Is there only one option?

diablobear

Hi there guys

Some people close to me are really up against it.

He has a huge amount of debt which will take him a lifetime (probably longer) to pay back. He's been advised to go BR by the debt charities. This is all down to very bad business luck, not gambling or overspending. His head has been in the sand a few times, but then who hasn't done that!

However, he borrowed money (years ago before it all went wrong) from his Mum and took out a mortgage to buy the home she was going to pay cash for. Not the best of plans, but there you go, what's done is done. If he goes BR she will lose her home. So, he's been battling to pay all debts for the last few years to ensure that this didn't happen. He moved in with his Mum ages ago to be able to afford to pay everything. Now Redundancy has made this impossible. He is struggling to find work which will pay the same for him to carry on paying the mortgage, ccj's & the rest of his creditors. HMRC were already asking for more before redundancy and he's really up the creek without a paddle and the other creditors will not take less and if HMRC don't go for BR then I suspect that one of the other creditors will.

He has been told they can't legally show her interest in the property as the OR can unpick this even though it can be proved that it is actually her home and she leant him the money.

I am assuming that the only possible option to save the home for her is that someone else buys the BI if he goes or is indeed made BR - (it does have a little equity but not enough to cover all his other debts), He would be able to afford the current mortgage on a lesser paid job if he didn't have the other debts to juggle. He has no other assets of any great value.

However, will the OR allow this? If it shows that he has been preferring his Mum as a creditor via the mortgage will the OR say - "No Can Do"? Will he get a BRO/BRU for this??

How will he be able to repay the person if they purchase the BI? I am assuming this can only done be once he's discharged and after the 3 year IPO/IPA if put in place?

Will his Mum be classed as a dependent?? (she is retired with little income). The mortgage is about the same as it would be to rent somewhere for him and his Mum.

There has been talk of his Mum possibly moving in with family & renting the house out for a little while to cover the mortgage, so he can concentrate on the other debts and give him time to get a job/jobs that will bring his income back to what it was, so he can continue doing what he was doing, (but I fear that this is just putting off the inevitable),

My BR didn't involve property and everyone is racking their brains for the best way to sort this mess. So I thought I'd post here, to see what I can find out about BI, a possible BRO/BRU & if anyone has any suggestions or ideas of what can be done.
I am so close to this - I can't even think straight.

Thanks in advance.

Dez-Titute

The one big issue here is the fact that you friend has been made redundant,therefore if he cannot afford the mortgage and his normal living expenses the OR could refuse bancruptcy.

diablobear

Yep, that's 1st thing I hadn't thought of! Thanks.

So what happens if HMRC or someone else goes for BR, will it also be refused? Then what happens??

If he get's a lesser paid job which covers the mortgage & living expenses but not the other debts, he could go BR then?? He's been unsuccessful getting work paying the same so far and needs to get any paid job at the moment.

StuntmanBob

Dez-Titute wrote: »

The one big issue here is the fact that you friend has been made redundant,therefore if he cannot afford the mortgage and his normal living expenses the OR could refuse bancruptcy.

I don't wish to crash into your thread, but what happens if the bankruptcy is refused? I wasn't aware that it could be refused, let alone on grounds of not having enough money.

Dez-Titute

The OR can if he sees fit not allow the BR to proceed the thought process behind this is whats the point making someone BR when they can't afford their basic living expenses and would end up having to go BR for a second time with more serious consequences.
Having never come across anyone who has been refused can't expand further however I'm sure a more learned poster will be along to enlighten us all.

Cheers DEz

Deep_In_Debt

I think it can also be refused if you've not sought advice. My ex OH was refused bankruptcy the first time he applied as he had not sought advice and as Dez said, he didn't have a job and couldn't afford his basic living expenses. As soon as he got a full time job he re-applied and it was granted.

diablobear

OK, so he needs a job to do it himself.
But what happens if HMRC or other creditor attempt it, will it still be refused, if so... what happens then?? They all know he's not working at the moment.
I know the house is at risk if the mortgage is not paid, that is being covered by others for the very short term.

Deep_In_Debt

I think if a creditor attempts it then it's generally accepted especially from HMRC.

diablobear

Yep, I'm aware HMRC possibly/can/will do it.
If they do will it still be refused if he's not working, if he can't do it, can they??

Deep_In_Debt

I think it's unlikely that it will be refused if they do it. If that's the route that you want to take, then it may be worth letting one of your creditors (HMRC) do it for you. Saves on the fees too! I'm sure someone will correct me if I'm wrong.

diablobear

Deep_In_Debt wrote: »

I think if a creditor attempts it then it's generally accepted especially from HMRC.

Sorry, just re-read your post. To clarify......
If he has no job and....
HMRC petition for BR, it will be accepted.
If he petitions for BR, it won't be accepted.