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chewy22
Junior Member
United Kingdom
203 Posts |
 Posted - 15 July 2008 : 19:09:57
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House equity and her bankruptcy
Need a little help here.
Will try to keep it short.
About one year ago wife walks out divorce started. Find out later (long story) using a credit search that she has hidden debts on credit cards and loans and also unpaid suppliers (sold her business just before she left) all unsecured totalling £82k
Now the divorce is about to go to court for ancillary relief on 14th August. I have just been given details that one of her suppliers that she owes £4500 to has started bankruptcy proceedings filing the papers on 1st July.
We have a house in joint name with mortgage of £28k with endowments showing shortfall of about 8k. The last value of house was £170k but told to expect sale of £165k but seems house prices will soon be in freefall. Her equity will be about £68.5k
I can’t mortgage this amount to pay her and I have our son in the home to look after age 15. At the moment I am on working tax credits so my income is low. I am building up a new business and can see a good income in about a year or two.
Questions
Can I expect to pay much % less than her equity to the OR
Will I be given any time to make a payment?
Are they (OR) forgiving and easy to deal with.
Now that the petition has started how long will things take?
The divorce was a big blow but the stress of loosing my home is taking it out of me.
Some details about her
She has a job bringing home about £900 month formed a relationship with the guy she left me for. They bought a new home last December but it is in his name. Also £16k loan taken out in her name that looks like it was to be used to consolidate some cards but she never made a payment on it, and no debts paid off even after one year, and is now in default. I think it was used as a deposit on his new home. How do I stand?
I am getting advice from my solicitor on some of the above but never seem to get an answer as to what will happen.
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melanie_giles
Senior Member
1191 Posts |
Posted - 15 July 2008 : 20:29:50
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Hi chewy and welcome to the forum
If the property is jointly owned, and assuming there are no reasons why either of you should claim a higher portion of the equity, then a 50/50 split will be applied if your wife is to declare herself bankrupt - or one of the creditors is to jump in and do this for her.
If she is made bankrupt, the Official Reciever will be appointed Trustee to her estate and all of your wife's assets will vest in him/her including the interest in your property. The OR will ask you igf you wish to acquire her interest, and in the meantime you will be allowed one year's grace to either find the money or make alternative living arrangements. The OR and his/her staff are very reasonable, but they have a job to do and they have wide powers to ensure that your wife's assets are protected and realised for the benefit of her creditors.
I am glad that you are taking legal advice - but do be sure to have instructed a solicitor with experience of insolvency as this is a specialist area of the law.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 15 July 2008 : 22:18:30
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Thank you.
Can I ask what past experience others on the forum have had, when the OR ask me to acquire her interest will I be expected to pay the full 50% of her equity in the home or can I buy say her £68.5k for example £40k if that will be the maximum I can mortgage or borrow from family. |
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melanie_giles
Senior Member
1191 Posts |
Posted - 15 July 2008 : 23:49:56
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That offer would not be acceptable to the Trustee I am afraid. They are duty bound to get the best offer for creditors, and whilst most private sector IPs will negotiate with your, the difference between those figures is too great.
In the event that your wife's debts are lower than the value of her equity share and if, together with the costs of administering the bankrutpcy a lower figure is required, then it would be possible for you to make a lower offer, but you still have your wife's residual share to deal with.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
Edited by - melanie_giles on 15 July 2008 23:51:23 |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 16 July 2008 : 07:45:15
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That doesn’t to sound good for me. If the housing market does continues to fall then I will have less to find to buy the half equity out from the OR sometime in the future?
I just want to keep my home as I only have 33 payments on the mortgage to go.
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Ian Richards
Junior Member
United Kingdom
296 Posts |
Posted - 16 July 2008 : 09:14:23
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Hi Chewy
I really feel for you mate as this is a bit of a tough one. I too believe that because of the nature of this you do need to have a solicitor dealing with this for you. Can i presume that your ex knows about the creditor petition? You could try and explain what the consequences are going to be for the both of you and ask her to try and negotiate with her supplier for a monthly payment to prevent proceedings. What is the ancillary relief for? Is there an intention from her to force you to sell the property anyway? |
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hammy0107
Junior Member
399 Posts |
Posted - 16 July 2008 : 09:18:03
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chewy22, i feel for you mate.
I am sure a divorce causes it's own stress without having to fight for your home also. I too am gambling on a falling market to keep my home. Fingers crossed eh, and good luck. |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 16 July 2008 : 17:50:10
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quote:
Originally posted by Ian Richards
Hi Chewy
What is the ancillary relief for? Is there an intention from her to force you to sell the property anyway?
She is intent on forcing a sale of the home to pay her creditors then split the rest with me. This seems unfair as I had no knowledge of her debts and how she came to have them this will leave me with very little to house myself and son. I paid 70% of all the bills on the house. I don’t think she knows of the petition yet but can’t be long. I don’t think she wants bankruptcy. But she owes 82k and has about 68k in her fair share of the home. |
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melanie_giles
Senior Member
1191 Posts |
Posted - 17 July 2008 : 00:25:42
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Whether your wife has debts or not, I guess that she is entitled to her share of the property, but it seems such a shame that you may face losing your home as a result. A good lawyer may be able to argue that you are entitled to a larger share of the property, so I would definately recommend you at least arrange for an initial consultation. If you let me know what part of the country you live in, I can perhaps suggest a couple of firms who would specialise in this sort of thing.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 17 July 2008 : 13:33:46
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Thanks Melanie
Phoned the official receiver up in my area and they have no knowledge yet of her case so I expect she doesn’t know yet about her bankruptcy. They did say it can take 3 months to get to them as they were just dealing with cases from March this year. In 4 weeks time she takes me to court for ancillary relief but not clear what she is asking for as she wont communicate with me. This could allow us to make an offer after court and she could maybe be persuaded to take an IVA with what I can afford. Does this sound ok or have I missed any pitfalls.
My solicitor does seem to be on the ball about finance and I have had to read a lot to keep informed. I am now sort of desperate and need to know what others have experienced.
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 17 July 2008 : 14:44:43
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Can I point out that in any fair event she will end up with nothing
If she forced the sale of the family home and pays her creditors she will have about 15k shortfall
If she takes an IVA she will have nothing and have to make payments for a number of years
If she goes bankrupt then again she will have nothing.
What would be her best option. |
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melanie_giles
Senior Member
1191 Posts |
Posted - 18 July 2008 : 00:31:49
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It's really hard to advise on that without any knowledge of her case, but whether she does an IVA or goes bankrupt, that equity in the property will have to be dealt with.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 18 July 2008 : 17:44:56
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what will hapen to her equity in the home if she takes an IVA I located this quote but dont understand how it works for us
"If you have equity in your house, an endowment policy linked to your mortgage, or valuable assets you may be required to release them in to pay your creditors. (This is usually done near the end of the arrangement). However this is preferable to repossession and enables you to safeguard and retain your home." |
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melanie_giles
Senior Member
1191 Posts |
Posted - 18 July 2008 : 21:40:17
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In an IVA she will be required to remortgage the property to a maximum 85% loan to value during the final year, introducing any monies raised into the IVA for the benefit of creditors.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 24 July 2008 : 22:36:52
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I don’t think that will happen. I now have a copy of the solicitors letter to pay the statutory demand for Dishonoured cheques. It seems there will be no good reason to set aside the claim, as it is a clear undisputed debt.
I can now presume bankruptcy proceeding will start soon unless she can pay the debt in full. He won’t accept a payment program.
What is the time table
Letter dated 1st July to serve by personal service the demand for £3956.21 |
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chewy22
Junior Member
United Kingdom
203 Posts |
Posted - 28 July 2008 : 20:43:05
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| Sorry to push this one to the top again but I am desperate as I have a court date on the 14th August for dispute resolution and I could lose my home. |
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House equity and her bankruptcy
