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Jim
Starting Member
United Kingdom
5 Posts |
 Posted - 09 April 2010 : 12:44:44
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Hi peeps. Am hoping that I can find some practical advice on here as I have absolutely no idea what's what when it comes to bankruptcy.
I think it's easier if I put it all in a nutshell then open it up for comments/advice...
Bought house with my then-fiancee in Sept 2000.
Got married Aug 2006.
Seperated May 2008 - she moved out and stopped paying anything towards the house bills or mortgage.
Decree Absolute issued Jan 2009.
We agreed that we needed a "Clean Break" Consent Order to seperate us financially so we drafted one in March 2009. At that time the joint mortgage on the house was ~£67,500. The house is a semi-detatched and next door (the other half of the house) had been on the market for *two years* by this time and the owner still hadn't been able to sell it, and at the time it was up for £72,000.
We therefore agreed that in the case of forcing through a prompt sale we would have no equity, and would probably end up crystalising negative equity instead. So - in theory - to transfer the property solely to me at that point represented no realistic transfer at undervalue. To further support that valuation, the next-door property DID actually sell (after TWO years!) at the start of April for £72,000 - so there is a Land Registry record of the price paid to support my valuation of our own property. The Consent Order was registered and applied by the court at the end of April 2009.
As the core of the "clean break" Consent Order she therefore agreed that in exchange for my undertaking to "use my best endeavour to secure the release of the Respondent from the date of this order from her liability under the Charge [mortgage] and to indemnify the Respondent against all such liability" then she would "transfer to the Petitioner any interest thereon if any, all her legal and beneficial interest in the Home subject to the charge."
The long and tall of it was that I indemnify her against all the ongoing costs/mortgage payments/council tax etc. and exercise my best efforts to release her from the mortgage and she transfers to me her legal and beneficial title.
Here's the fun bit.
At great personal cost and sacrifice I have indeed indemnified her against all ongoing costs. I have been made redundant twice and been out of work for approximately 7-8 months in total since then and have sold personal assets, begged and borrowed from family and maintained all payments. However, I have as yet been unable to secure her release from the mortgage. First the existing lender wouldn't do it until the Decree Absolute was issued and we had the Consent Order. By the time that was done, the credit crunch was biting and their borrowing criteria changed so they wouldn't allow me to take the mortgage on by myself. I then lost my job but secured a new one and started there in Feb 2009. At the start of May 2009, with three payslips in my sweaty palm, I made a new mortgage application. This was declined because unknown to me, my credit record had two entries from debt recovery firms in respect of my ex-wife which had been logged after she moved out but before the divorce was finalised. I therefore made a second application for a remortgage to another lender, having explained this first and was accepted. However before the new mortgage was completed I was made redundant as the company went bust. Superb. So I had to declare my change in circumstances and withdraw the mortgage application accordingly.
Since then there have been no suitable employed positions in my industry so I have gone self-employed as this is the quickest way to secure a remortgage for me. I am therefore confident that I have been exercising my best endeavours to secure her release from the mortgage but it's not yet crystalised.
So in my eyes I've fulfilled both my material undertakings as per the Consent Order (indemnify her against ongoing liabilities and best endeavour to secure her release from the mortgage), and the only hang-up has been not being able to take her name off the mortgage and therefore transfer legal title to me. However, in my own (admittedly limited) humble opinion I feel that the above should vest the beneficial title of the property in my name and the change in legal title is simply a formality.
Anyways, back to present day. I got a text from my ex-wife last month telling me she was declaring herself bankrupt. I have now been contacted by the OR telling me that they own her interest in the house and they have just sent me a B178 NOTICE OF AN APPLICATION TO REGISTER RESTRICTIONS AGAINST THE LAND. It asks me to either challenge it or accept it (acceptance is granted by default on the 28th April if I don't sign and return it before then).
So firstly, do I prejudice myself in any way by signing the B178 or by not challenging it?
Secondly, I have sent loads of stuff to the OR to support my side of the argument (Decree Absolute, Consent Order, proof of next-door's sale value at the same time as the Consent Order was applied, evidence of my seeking remortgages, copy of my credit report showing the debt recovery searches and my remortgage applications, letter from my current lender confirming my two meetings with them to try to remove her from the mortgage, along with a detailed narrative of the above).
The OR has informed me that they will only look at the value of the property at the time of the transfer by way of Consent Order to see if it was a transfer at undervalue and whatever the value of the property is now is irrelevant. However I recognise that the OR acts in the interest of the creditors, not me, therefore I'm not inclined to take whatever they say as gospel as I don't fancy being lead down a merry path thinking it's all ok to then get sucker-punched at the 11th hour.
So what do peeps think?
- Should I sign the B178 notice and send it back to be helpful or should I challenge it?
- Do you think it'll all end pleasantly (i.e. with me just paying solicitors costs for a transfer of interest at nil value or negative equity to me) or do we see doom and gloom on the horizon?
- Is the OR really only interested in the value of the property at the time of the Consent Order?
- Even if, as I've explained, I've adhered to my undertakings as per the Consent Order, can the OR still deem it invalid and go for half my home?
As you can imagine, this is a very stressful time for me. My ex has been getting advice and guidance from the OR and is very happy and chilled out about the process but it's me who's getting all the stress :(
Any thoughts, guidance, comments or insight would be very, very welcome (and sorry for the War & Peace!). |
Edited by - Jim on 16 February 2011 12:07:33 |
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 09 April 2010 : 13:11:43
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hi and welcome to the forum
the OR is looking to see if any transactions prior to BR were done undervalue to try and hide assets from creditors
if you can prove that the value was £X and there was no equity at that time then you will be fine.
in the cases of no equity in a property the Beneficial Interest of the bankrupt party transfers to the OR and can be bought back for £1 plus costs of £211
i would contest the notice you have received as your claim is that she no longer has any BI in your home
i would also suggest that you would benefit from having a chat with one of the professional foprum experts like Paul Johns from RevivaUK www.revivauk.com
he should be able to allay your fears and answer any questions with more depth
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurhman)
RevivaUK and Paul Johns helped me through it all i can't recommend them enough!! |
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RHB
Senior Member
1159 Posts |
Posted - 09 April 2010 : 16:10:39
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Is there equity now?
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Jim
Starting Member
United Kingdom
5 Posts |
Posted - 09 April 2010 : 18:10:46
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quote:
Originally posted by RHB
Is there equity now?
Arguably. I'd guess that the property value might be circa £80k, give or take. However I would think that for a forced sale you can knock ~20% off that. The mortgage is currently £65k.
What is starting to taste particularly nasty is the thought of what I've gone through since May 2008 in keeping the mortgage, council tax, buildings & contents insurances and all other bills paid. On mortgage, council tax and B&C alone I reckon I've paid out over £15,000, and the amount of stress, sleepless nights and sheer blood, sweat and effort I've had to put in, along with sacrifices I've had to make - to feel that all that is potentially being swept away by the OR makes my blood boil. Do they KNOW what it's like to live on toast and water for week after week so you have enough cash to pay the bills?? Or waking up in the middle of the night having panic attacks about how you're going to pay the bills?
Certainly, the property was in negative equity when we seperated and I started paying for everything. If I'd stopped paying, the future value of the property would have been lost, so any increase in value since then SHOULD be mine and mine alone - the Consent Order was intended to reflect that.
But this boils back down to whether I should trust what the OR has said to me - namely that they are only interested in the value of the property when the Consent Order was made. I'm a trusting soul by nature but my gut tells me to be helpful but don't give any ground, challenge the RESTRICTION NOTICE they've just issued and simply don't trust them in the slightest. I hope and pray to God that I'll be pleasantly proven wrong, but better to be pessimistic and be pleasantly surprised than optimistic and getting my backside turned inside out by a smiling OR... |
Edited by - Jim on 16 February 2011 12:11:42 |
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RHB
Senior Member
1159 Posts |
Posted - 10 April 2010 : 09:36:04
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| No,I think whhat the or TOLD YOU IS RIGHT & if there is little or no equity anyway it really won't be an issue. Are you now in a position to take her off the mortgage? |
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Jim
Starting Member
United Kingdom
5 Posts |
Posted - 10 April 2010 : 14:08:24
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| No, not yet. The issue of the property value at present is debatable as there have been no recent sales of late in the area other than next-door in 2009. |
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Ex-wife bankrupt - OR is sniffing round my home :(
