its value, or contributing Capital to it at any time, If this is not what happened in your case then it is rare for trustee to press a financial claim and normally the property is safe from the attentions of any trustee, however as he is working on behalf of the creditors he will have to poke about as you may say to clarify the position. |
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Tim.jf
Starting Member
4 Posts |
Posted - 17 March 2010 : 17:28:40
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quote:
Originally posted by Daniel Griffiths
Hi Tim What a position to be in,
First the onus is on the OR/Trustee in bankruptcy to prove you have BI in this property, and NOT you to prove otherwise, and from what you have said this will prove very difficult.
Normaly when married and the property is in the non bankrupts name there is no claim to equity although they may try and argue otherwise if they can prove that you have contributed to the equity in that property, be it paying off Capital (Not interest on Capital) or generally improving the property to gain its value, or contributing Capital to it at any time, If this is not what happened in your case then it is rare for trustee to press a financial claim and normally the property is safe from the attentions of any trustee, however as he is working on behalf of the creditors he will have to poke about as you may say to clarify the position.
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I was declared bankrupt last september
