My house is jointly owned with my spouse, with equity of about £20K. My debts are about £60K and are in the form of unsecured overdrafts (~£18K), business creditors (~£12K) and unsecured loans (~£10K), unpaid VAT (~£12K), business credit card (~£11K). Will the family home be at risk if I apply for bankruptcy?
In bankruptcy the official receiver is interested in you assets that could be sold to help pay fees and debts.
This includes business assets, car & equity in the house.
However the equity in the house would be split between you and your spouse and there may be mitigating circumstances where the equity is actually more theirs than yours ( for example if you have already borrowed against the house to invest in the business this may be seen as you already taking some of your equity and therefore reducing your claim on the balance)
Additionally you need to research carefully what the true value of the house is - it may actually be less than you think.
what type of business do you have, is it a Ltd company or are you a sole trader?
If you were to file for bankruptyc in your sole name your home would be at rick due to the equity available in the property - the OR would want your share of the equity for the benefit of the creditors. Your share would most probably be deemed to be 50% so on the figures you have stated - the OR would want £10k from your wife or a third party or the property sold and your share of any equity realised to be given for the beneift of your creditors.
I apologise if this was not the information you wished to hear, but the OR would always go after any equity available in a property.
If i can be of further help please ask away
Melanie Nicholas 28 years insolvency experience - 23 of which in the Insolvency Service - Insolvency Manager Jones Giles email me at melanienicholas@jonesgiles.co.uk
Hello and thank you both for replying here. I am a sole trader and I suspect that the house is of a lower value than my initial thought. I shall ask to get it valued before I go further down this road just to be sure of the consequences for the family home. Ludicrously I am one large order away from any of this mess.........there just are no large orders around though. Or at least not any I seem able to win.
Your first step would be to obtain a 'quick sale valuation' (a realistic figure for an offer - usually the figure an estate agent reduces to after 6 weeks) also obtain a settlement figure from your mortgage provider and include any 'early repayment penalty' and basically take one from the other to arrive at you equity situation
Good luck!
Melanie Nicholas 28 years insolvency experience - 23 of which in the Insolvency Service - Insolvency Manager Jones Giles email me at melanienicholas@jonesgiles.co.uk
If you are still trading I would really recommend you speak to someone.
You need to understand the total position and where you are both business and personal and at the very least have a plan for a succesful large order in addition to having a plan if it doesn't go the way you want it to.
At least then you will be in a position to hope for the best vbut will have planned for the worst. you will then be in control and believe me will feel a lot better knowing al the options and the consequences available.
My house is jointly owned with my spouse
Posted - 29 April 2009 : 16:01:06
