I have been declared bankrupt, I have a buy to let property with a rental income of £250/week jointly owned with my wife. the OR has said they want half of the rental income and my wife has to cover the mortgage costs. If I had a spare £500 a month I probably wouldn't have gone bankrupt in the first place. I can't see any way I could pay this without acruing more debts, paying this would not leave us with enough money to live on per month and as a self employed person I wouldn't be able to put anything aside for the taxman so don't ever see a time when I would become solvent, it would also probably end up with my wife also being declared bankrupt. The property is currently in negative equity and only has 2 years left on the mortgage after I was very poorly advised to take out a very short interest only mortgage. Is there anything I can do about this? I always thought that the OR was supposed to leave you enough money to live on
This has come up before on this forum and if you trawl back you'll find a very similar case fairly recently.
I argued at that time that it appeared a wholly unreasonable approach for the OR to take, in that where a property is in nil or negative equity there is no equity stake held by the bankrupt person and therefore nothing for the OR to base a claim on.
However the position you are in seems to be the normal/accepted practice (though I'm surprised no-one has mounted a legal challenge - maybe someone should).
Don't forget in the OR's eyes your finances and your wifes are separate (although in practice they may not be). The OR will allow you personally enough to live on, but not to the extent of subsidising your wife's obligations to pay the mortgage - the upshot being of course that if she cannot afford to do this, the property becomes at risk of repossession.
The property is about £10k in negative equity. My relationship with my wife is already very strained due to my bankruptcy. We have both always worked and always kept our finances completely seperate and I think if my wife was forced into bankruptcy that would be the last straw. I am self employed so we may be able to pay the mortgage if we had to pay this money but of course I would never have the money to pay the taxman, this would mean that I would always be accruing debt I couldn't pay and would mean I would never become solvent again. As I don't have the money to pay the OR what action can they take? I am quite happy to fight this in court if that is where this ends up I feel I dont have anything to lose.
I have been declared bankrupt, I have a buy to let property
Posted - 29 May 2012 : 09:31:05
