former mortgage with my sister

DON79

Hi everyone, just thought of something else.

I had a mortgage with my sister which we took out about 7 years ago.

2 years ago, I arranged to transfer the mortgage solely into my sisters name so that me and my OH could get a mortgage together.

It was all legally dealt with by solicitor etc but no money changed hands and the mortgage was in my maiden name too.

Should this be declared on the bankruptcy forms under assets disposed of or should I say nothing about it? Is the OR likely to go back further than that? Or will he even ask about stuff in my maiden name, given that some stupid creditors have not changed my name despite being asked to do so in writing??

My sister means loads to me so if I did declare it and she had to sell it would be awful and if there is even the slightest possibility that it could happen, i can't go bankrupt as I would not do that to her. :sad:

any advice please?

peachyprice

Yes you will have to put it down, the OR can check the land registry to see what properties you have owned.

Was there any equity in the house when you changed it to your sisters name?

You will have to put your maiden and married names on the forms as you have debts in both.

DON79

Hi, there was maybe about 7 or 8 thousand of equity in the property when it was transferred. It did increase but I think has decreased since then, also my sister has twice remortgaged herself to release some equity so its not likely there is much available now.

Will it make a difference that the majority of the debt I have now was incurred after I transferred the property to my sister?

skylight

Don,

It will all come down to the ORs decision on whether or not they think you deliberately signed away an asset to avoid it being taken. If they are interested, they will look at the equity value at the time of you signing over - £7k of equity, 50% would be yours as co-owner, so its £3.5k tops. The OR may think its not worth it, and if your debts were run up after the transfer then you have a damn good argument that you did it at a time you were solvent and you were not expecting things to turn out the way they have etc. Its all ifs and buts though. And really does depend on the OR and their interpretation of the situation.

You have to include it on the forms if it falls within the time frame stated.

DON79

Thanks, I did it because we wanted to buy our own home and they wouldn't let me have two mortgages so I handed it over and got new mortgage with my OH. Things were solvent at the time it was done and we had no problems because we did get our mortgage, although with sub prime lender due to some of my OH's credit problems previously.

If the OR does consider it to be of interest, can I withdraw from going bankrupt at all once the process has been started?

I just really don't want my sister to have to bear the cost of any of this as I know she could not afford to pay out even 3.5k for the equity at that time.

skylight

You cannot withdraw from the BR process once it has been started, unless you can clear all debts and fees immediately, which you normally can't as you wouldn't have gone BR in the first place!

Could you be sneeky (naughty) and claim she paid you the £3.5k in cash at the time and you spent it on a holiday or something similar thats not traceable - like an expensive pedigree dog thats now dead??? It may work (it may not)???? But also depends on what the legal paperwork from the transfer says about ££.

DON79

as far as i can remember the legal paperwork doesn't say anything at all about transfer of any money between us although we did agree just between us that she would give me about £2000 when she got the remortgage through in her name. but this we put on hold cos she had legal fees to pay.

But I could always tell the OR that we spent it on moving costs. Cos we probably did spend that much given it cost us about £700 for the movers, £600 for new carpets and some more money besides for new furniture etc and baby stuff at the time as our baby was just 2 months old when we moved.

DON79

Am feeling a bit down now. I had felt happier the past couple of days knowing that maybe BR would help with my financial worries but I really don't want to take any risk that my sister could be forced to sell her home. I don't see why she should pay for my stupidity really.

I don't know if the OR would consider the 3.5K equity at the time to be worth pursuing over debts of £40,000+. Also could he pursue for more than that given the flat now worth about £52K but only about £32k when it was transferred (flat was bought for £25,500 in Scotland, hence the low price tag).

Anyone got any idea how I could find this out without actually starting the BR process or anyone had a similar situation of having just transferred mortgage couple of years prior to going bankrupt?

Thank you.

peachyprice

There isn't actually any way the OR can prove how much the house was worth at the time of the transfer, how would they know whether there was £8k or £2k of equity as no sale took place, it's all down to your word, if you say you think there may have been £3k what can they say.

I think the worst that could happen is that the OR could ask your sister for half of the supposed equity, which, if she hasn't got, they can't make her pay.

chelseabun_3

Hi Don,
I agree with Peachy - they can't make her pay what she hasn't got.

But tbh if you can prove your debts built up after the transfer to your sister, then I can't see that the OR could justify going after the money. Your idea about moving costs is a good one!

I don't think anyone on here can give you a definitive yes or no - it all depends on the OR you get, but I really don't think they can take anything from your sister. They certainly couldn't force her to sell up!

Hope that helps, CBx;)

PS The flat's value now doesn't matter, as it belongs solely to your sister. They can only go after the equity that was in it at the time it was transferred.

DON79

Thank you all for your comments, had a chat with OH and he said same thing, couldn't force my sister to sell and can't force her to pay up. so have tried preparing an soa (only a partial one sort of) and would appreciate any comments on it. Thanks very much.

mortgage £715.71
council tax ` £89
water £33
tv lic £11.61
home ins & mortgage payment protection £57.86
life ins £20.87
sky £20
Gas & Elec £38 (likely to increase soon)
bt £12
petrol £60
food £225
road tax £20
car maintenance £20
holiday £40

£1363.05


personal - donna

mobile £10
life ins £24.25
travel £15
clothes £20
dentist £20
hair £15

Total £104.25


income £452
tax cr £40
OH’s contribution £1001.87

Total income £1493.87

Total exp £1467.30 :eek:

Remainder £26.57

Latest total estimate creditors £40.783.00 :eek: :eek:

Any thoughts I would really appreciate, thanks.