Selling house prior to bankruptcy

Bogart

Apologies for the long post but this is a little complicated and I want to be as clear as possible in order to get some advice.

I have in the region of 100K of debt and after a lot of soul searching I'm planning to start the process to go bankrupt in the next couple of months. My initial plan was to include my property in the bankruptcy rather than trying to sell it beforehand. I'll be moving in with my girlfriend post-bankruptcy so don't really have any issue regarding losing the property.

The house has around 10-15K and I have a couple of creditors who have charges against the property. The total value of these charges is around 35K.

I've today been contacted by a family member who is looking to buy a property and knows my situation. She is suggesting paying close to market value less the cost of some work that needs doing. I would make around £10K paper profit on the sale.

My questions are:

1. How would the OR view the sale prior to bankruptcy? Especially considering we share an unusual family surname so it would be obvious that this is a family member buying the property.

2. There is no collusion or attempt to "do a deal" here. How could I best demonstrate that to the OR?

3. What happens to the £10K "profit" considering there are charges against the property? I'm assuming my solicitor would be responsible for allocating it between the creditors who have an interest.

4. Could any of the creditors block the sale of the property if they felt their interest weren't best represented by it taking place? In fact, would they be required to play a part in the sale? (For example, by giving permission)

5. Overall would it be in my best interests to go bankrupt with the property (and equity) in place, or having sold it?

Congratulations on reading this far :T

Can anyone help me with some advice?

Bogart x

debtinfo

1. As long as it is at market value the OR will be fine, you need seperate solicitors so that it remains at arms length and it is best to do the ground work of showing what the market value is now rather than leaving doubt in the OR's mind

2. A proper survey should do the trick

3. This is where the difficulty could arise, Any chargeholder that is not going to be paid in full from the property could object to the sale

4. see above

5 I see no reason to sell it, it is not going to really help you

Hope that helps

Bogart

Many thanks for the information. My instinct has been to include the property in the bankruptcy to avoid unnecessary complications. You've helped a lot.

debtinfo

Who knows, your family member could put a bid in after the repossession and get it a lot cheaper

Bogart

Good point :T