Need help with a few questions which I just want to be certain about.
I recently became bankrupt and now it's my partners turn. He was for very many years a successful businessman but has now lost his business and amassed large debts due to the recession. We live in a rented house and have no assets and couldnt be more broke. My partner has an ex-wife and two teenage children and pays the mortgage on the house that they live in. Both his and his ex-wives names are on the mortgage. She was also previouly a partner in his business and her name is still on a couple of leases, such as his car (which has now been taken back by the lease company). Does this mean that when he goes BR that his ex-wife will also have to as their names are both on the debts? She has no other assets other than her car which she needs for work and school runs. It's probably worth about three thousand pounds.
Secondly, the house possibly has about 10-15 thousand pounds equity, yet to be formally valued. There is a secured loan of thirty thousand and the mortgage is 2 months in arrears. We all know that the value given for the property is likey to be a long way from the price it would probably sell for, ie offers coming in low these days. Would the OR seize the house on the basis of the estate agents value? Then would his ex and the children have a year in which to move on?
There are so many issues to consider and whilst there isnt any choice in going for BR the idea of losing the house and then trying to get rental once bankrupt is so worrying.
firstly what were previously the debts of the business will become 100% his ex wife's liability if your partner declares bankruptcy and she is a joint account holder of the debts themselves. She therefore has to be in a position to make the repayments, settle them in full, or face bankruptcy. I assume the business they had was / is not a limited company.
If the other routes are not an option and his ex declares, or is declared, bankrupt then her car is at risk unless she needs it for work. The house is also at risk if the estimated equity figure is correct. Emphasis on the words at risk as if a buyer cannot be found who offers sufficient monies to settle the current mortgage and any secured loans on the property then it won't be sold provided the mortgage repayments are maintained.
Of course if the arrears increase then bankruptcy or not the lender will apply for repossession. If this happens the process takes 5 to 6 months minimum. If the trustee decides to market the property and the mortgage is being paid then you are correct in thinking that your partner's ex wife will have approx 12 months to look for alternative accommodation.
Will house go
Posted - 06 May 2009 : 22:40:07
