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laura.an
Starting Member
2 Posts |
 Posted - 31 March 2010 : 06:24:45
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Bought a house with husband on shared ownership. I paid deposit of £3000. He moved out in Dec 2001, we have not divorced but he not made any contribution to household. Our daughter lives with me.
He was declared bankrupt a year ago and I have been asked for £19,000 to purchase his BI which I wish to contest.
My calculations
We'd had the house 11 years and 5 months, contributed equally for 3 years and 2 months, I'd done the rest for 8 years and 3 months, i.e I'd made approx 72% of payments on my own and together we'd made 27% so therefore his beneficial interest might only be 13.5% and therefore in the region of a much more realistic £5k.
Assuming house valued at £190,000, half belongs to housing association so then £95,000 left, outstanding mortgage is approx £42,000, that leaves £53,000 to split between us - take off the debt of £6000 he was made bankrupt for leaving £47,000 to split between us and our equity is £23,500 each.
As part of his court agreement to move I lent him £1,000 as a deposit for rented property, do I count that before the division or after? I
Please check my sums
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Jane.l
Average Member
511 Posts |
Posted - 31 March 2010 : 08:25:14
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As you are married, the division of equity is 50/50 unless there is a divorce settlement stating otherwise.
you do not deduct the £6000 debt that he went bankrupt for from the equity, this is written off in his bankruptcy and the OR will want to realise your husband's 50% of the equity for the bankruptcy, for OR fees and then to distribute to creditors
You mention a court agreement to move, could you explain a bit more about this please? |
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Bridgewood
Junior Member
United Kingdom
222 Posts |
Posted - 31 March 2010 : 09:16:47
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Hi Laura
As stated in the previous post, the starting point for a jointly owned home is a 50:50 split of the equity.
If there is a Court settlement, or an agreement signed when you bought it stating that the split should be anything other than 50:50 then it would be taken into account, but otherwise the OR will start off at 50% of the equity
Based on what you have said, the equity available is £53,000, half of which is £26,500.
You would argue that, since your husband left over 8 years ago, and you have been responsible for the mortgage, and upkeep of the property ever since, you are entitled to more than 50%, and, in general terms, that would be usually be accepted by the OR or a trustee, but the extra proportion you are entitled to would be open to negotiation, and would require some sums doing as to how much the property has increased in value since he left, how much the mortgage has been reduced by you, how much you have spent on the property increasing its value (as opposed to just decorating) etc
It isn't a straightforward calculation, and there isn't a hard and fast rule as to how much equity should be divided.
If you don't agree the OR's assessment of £19,000 you will need to tell them why you don't, and have some figures to explain/justify why not.
In these circumstances I would usually advise someone to seek professional advice - maybe the CAB might be a cheaper starting point
Good luck |
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RHB
Senior Member
1159 Posts |
Posted - 31 March 2010 : 09:17:33
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| You can always offer to purchase it at a lower price. My guess is that it could be complicated to force a sale on a shared ownership property so whhy not put what you have written down here in a letter to the trustee & offer 5 thou to start with. |
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RHB
Senior Member
1159 Posts |
Posted - 31 March 2010 : 09:22:09
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| BTW, I would also look at getting divorced because your husband could still come after a share of the property, even after you purchase BI, under divorce law. |
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Please check my sums
