beneficial interest in partners house.

Puppy_Boy

hello,

i have had advice from several different people (not on this forum)about the best way for me to sort my debt problems out. i owe £30,000.00 on unsecured debts (credit cards and loans).

i don't know whether i am going to try for a br, iva or dmp yet.

my biggest worry is that my partner's house could be at risk, as i have been living with her for 7 years (co-habiting) and she has lots of equalty in it. i am not on her mortgage but help to pay the bills.

she is ill and has'nt worked since april 2000 and is on incapacity benefit and she is signed off work indefinately.

i have thought about moving out and renting somewhere else to use as another address, but have been told that i could still have a beneficial interest in my partner's property.
nobody has come up with a monetry value of what my beneficial interest is, if any. if i have got any, and that it's thousands of pounds she would not be able to buy me out, or re-mortgage the house due to not working and being on long term incapacity benefit and is petrified that the or will inform her that she will have to sell her house. it is putting a tremendous amount of strain on our relationship.

we have been told that we are in a very difficult situation. we don't know which way to turn.

if anyone can give me any advice it will be much appreciated.

RichOneday_2

That's a question for a solicitor whether you have a beneficial interest.

I wouldn't have definite info on how you would value it, but the basis would be something like:

Your contribution to the mortgage over 7 years £15,000
Proportion of mortgage payments paid by you 40%
Increase in value over 7 years £10,000
Your beneficial interest £ 4,000

However, you have a partner rather than wife. Is there a possibility you were just renting off a good friend?

blind-as-a-bat_2

From what you have put there is a chance you will be seen as having a BI as its based on your contribution to the upkeep of the house, not just who pays the mortgage or the name on it, but that is very hard to work out a figure due to the fact its hard to prove how much you have or havnt spent for the benefit of the property for want of a better way to put it.

If your OH was the main wage earner then it will be less etc etc on so answering that question is impossible on a forum such as this

You really need to get some profesional advice so would suggest contacting one of the debt charaties who may be able to advise or advise who you could contact to help ascertain the level of BI you may have if any

peb

Blind as aa Bat - I may be reading you wrong (sorry!) but contribution towards the upkeep of the property (as in paying gas bills etc) does not accrue a beneficial interest. Paying or contributing towards the mortgage (as opposed to market rent), or carrying our works - eg paying for the property to be reroofed does. I'm afraid yes - it looks like you have such an interest as obviously your partner has not been able to financially contribute.. I do not know if there is a simple calculation - whenever I have seen it it is usually worked out by agreement eg in a separation agreement, so cannot help.

I wish I could as it is an awkward/horrible situation to be in..

Puppy_Boy

thanks for your help RichOneday, blind-as-a-bat and peb. i really appreciate it.

i could'nt say i am just renting off a good friend as it is a one bedroomed house.

at the moment i'm not getting very far.

ive tried several debt charities who don't seem to know whether i have got a BI or not! i am waiting to hear back from the CAB. i rang them today and they said no-one could talk to me now as they are with clients, so i have to wait until they reply to me, which can be anything from 7 working days upwards (i sent the e-mail last thursday) or go down to see them in person, (i have'nt got much time to go down there as i am working). i have spoke at great lengths with a fee paying company, i am waiting to hear back from them. i kept chasing the bloke up whose been giving me advice about my situation, as he is waiting to hear back from other people that he's contacted about whether or not i have got any BI in my partners house. ive been leaving messages, but he don't seem to be ringing me back. he did ring once, but i missed him, yet i had been waiting all day, i rang him on his mobile on monday, he said he was just on his way to the office he'll call me in 20 mins, he never did, i chased him up 4 hours later and the lady who answered said "yes he's here, i waited for a while then she came back and said he's on the phone, but has left a message for him to ring you". which he still has'nt. ive even messaged him online and still no reply. yet he rang me at 8.30pm last friday. he was talking to me for ages, when i first contacted him about my situation.

when i first rang this particular company, i rang about iva and the man i spoke to said he is going to get his colleague to ring me about BR, (which he did, last friday as already mentioned).

does anyone get the impression he's avoiding me? because he did say that our case is going to be difficult and cause a problem, with the situation that we are in.

ive just rung another fee paying company earlier and am waiting to hear back from them. the woman i spoke to said if i have got a BI in my partners house the house can be repossessed, your partner will get her share and you'll get yours. but she's going to talk to someone then ring me back.

the reason why i am ringing fee paying companies is, that when i call up official receivers office in the yellow pages online to find a local one, that is what comes up, fee paying companies.

what i am thinking is, how about i move out of her house and rent
somewhere, will i still have a BI in her house then, if i do have any? or say after 6 months or a year i will no longer have any BI?

she pays the mortgage with her benefits and i pay the house hold bills. she's had the house for 14 years.

this is making us both very ill.

i don't seem to be getting any answers. how can i just go for a BR or IVA, then so far down the line we come unstuck with the house. like in a BR the official receiver will say my partner has to buy my share out or something. which she would'nt be able to afford.

i did have a letter from a creditor in the post the other week , threatening that they will make me go bankrupt. i say threatening because i don't know whether they will do it or not.

the bottom line is have i got a BI or not in my partners house.

peb

You really need a solicitor who specialises in this - you might want to post on the housing board as I know some solicitors advise on there. I do conveyancing work and have a law degree but I am unsure - I would not rely on anybody other than an expert.

Having said that if you have not paid the mortgage or the repair bills etc then there will not be an interest. - or not when I studied!

cabvol

A person's interest in a property is her/his entitlement to the proceeds of the sale and is known as beneficial interest. It is different from the legal title to the property which is held by the owner(s). The size of the bankrupt's interest in the home will depend on who provided the deposit, who paid mortgage repayments and/or for home improvements, and what income the bankrupt person brought into the home.

The home may be owned wholly by the bankrupt's spouse, civil partner or partner. Even in these cases, the trustee will usually contact the partner and investigate, for example, whether or not the bankrupt has any interest in the home and whether the spouse, civil partner or partner's title to the home is genuine (for example, that it was not obtained with money provided by the bankrupt). The trustee has no right to sell the property if it is established that the bankrupt has no interest in the home.
If the bankrupt's spouse, civil partner or children are living in the home it may be possible to postpone the sale for up to a year, or, in exceptional circumstances, to oppose the order for sale.



A person who is not a legal owner may still have a beneficial interest and a beneficial interest may give him a rights to the property.

Understanding and establishing beneficial interest when someone is not a legal owner is complex These paragraphs do not go into detail and cannot cover every situation and development in case law. They are intended merely to highlight the main issues.

A person may have a beneficial interest arising from:-

• an agreement with the legal owner which has been confirmed in writing, normally in a trust deed - see next paragraph
• contributions to the cost of the property which the law recognises as creating a trust even if there is no written agreement.

Has the person who is not the legal owner made a financial contribution If the non-owner has made a direct financial contribution towards the purchase of the property, s/he may have a beneficial interest, unless the legal owner can show that the contribution was made on a different understanding, or that it was a gift.

Direct financial contributions which could count include:-

• payment towards a deposit
• paying some of the capital due on the outstanding mortgage
• regular and substantial contributions towards the regular monthly mortgage payments.

Indirect financial contributions which are not paid directly towards the purchase of the property are less likely to create a beneficial interest, for example, payments towards household bills and other expenses.

Was there discussion and agreement about beneficial interest If there was no direct financial contribution towards the purchase price, the person who is not the legal owner may be able to establish a beneficial interest if s/he can show that:-

• it was intended by both her/him and the legal owner that s/he should have a financial stake. This intention can sometimes be assumed from the actions of both people, for example, making contributions to the cost of the property, if the court thinks this shows an intention to share the financial value of the property; and
• this intention was explicitly discussed, agreed or arranged between them; and
• as a result, s/he has acted to her/his disadvantage in a way which shows that s/he was expecting to have a financial interest in the property. Indirect contributions to the property, for example, paying household bills, might be an example of acting to her/his disadvantage. Having children and giving up the chance of work would probably not be sufficient.

The above paragraph is only a brief summary of the law. must be referred to a solicitor.

It is a complex area of Law, you question have I got A BI or not is not going to get a yes or no answer from anyone but an opinion based on what information you provide.

You state that you have been to the CAB but they were too busy to speak to you. They were probably dealing with clients in a similar position to you sorry but it takes time to advise someone fully, this is not a quick yes or no question.

I am not sure what the sudden urgency is here, is it harrasement by creditors?

What is it you think they can do to you that is making you panic and ill as you state, they are called non priority creditors for a reason, they have in reallity very little powers.

Are you sure the advice you are getting from the fee charging company is unbiased, they would have very little to gain from you bankruptcy?

What ever agency you choose (and for some immeadiate advice if not practical assistance I would contact National Debt Line),they will need to get specialist support opinion on this and that takes time, however if you are considering Bankruptcy you will need to take this time before acting again what is the worst they can do to you?

rog2

To be honest, and after having read through the notes posted by cabvol - I don't see that you will, legally, have any BI in your partner's house.
You don't say who actually advised you that you 'may' be deemed to have any BI.
Of course it is worth talking to a solicitor, or one of the debt charities, for full clarification, but I would view your situation as a 'tenant' at best.

Good luck.

Dr_Hook

You say that your partner pays the mortgage from her benefits, which is a good start as it demonstrates that she is not reliant on your contribution to the household.

It's also worth asking what benefits she received before you moved in which have ceased as a direct consequence of your co-residence (I'm thinking about housing and council tax benefit) as it could be argued that your contributions consist of a nominal rent and replacement of lost benefits.

Just a thought.

cabvol

The letter you received would it be from 1st credit/Connaught?
unlikly that a creditor would make you bankrupt if you have no assets.

The Official Receiver will look very closely at this to see if their was/is any interest my opinion remains, dificult to second guess what the OR will try to prove, but I THINK it would be dificult to prove a beneficial interest on what you have said. However I think you need to go and have an interview with an independant advice agency, you may even qualify for legal aid depending on your income. the situation over the last seven years needs to be looked at in detail.

Puppy_Boy

thanks for your replies.

ive received a phone call this afternoon from the man i mentioned earlier who is helping me with my situation he did apologise for only just ringing.

he says he has spoken to an IP and has said that i DO NOT have a beneficial interest in the house. he said i have'nt got a leg to stand on. he said that it's best for me to go BR and not go for an IVA! the house is safe. it's my OH's house. the OR will look on the land registery and see the house is in her name.

he did say that the OR might ask/wonder where all the money has gone (my debts) and think hang on a minute your in all this debt and spent some on your OH and she's sat on all that equality and is not helping you to pay it back. that's not fair.

so ive been told my OH might get some awkward questions asked to her.

cabvol: no the letter was'nt from 1st credit/Connaught! i will dig the papers out and let you know. also thank you for the beneficial interest information. it's very helpful. the iva company i rang earlier said they would have an uphill struggle to prove i have a beneficial interest in the house.

peb: your clever having a law degree. woo

Dr Hook: yes my OH loses benefits with me living with her. help with the mortgage (interest), council tax, we have to pay for all her medications as well, dentistry, everything.

her DLA has run out as well. so she got a 50 page form to fill out again. so we are losing that money at the moment.

thanks rog2. it's the charities and iva companies are saying that i have beneficial interest in the house. some have said 50% worth.


i need to ask a question though. when you go backrupt do you have to pay a percentage of your salary each month for 3 years? i'm sure i read that somewhere!