OR Interview this morning-not good

sw09

Hi all,
I wonder if somebody can help me? A brief history of my/DH circumstances are he was declared bankrupt on 29th September. He has today had his interview with the OR which, to be frank, didn't quite go as we expected.

We own our home and we do have some equity in it, though in this climate we do not know exactly how much. It is a joint mortgage so we thought well, at best I could maybe raise funds to buy the BI and at worst, we'll sell and i'll have some money from the sale for us to start again.
The OR today asked about the deposit we initially put down when we purchased the house (5 yrs ago) and it was my DH that put down the deposit. Because of this the OR is saying that ALL the BI will be my husbands so if we sold I wouldn't get a penny????
I have paid the mortgage for the last 2 years so how can this be fair?
Is this really right? If if it's the marital and family home surely it can't be right that I would get £0 proceeds from a sale.
I so upset and confused. I've come to terms with the fact we will have to move our family to a smaller house but just don't know how we'd manage if I wasn't able to get anything out of the proceeds of the sale.

I know I probably haven't explained this properly, bu i've only had it second hand from DH who isn't the best at repeating his conversation.
Now we're waiting to hear whether an IP is going to be appointed. Is this a bad thing if they do?
Any advice would be appreciated.

tigerfeet2006

I agree with you and if you have been paying the mortgage then you will have some BI.

Have a chat with National Debtline and get some advice on this but it may be worth writing a letter to the Assistant OR and explaining you don't agree with the clerk your DH spoke to and why. If you don't agree with anything you don't have to accept it, the clerks are not always right.

MicheH

Just to echo what tigs said really, our interview was conducted by an examiner not the OR, some things she wasn't able to advise on and had to wait till the next week when her boss (I guess thats the OR ?? ) was back in work. Definately worth a check

debtinfo

All the interviews are done by the examiner who are highly trained, although some final decisions are made by the OR, especially if the bankrupt disagrees with the initial decision.

As regards the BI, you should have some equity if you have been paying the mortgage for the last 2 years. However most of what is paid to the mortgage is interest and does not affect the equity position that much whereas the initial deposit affects the equity position alot more. So although you will have some equity it probably a lot less than your husbands

blind-as-a-bat_2

debtinfo wrote: »

All the interviews are done by the examiner who are highly trained, Not always, trust me, in fact you dont need to , you should knowalthough some final decisions are made by the ORagain not always, if the examiners an line manegers can avoid it, as it looks bad on them, especially if the bankrupt disagrees with the initial decision.

As regards the BI, you should have some equity if you have been paying the mortgage for the last 2 years. However most of what is paid to the mortgage is interest and does not affect the equity position that much whereas the initial deposit affects the equity position alot more. So although you will have some equity it probably a lot less than your husbands

Ok now you have lost me, what has BI inBR got to do with BI in real life, unless you get a git of a partner


OP, i am not sure what you are upset about, how much equity is there, and how is it made up

You seem to be getting hung up on something, that right now does not seem to matter, unless you are seperating and want your share.

Dont let the cold way the IS view assets upset you, unless there is a reason outside yor OH's BR;)

sw09

Thanks for your replies yesterday, I tried to reply last night but the site was down.
In answer to blind-as-bat, maybe I am worrying about nothing(I hope!) I thought that, lets say for arguments sake we have £20k equity in the house, my DH's BI would be approx £10k, therefore this would be the figure I/family would be looking to find to by his BI.
If, as they are saying to us, I don't have any BI then his BI would be £20k-this much money would be impossible to raise. So, that's why it matters to me, as we would then have to sell the house and have nothing left from the proceeds.
Have I got the wrong end of the stick?

debt_doctor

For beneficial interest to be 'established', if the two parties disagree (you and the OR) then that involves costly solicitors, and the costs are picked up by the insolvency service, via the BR's estate.

If I were you I would stick to the claim you have made of 50%. If they dont agree or compromise then the IS will have to legally quantify and prove their claim to the court. Unless you lodged a deed that expressed otherwise at the time you both purchased the property then the assumtion is 50 % split unless substantially proven otherwise. He provides deposit, you pay the mortgage I feel, maintains that balance.

33.49 Bankrupt’s interest in property - disputed
Where the bankrupt occupies a property with a partner (whether or not they are married or civil partners), the official receiver may have to consider a claim from the ‘solvent’ partner that they are entitled to a (greater) share of the property. For example, disputes can arise in respect of jointly owned properties where the partner believes that they are entitled to more than 50% of the beneficial interest or, in a solely owned property, where the partner believes that they have a financial interest in the property.
Where the official receiver as trustee is dealing with a jointly owned property, he/she should also consider whether the bankrupt is entitled to more than 50% of the net equity.
The conveyance of a property into joint names may be considered conclusive evidence of an intention to hold the property in equal shares. The exceptions to this are where one of the parties can demonstrate to the court proof of fraud or mistake in the conveyance or where there exists a declaration of trust of the beneficial interests. A declaration of trust should usually be made at the time of the conveyance, but may occur on the happening of a specific event which would disturb the shares in which the property was held. There is no requirement to lodge a declaration of trust between the legal owners of the property in respect of their beneficial interests with HM Land Registry as the Register is only concerned with the legal title and not the division of the beneficial interest by the legal owner(s). The official receiver should request documentary evidence in support of any disputed claim concerning the beneficial interest in the property whether it relates to the bankrupt, or solvent partner’s share.


33.67 Calculating interests – jointly owned property
The usual declaration will be that the bankrupt and other owner are joint tenants in equal shares. However, on the making of the bankruptcy order the beneficial joint tenancy will be severed and any increase in value of the property as a result of expenditure by either party should be taken into account to calculate the respective beneficial interests of the parties URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter33/part2/Part%202%20notes.htm#20#$33347#20"]note 20[/URL. If no declaration has been made, the principles outlined in paragraph 33.58 relating to solely owned property should be applied to determine the interests of the bankrupt and his/her co-owner(s). See paragraph 33.66 above.


33.58 Types of contributions – solely owned property
Any contributions to the deposit and/or the mortgage should be considered in the calculation. Where the property was purchased with the assistance of a mortgage, the common intention of the interests of the parties in the property may be inferred by the source of the deposit and the arrangements for repaying the mortgage as explained below in (a) to (e):
(a) Contribution to deposit - If the bankrupt received assistance from another (“A”) in payment of the deposit, it may be inferred that it was the intention of the parties that “A” would share in the beneficial interest. It is likely that “A” will gain some interest in the property, unless the assistance was given in the form of a gift or a loan.
(b) Contribution to deposit and mortgage payments - If “A” made direct contributions to the mortgage repayments from his/her own funds and had provided some or all of the deposit for the purchase, it may be inferred that his/her interest in the property will be increased.
(c) Contribution to deposit and household expenses - If “A” provided some or all of the deposit for the purchase, did not make direct contributions to the mortgage instalments but paid other joint household expenses from his/her own monies, it could be inferred that these payments were intended by both parties to be a contribution to the price of the property. Accordingly “A’s” interest in the property will be enhanced by that contribution.
(d) Contribution to mortgage only - If there was no contribution by “A” to the deposit, but the bankrupt received assistance from “A” in payment of the mortgage repayments, “A” will accrue an interest in the property provided that the contributions were direct, regular and substantial.
(e) Contribution to household expenses only - Similarly, where the payment of the household expenses by “A” was substantial, an interest may accrue to “A”. The extent of the interest will depend upon the amount of the contributions and what can be inferred from the conduct of the bankrupt and “A” on how the beneficial interest would be shared.

DD

sw09

DD,
Thank you so much for this reply. I'm hopeful that it won't get so far that solicitors etc will be involved. At the moment we're waiting on whether or not an IP is going to be appointed, I presume it will be him/her who decided what level of BI to pursue? Do have any idea of what sort of timescale we would be looking at for this to all happen?
Thanks again,

tigerfeet2006

Unfortunatly it is a "how long is a piece of string" question. They have a maximum of 3 years to deal with it and it depends whether the IP is in a hurry to get it sorted.