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A bankruptcy nightmare

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A few years ago my wife took a short term job with a close friend who was in the property development business. He was based in Portugal and wanted to see if she was suitable to manage his UK portfolio. To this end, she signed some forms which made her a nominee on a mortgage for a huge property in the West Country. Yes, it was naive and stupid but the promise of a full time job managing a UK property portfolio was very tempting.

Anyway she signed the forms and all seemed OK. Then the 'friend' went missing for a while. Unbeknownst to us he had used my wifes details to gain a second charge on the property to get money for refurbishment. All the while the mortgages were being paid. The place has 8 huge bedrooms, a chapel, a library, 350 acres of land, a private beach, a 55 foot dining room, marble floors and staircases....the list goes on. So, unknown to her she owned this place. Then this guy sold it for £1.4m. The buyers wanted immediate posession but hadnt sold their own place. The friend then granted them a licence for posession for 6 motnhs allowing them to complete, for the non-refundable fee of £250k, deductable from the sale total.

Yep, you guessed it. He disappaeared witht he £250k and the second charge company came after my wife. The buying couple pulled out when the 2nd charge holder got a posession order but agreed with the 2nd charge holder that this would be a lever out of the contratc they had signed so they could then re-buy from the 2nd charge holder for £800k. The propoerty costs them £1.05m instead of £1.4m. Trebles all round.

My wife during this time had forgotten about the whole thing as she hadnt heard from him since 2005. She works part time to supplement my salary. Last October, her world crashed when the judgement was set against her for the 2nd charge plus interest and costs taking the 2nd charge from the originalk £280 to a sum in the region of £790k increasing at £6.6k per month. The buying couple also decided to sue her for their money despite us never having seen it. Since then we have rung up a £10k legal bill trying to unsuccessfully defend my wife who has been the patsy in this. We even have proof of the £250 posession contract fee being paid (fenced?) to a solicitors firm for monward payment to this 'friend'.

Last friday she was declared bankrupt, with the sympathies of the judge who could see the fraud but without police inolvement can't do anything. The 2nd charge holder wont involve the police (presumably because they dont want the publicity) so we are stuffed. Its a relief in a way because the only asset my wife has is her name on the house deeds, although these were only added in Jun07. For the previous 7 years at this house it has all been in my name. We are also some £50k in negative equity at the moment, plus I have been advised that as I have bought in 3 times her salary and have proportinately done this since we met and moved in together it is unlikely any creditor could claim her share of the house at 50%.

So its over now, all the grief and hassle. The OR can look into our finances and see we have been mugged off, as can any trustee in bankruptcy. Who knows they may even be prepared to chase the real culprit, although he has gone to ground again and we have subsequently discovered he was made bankrupt in 2004 - explaining an awful lot of why he used my wife. Never trust anyone, no matter how close friends they seem.

One last thing....this morning we have recived around 6 letters from compnaies offering help on annulling the bankruptcy, protecting us from reposession (which they cant do anyway as I own the majority of the house) and all sorts of other comforting stuff. Can anyone give adice on these companies. Are they legit, or just ultures on the make? And how did they get my wifes name?

Its a very complex legal story, but just writing itn has been cathartic. Be warned about close friends!
Regards, Arnie

Comments

  • tigerfeet2006
    tigerfeet2006 Posts: 14,030 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Sorry to hear about your problems.

    Don't worry about the letters, file them in the bin. These people are just scum who trawl the register and prey on people who are venrable. I am told that they also make good small animal bedding.:D
    BSCno.87
    The only stupid question is an unasked one
    Loving life as a Kernow Hippy
  • Tinytim
    Tinytim Posts: 417 Forumite
    As Tigerfeet says, the letters are from vultures who will have got your wife's name from the register. It really says something about our priorities in this country sometimes when our police force isn't interested in something like this :(

    As far is the house is concerned, the division of shares is likely to be academic if you are in negative equity. All things being equal, at some point the OR should offer you the option of buying your wife's beneficial interest in the property. If you are negative equity, this will cost you £1 but you will have to meet the OR's legal costs which will range from a minimum of £211 to a maximum of just under £500. As the property is owned jointly, and it would be you buying the interest, I think it's the £211 figure which applies.

    Lastly, welcome to the board :)
    BSC 271
  • MicheH
    MicheH Posts: 2,631 Forumite
    Gosh, makes some reading that does. For us all bankruptcy brings some sort of relief to our situations but my goodness, what a complete, scary nightmare. Have a lovely life you two. I do hope your wife is ok
  • fiveyearplan
    fiveyearplan Posts: 10,145 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Throw those letters away - they are vultures out to make a buck. The only way you can annul a bankruptcy is to pay off all the debt that was included in the BR plus OR's fees.

    :j :j


  • Tinytim wrote: »
    As Tigerfeet says, the letters are from vultures who will have got your wife's name from the register. It really says something about our priorities in this country sometimes when our police force isn't interested in something like this :(

    As far is the house is concerned, the division of shares is likely to be academic if you are in negative equity. All things being equal, at some point the OR should offer you the option of buying your wife's beneficial interest in the property. If you are negative equity, this will cost you £1 but you will have to meet the OR's legal costs which will range from a minimum of £211 to a maximum of just under £500. As the property is owned jointly, and it would be you buying the interest, I think it's the £211 figure which applies.

    Lastly, welcome to the board :)

    The kindness of people never ceases to give me hope. Thanks to all the respondees thus far, I'm sure the shredded remnants will be useful for a nieces hamster!

    The situation was ery scary and yes, my wife was very naive and gullible, but when the first judge hinted at fraud even he had to agree with me that my wife would be the worst fraudster in history as all she has ended up with is bankruptcy and grief. This other chap has walked off with £250k (although we suspect others might have fallen for the friendship routine). Up until this my wife had been Chair of Governors at both local schools.....becuase of this she has had to resign and that more than anything else has broken her heart. Reading these boards has been an eye opener and I m warmed by the support and advice given. I see more 'community' here than in most towns and villages.

    One thing has happened and that is she has been inspired by this event, and seeing others in the same predicament she has resoled to learn every aspect of debt and bankruptcy law so that she can help others who can't see a future.
    Regards, Arnie
  • crowman19
    crowman19 Posts: 371 Forumite
    Throw those letters away - they are vultures out to make a buck. The only way you can annul a bankruptcy is to pay off all the debt that was included in the BR plus OR's fees.

    I was made BR last wednesday
    morning and had one of these letters through my door by friday morning. They must have people constantly checking the insolvency register to send them out that quick.
    Bankrupt 07/10/2009

    Early Discharge 20/05/2010
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