87k in Unsecured Debt

87k

Hi,

I am married and I split with my wife this summer but decided to give things another go as our child has just been born. The main reason for us splitting up was due to my debt/spending problem. As a conseqence I am currently have 87k approximately in Unsecured debt in my name only - I was also made reduntant in Aug 05 and haven't worked since - currently on JSA. Even though we are giving things a go I no longer live with my wife as I now rent a one bed flat hoping things will get better. (sorry about the life story)

We have a house together in joint names with 55k approximate equity and the house is currently on the market for sale.

I am basically getting to the point where I can no longer keep my repayments on my loans going and have defaulted on a few payments but have managed to do a deal and reduce some repayments as I sold my car and motorbike to keep repayments going. The mortgage repayments are upto date and have no defaults and the mortgage company is totally happy as they always get their money on time

Just to recap all my debt is unsecured.

If I made myself voluntary bankrupt in Jan/Feb 06 can the OR take my half of the equity from the house? Is it possible to gift this equity to my wife before I go bankrupt?

If we were able to sell the house before I was to go bankrupt and I then gifted my half of the equity to my wife could they then chace my wife for this?

I don't want my wife whether we are together or not to suffer because of my finicial stupidity - we have a child to bring up and I want all the equity to go to my wife so that whatever happens she and our child will be finicially secure.

jonesMUFCforever

If you have a joint mortgage and you deliberately put the house in your wife's name it is more likely that you both will lose it. When the xmas holidays are over you need urgent legal and financial advice.
If your mortgage payments are up to date (how will you keep up payments if wife has just had a baby?) a court might not throw you out if your trustee in bankruptcy asks for the house to be sold to pay off your debts. The fact that your debts are un secured does not come into the equation.
Please please please get proper advice before deciding your next course of action.

87k

Thankyou. I will arrange to see someone in the new year.

If I sell the house before I go BR and I gift the equity to my wife can they then seize my half of the equity back from my wife?

jonesMUFCforever

Yes most certainly. This is 100% certain. That is why I said you MUST get legal advice to see what measures you can take (if any) not to lose your house.

1313

Normally if you go BR only 50% of the equity will be taken into account. As the other 50% belongs to your OH.

Keep up paying your priority debts, and the non priority debts just pay them a small amount to show willing. This will certaily help your outgoings and give you time.

Do you need to sell the house?

87k

Afraid I do - as the money I used to earn is obviously no longer available due to being made redundant. Obviously when I get another job again probally looking at a 5-10k paycut being realistic.

So i won't earn enough to keep the mortgage afloat and all my other debts - the only way out of this mess is to sell the house and based on what you have just told me is to give half the equity to my wife/baby and i guess the OR will take the rest of my equity.

paulw_3

with roughly about the same amount of unsecured debt as you and a property in negative eguity and mortgage arrears i would say the priority is finding a job fast. Don't worry about the unsecured creditors there is little they can do. They cannot force entry into your home, they are reluctant to take legal action if you pay them a little each month(mine get five pounds each). If you sign over your half of the home then of course they cannot chase your wife, the loans are in your name not hers. Unsecured debt is just that unsecured, if you dont sign over your half of the house, the most they will do is put an order on your 50% should the property be sold. My partner stopped paying the finance on their car and an order of 30,000 has been put on their 50% of our home when it is sold. good luck but try not to loose sleep.

1313

Put a full Inc/Exp here and then we can look at the facts.

87k

Thank you for all the advice.

Been to see a Insolvency Practitioner and he has me going for an IVA, failing that then BR is the only option.

Just one more question please

How is the equity determined in a house.

Our house cost us £235k, we put a deposit down of £35k (which was my wifes money) and we have been made an offer on the house for £248k.

Lets say the house sale goes through and we clear £48k we will then have to subtract

1.5% for estate agents = £3720 approx
Solicitors = £600 approx
Wifes initial deposit = £35k

Would leave roughly around £9k.

Would the OR see it as the £9k as equity or the £48k minus selling costs - even though the initial £35k was my wifes money?

jonesMUFCforever

Can you prove without a shadow of a doubt that the money came from your wife?
That would be a start, but again you need proper legal advice. Ask your solicitor dealing with the sale.
By the way if you sell where will you live?

87k

We will rent a house and start again - either buy a house in my wifes name or rent for a few years and wait for the property market to go pop.