Beneficial interest

damndebts_2

Hi all. This is my first post. I am considering bankruptcy but have one sticking point. I have lived with my girlfriend since she bought her house 10 years ago. Its all in her name, she paid all of the deposit, and initial home improvement costs (approx (£5/10,000). I have contributed to half the bills for most of the time, except in the last 1 1/2 to 2 years when I was self employed when I didn't have enough income some months. Current mortgage is £88,000. I realise that the OR would see it that I have a beneficial interest. Understandably my GF does not want to lose the house and so not keen on me going bankrupt as she could not raise any money to buy out the BI and so prefers I get taken to court over the unsecured debts and so get CCJs and pay those. There would be some equity in the property depending on what value was placed on it - I estimate that it could be £12,000 to £32,000. My questions are;

1. Do I get a value from an estate agent based on selling it as quickly as possible?,

2. Has anyone actually gone through or going through the process? - what happened and what were the timescales.

3. Has/will the OR insist(ed) on selling the property now?

4. With CCJs - how are the monthly amounts you pay back worked out and and is it till they are paid off completely? My earnings are approximately £800/1000 pm net. It fluctuates as my work is 95% casual, though I expect to have a permanent job in a few months. The income will be about the same as above. My outgoings are around the same as the income.

Many thanks.

skylight

BI - its not as simple as that! Your OR may, or may not decide that you have BI and they may decide that you have a very small BI or a large one (Very unlikely as nothing is in your name).

Even *if* the OR thinks you have BI, then its a maximum of 50%, so 50% of £12k is only £6k and that is not worth the OR chasing for, so should allow it to be bought for £1 plus £221 fees. This is all IF the OR decides you have BI. Thats not a definite.

ORs rarely force a sale. They are not intent on placing you and GF on the streets and they cannot really force a sale of something that is not even yours to start with.


You should get proper advice though. CCCS or Payplan are your best contact. If a DMP is better suited to you, then they can help too (and its free advice/service)

Dez-Titute

Hi damndebts & welcome,

As far as I can see you have no interest in the property and as such when completing your SOA you should avoid documenting anything that could be considered as contributing to the mortgage.

As Skylight says contact one of the Debt Charities,CAB,CCCS or National Debtline.

Cheers Dez

damndebts_2

skylight wrote: »

BI - its not as simple as that! Your OR may, or may not decide that you have BI and they may decide that you have a very small BI or a large one (Very unlikely as nothing is in your name).

Even *if* the OR thinks you have BI, then its a maximum of 50%, so 50% of £12k is only £6k and that is not worth the OR chasing for, so should allow it to be bought for £1 plus £221 fees. This is all IF the OR decides you have BI. Thats not a definite.

ORs rarely force a sale. They are not intent on placing you and GF on the streets and they cannot really force a sale of something that is not even yours to start with.


You should get proper advice though. CCCS or Payplan are your best contact. If a DMP is better suited to you, then they can help too (and its free advice/service)

Thanks for that. I have spoken to Payplan but they were of the opinon that OR would go for a forced sale even if there was £5000 of equity and possibly more than 50%, so I am now more confused

I am going to speak to CAB though I fear the advice will be the same.

Thanks again.

deedee_3

Please get more advice on this. I feel Skylight is right and Payplan are just putting the worst case scenario. The OR cannot go for more than 50% of the equity.

skylight

Its all ifs and buts. The problem with BR is that no-one knows what the OR is going to do until you actually get there. Payplan can only advise you to the letter of the law as thats there position - here is a bit different as its experience.

But all this hinges on whether or not your OR thinks you have any BI in the property in the first place. Why on earth though, Payplan would think you have more than a 50% stake in a property that is not even yours, totally mystifys me.! Even if you were married, co-owned etc it would not be more than 50% (unless already legally agreed).

peachyprice

Another thing to bear in mind when working out how much BI you may have is that it's BI isn't calculated on the amount of equity left after the mortgage, it's the amount of equity based on the purchase price and increases since you've lived there.

So unless your GF had 100% mortgage there's no way you can have 50%. For example, if the house was bought for £100K and your GF's mortgage was £85K, the BI calculation starts at £100k, not the £85k mortgage value as the other £15k is 100% your GF's, so your BI is already reduced by 15%.

chelseabun_3

damndebts, sorry to hijack your thread but this is very useful info for me too. Can I ask whether the mortgage payment should go on the SOA with it made clear that BR person is making no contribution to it? Or is it better to not put the house on the SOA at all? If you don't put it on, is there somewhere else to explain the situation re ownership and stuff? Or does it have to go on as it's where damndebts is living?

Our situation is a little different in that we don't live in the house I own but have rented it out. It's in negative equity, and OH's name isn't on the mortgage.

Any advice appreciated!

chelseabun_3

Ooops, sorry something went wrong there, post should be above ...

peachyprice

The house you are not living in would only have to go on your I&E under the assets section, and the whole mortgage would go only on your I&E, together with the rent you receive as income. Your OH doesn't have to put any of this on his forms, just the rent for the house you actually live in.

If you were living in the house that you own your OH would have to put the mortgage payments on his I&E, it would be treated as if he is paying rent to the owner (you), so the house would not have to go in the assets section of your OH's form.

Clear as mud!:D

chelseabun_3

Thanks Peachy! That helps, but one more question (sorry!)

As it is only OH going BR, does that mean we don't mention the house at all, just the rent on the one we're living in? If the OR finds out about it, would we be in trouble or is that ok?

Confusing!!:rolleyes::D