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My husband was made bankrupt at the end of 2018 for an old disputed previous business debt by the liquidators. 

 

We have been trying to annul the bankruptcy through a bridge loan against the jointly owned property which is proving difficult as the equity is tight.

 

We used an annulment specialist initially who has now recommended the house goes on the market as they couldn't secure funding. 

We have potentially found another lender ourselves who may help but it's unlikely we can turn it around in time and we are no longer working with the specialist.

It's also very costly to repay but feel it would put us in a better position for future remortgaging if the bankruptcy is annulled. 

 

If we can't secure the funding quickly, has anyone experienced what the trustees will actually do as the OR has said this is the next step? 

I understand they could force a sale and extract huge amounts out in supposed fees, which could be cheaper than continuing with the loan anyway. 

 

As I'm a beneficiary with children, what hope have I got remaining in the home when I can't get the funds alone?

We've considered an IVA but the opposing creditor has the largest proportion of the bankruptcy debt. 

 

We have offered monthly payments as an IPA but they know the equity is potentially available in a lump sum. 

The other issue is our house is leasehold so may not be worth anything on such a short lease

- could this add leverage in our favour?

 

Thanks.

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Hi and Welcome to CAG

 

Is the property jointly owned ? 

 

https://www.gov.uk/bankruptcy/your-home

 

https://debtcamel.co.uk/debt-options/bankruptcy/

 

Andy


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Yes it is jointly owned. Thanks.

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Take a read of the two links above.


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Thanks. Should we volunteer to sell or is it the trustees decision only? The links say the trustees 'might sell' - is it likely they will in our case, should we ride it out and see bearing in mind the lease being less than 60 years makes it more difficult to value with the unliklihood of someone getting a mortgage to buy or is this irrelevant?  There are secured debts to be paid first plus I'm entitled to my share of the equity too. Can they just take my husband's share of the equity as a maximum or will they chase him for more when there's no other assets to offer in his name?

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Have you actually received anything in writing  from the trustees that this is their intention ?  How do you know that this is likely ?


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Hi, thanks for your reply.  Nothing as yet from trustees, it's still with the official receiver but we're going to struggle to get the annulment in place in time (hearing next week) as we can't secure a funder quickly enough nor pay off the creditors in the BR in time. We've just received an offer in principal from a lender subject to their own valuation which I fear will be lower due to the short lease, therefore there's a possibility they could retract their offer.  Most funders we have approached have said there's too much adverse credit and the lease is too short.  As the case has been adjourned twice, the official receiver has said the next step is trustee involvement.  I am trying to find the least damaging solution and the only lump sum payment we can find (which is what the creditors would only ever accept) is the equity in the house.  Should we offer to sell ourselves or sit tight and see what will happen - is it likely they will order a sale?  The equity in the house (there is enough to pay off the bankruptcy and OR fees but not much else) is based on the current valuation with a full lease. Will the short lease deter them from ordering a sale given the need to pay secured creditors first and the likely value of the house as it stands - one agent said they would struggle to value the house with the short lease due to the lack of potential buyers?  Sorry I realise it's all ifs and buts, however I'm just trying to get an understanding of the process with me being a beneficiary with children and wanting us to be free from the upset of this situation. This whole process started from when the limited company was liquidated in 2011 and was a disputed debt which our solicitor at the time encouraged us to fight...but lost the case and inevitably we are now paying the price!

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Difficult to even make a guess...a lot of ifs and buts and maybes.... leaseholds can be extended ..

 

 

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/partners-and-bankruptcy/is-your-home-at-risk-if-your-partner-is-bankrupt/

 


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Ok thanks for your time - I guess our future is in their hands at the moment as I can't find a way out otherwise.  We've had a quote for the freehold conversion which again is another large lump sum we can't afford plus legal fees....longing for freedom from this nightmare!

Edited by CS75

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Where the Circumstances are Exceptional 

Where the Insolvency Court finds that the circumstances are ‘exceptional’, the mandatory assumption does not apply. The Insolvency Court’s evaluation of the prescribed s.335A(2) list of matters to be weigh up in the balancing exercise is unconstrained by the mandatory assumption. As Evans Lombe J said in Martin-Sklan, paragraph 9, the Insolvency Court has ‘…a complete discretion…’provided those prescribed matters are had regard to. Those matters are: 

(a) the interests of the bankrupt's creditors,

(b) where the application is made in respect of land which includes a dwelling house which is or has been the home of the bankrupt or the bankrupt's spouse or civil partner or former spouse or former civil partner

(i) the conduct of the spouse, civil partner, former spouse or former civil partner, so far as contributing to the bankruptcy,

(ii) the needs and financial resources of the spouse, civil partner, former spouse or former civil partner, and

(iii) the needs of any children; and

(c) all the circumstances of the case other than the needs of the bankrupt.’

 

https://www.33bedfordrow.co.uk/insights/articles/possession-and-sale-of-bankrupts-home

 


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Hi, many thanks for this usual information.  I've had a read through this document and my children and I would be considered but I can't see our needs being exceptional as moving to a new neighbourhood, school, etc "are all classed as being the usual consequences of a family member’s bankruptcy. They are not exceptional consequences per se in terms of nature or extent". 😥

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It may be the usual information but its the only information in cases as such...see if they do go for an order of sale .....hope for the best prepare for the worst just in case.


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Ok thank you. It's likely most if not all of my husband's equity will be absorbed as I understand trustees are very unforgiving when it comes to their fees, will they stop there or try and extract funds another way ie. monthly payments etc or will they finally go away?!

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