Hubby's potential Insolvency / bankruptcy

[reduk054]

Quick update: an insolvency practitioner has been appointed on behalf of the creditors, and will be sending someone round to value to the house regarding hubbys beneficial interest.

Please can someone clarify that the only money that is counted as beneficial interest is half of the equity i.e. the difference between the current market value, and all of the mortgage & associated costs? Then divided by two (half mine, half hubby's)

thanks

Red

[sequenci]

Quick update: an insolvency practitioner has been appointed on behalf of the creditors, and will be sending someone round to value to the house regarding hubbys beneficial interest.

Please can someone clarify that the only money that is counted as beneficial interest is half of the equity i.e. the difference between the current market value, and all of the mortgage & associated costs? Then divided by two (half mine, half hubby's)

thanks

Red

 

so long as you've not made a legal arrangement to state anything else then that would be the case.

[Mr. Kipling]

Oh no she said Im sorry its the Bank of Scotland not the Halifax, can I take your security details again.

Most certainly not I replied, as I dont know who you are you could be anybody after personal information and Im not prepared to divulge that to any tom dick of harry that happens to call. But it really is the BOS she replied.

 

 

 

She`ll be heading for either re-training or the sack then...

[reduk054]

Thanks secquenci, I take it that you mean if hubby and i had a separate personal agreement that either share of the equity is greater than the other (we don't, more is the pity at this stage!).

Does the original deposit come in to the equasion, I am 99.99% sure that it does not, but hubby thinks that the OR/IP can have a claim on that as well. (just to clarify that following a re-mortgage the original deposit was effectively lost)

thanks again Red

[ginger head]

It could in theory come into play if there was funny stuff going on, but in 99% of cases not.

 

I would, btw, be prepared to get your own valuation of the property if you are looking to buy out the Trustee's interest and don't agree with his valuation.

 

Always room for a bit of haggling!

 

I am surprised creditors have appointed an IP as trustee if there is only £5k of equity in the house as you said and no other assets.

[Gingerheid]

Oopsadaisy... that was me too. I seem to have two accounts! Never realised until I saw that was my first post and thought "no it isn't...".

[reduk054]

Hi Gingerhead, thanks as always for your replies (although you seem to only have ever sent one mail?? confused).

We were a little suprised about the appointment of an IP. We think that the main creditor applied to have one, as we have really p**** them off and I am still arguing with them over a number of matters (they are a high street bank) and I did get my own valuation done yesterday

sadly it does seem that house prices in the area have held their own and there is more equity than we thought, say £20k, but that is joint, so its not all doom and gloom.

What are the reasons for the IP involving the original deposit? i.e. if the deposit was paid just by hubby as an example? Need to know what could be fired at me on this one, so all info greatly appreciated.

Thanks for the advice, and help

Red

[Goldlady]

Red I wonder if they are trying to work out who paid the original deposit. If you had paid it (please let this be the case) then you would own proportionally more of the equity than him and it wouldn't be worth them respossessing. (It's all to do with trust law). Like say the house cost 50K and you paid a deposit of 10K out of your own money then you would own the house at a ratio of 30:20 - or 60% of the equity would be yours and 40% his.

[reduk054]

Hey Gold Lady, thank you for your thoughts...we have pondered this one!

If on the other hand, Hubby put the larger deposit down, would the IP be after more beneficial interest? And how would they know who paid what?

Red

[Josie8]

If its owned as a beneficial tenancy then it is assumed it is a 50/50 share, regardless of who paid deposit etc. Any different and you would have been tenants in common with shares divided in % agreed

[reduk054]

Josie8 that is an intersting and potentially very helpful comment.

What exactly would be the fundamental difference between beneficial tenancy and tenancy in common, i.e. how do I know for definite which one applies?!

Sorry if this is a basic question!!

Red

[Josie8]

beneficial tenancy is the more normal and the net result is whichever party dies their share automatically reverts to the other party, bypassing the estate etc. The law assumes that if beneficial tenants then 50/50 split.

 

Tenants in common = the two parties decide to state that their shares are seperate (and can be left to anybody else) and can determine the ratio i.e 20 % to 80%.

 

Just a word about secured debts - check that your husband was able to no longer be liable because I was under the impression that secured loans and child maintenance (for example) can not be wiped out by BR. In other words if secured loans are owned jointly creditors can come after you but also him when out of BR. If secured debts in his name alone then they could come after him at end of BR.

 

I may be wrong but it would do no harm for you to clarify the position with the OR.

[Goldlady]

If it wasn't in your favour you just wouldn't mention it, but if for example you had paid it then you could argue it. My OH had a £9000 grant towards buying our house and we were told we could use that to say he owned more equity (as I was contemplating bankruptcy at the time), however the grant was eventually put in our joint names because the mortgage lender insisted on it, so that argument went out of the window.

 

There is another issue - if you have paid the mortgage payments out of your earnings this could affect your share as well.

[reduk054]

Thx again Josie8

In simple terms then, most mortgaged properties are beneficial tenancy therefore assuming a 50/50 equoty split.

If hubby and i were tennants in common, then there would be paperwork drafted by a solicitor to note otherwise....and would this be public knowledge?

No secured debts, but I am being chased by creditors for joint unsecured loans, but that is another story.!

Red

[Goldlady]

I suspect the tenants in common thing could be errr back dated:p

[reduk054]

Goldlady, again the mortgage payments are certainly an avenue for us to have a look at. Before hubby's BR the payments were made through a joint account (although I have been chief earner) and then since May through my sole account.

my concern is that the newly appointed IP for the creditors thinks that we have lots of equity, or more importantly that hubby has lots of equity. But on the other hand we have an IP too.

Just looking down all avenues at the moment!

Red

[reduk054]

I suspect the tenants in common thing could be errr back dated:p

LOL, don't think that the IP would accept a scrap of paper dated way back when from me and hubby saying that the house is mine all mine!!

[Goldlady]

Haha, that would be pushing it I think. They also need to value your house at forced sale value so I understand.

[Josie8]

I suspect the tenants in common thing could be errr back dated:p

 

 

 

No it can't be as it has to be done formally and registered at the Land Registry and the OR has the power to revisit transactions for I think the previous three years if the OR considers its a manouvre to deprive creditors.

 

If you weren't aware that you are tenants in common then you most probably have a beneficial tenancy.

 

You can normally negotiate a 10 -15% discount off the official value of beneficial interest with the OR.

[reduk054]

Josie8, again thank you for your time and help,

I have dug out the paperwork, and have the land registry entries. Just to clarify, would a "declaration of trust" appear on this entry? I cant find any reference on the land registry but then i am not fully conversant with the terminology!

thanks

Red

[Josie8]

sounds like you both own it beneficially. It would state as tenants in common.

 

As to the car issue,

 

Registered keeper does not prove ownership. If you have been making payments out of a joint account etc then you should be able to prove part ownership at least. In which case the 700 you've just paid out - the OR owes you half. Whose name was the insurance in? If your husbands were you named driver?

 

Had you had the car liveried in any way for your business? In what way is the car specific to your business - you mentioned cards etc being printed.

 

The more reasoned argument you put up the more likely the OR is to settle.

[reduk054]

Just been reasearching on the net and found a useful site

http://www.questbrook.co.uk/trust.htm

as I need to establish for my own peace of mind what the land registry entry says!

What would be the reason for the OR (or in my case IP) to accept a reduction in the equity, forced sale price? I thought that they wanted as much as they can get!

Also think the car issue is resolved, in our favour due to my lengthy documented arguments!

Back to the house!!

Thanks all!

Red

[Josie8]

There is established case law where the other half is owned by the wife. I'll root it out for you

[Goldlady]

Most of the caselaw I know about involves houses that were owned by the husband only (from the bad old days:D) where the wife was able to claim part of the equity because she had contributed to the deposit/paid the mortgage etc, or even done major building work!! But it is worth arguing that your salary, if it was a lot more than his, paid a larger chunk of the mortgage and that you therefore have more of a claim on the house than 50%. I think like the car you can put up a fight - I certainly would.

[reduk054]

Thank you Josie8 for helping out and doing some extra research for me, I really appreciate it!

Goldlady, I will certainly be fighting and chosing my arguments carefully! Your support is so wonderful. Should have some more news tomorrow! so thank you again (think I can now sleep tonight!)

Red