Help!! Will OH's bankruptcy affect my house?

4kids4cats

Posting on here in a panic. My OH is seriously considering bankruptcy - has the forms and has finally saved the fees. He had an IVA which he stopped paying. He is living with me in my house - it is in my sole name after being signed over to me by ex-husband, before I ever met OH. He has lived here nearly 2 years and pays me rent each month. I pay my mortgage over the counter in the building society with money from several sources as my salary doesn't cover it. I do sometimes use his rent money, but also maintenance/child ben/tax credits - whatever arrives in time.
Could they say he has a beneficial interest in my house? Could they make me sell? I couldn't increase the mortgage because it's ridiculous already and no-one would lend me more.
I have 4 kids to support.
Any advice really really welcomed as we are on the point of him moving out, but neither of us really wants that.
Thanks.

debtinfo

ok, is their any equity in the property, how long have you owned the house, when was it signed over by the ex

4kids4cats

There is about £40 -£50K equity in the property. I have debts of my own (currently in a DMP) which come to £21K. Ex- and I bought the house in 2003 and he signed it over to me in 2004. Thanks.

debtinfo

It is down to the OR to prove he has an interest rather than you to prove that he doesent, He may have a small interest but you would argue that since he has been contributing the value of the home has gone down not up. You will have to see what the OR says, but they would have to go to court to prove that small interest so they may feel that it is not worth it

4kids4cats

Thank you for that. It gives me a better idea of the likelihood of it happening. If they did prove he had even a small interest, do you know if I could be forced to sell to pay it? I really don't understand how it all works.

tigerfeet2006

No you would not be forced to sell. You would have to try and raise the money that would be your OH's interest in the house to pay to the OR. The OR MAY be open to a little negotiation on the amount, but it varies between OR's.

4kids4cats

Thanks Tiger feet. But there's no way I could raise any money - I am just about scraping by. The budget I did for my DMP showed me as having £50 disposable income which now pays for the DMP - and no one anywhere would lend me money. Not sure what would happen if the OR wanted me to pay up.

alastairq

He has lived here nearly 2 years and pays me rent each month.

does he have a rent book?

alastairq

Much will depend upon whether the OR considers your OH to 'have an interest' in the house......after only two years?

The OR will have up to three years from date of BR to 'prove' any beneficial interest in the house...

I suggest, getting a valuation from at least 3 or 4 agents.....based upon the premiss of a 'quick sale'...and use the lowest as a negotiating point.

The less equity there is...or , even, negative equity, the less the BI will be.

Don't forget, once OH has declared BR...then all his debts will be wiped.....so there ill be a possibility of future additional income for him to purchase any beneficial interest.

4kids4cats

Hi alastair, no he doesn't have a rent book. All the things I now realise we should have thought of!
So the OR has up to 3 years after BR to prove it? Oh my God, will this never go away?
As to OH having more disposable income after BR, well, he hasn't been paying a penny towards any of his debts for over a year now. I found this out in April. So he won't be financially better off, but he will be able to have a fresh start. I think it is likely he wll move out now anyway, but I suppose it is possible they could still try and prove BI? I know this can happen in cases where it's more clear-cut.
Thanks everyone for your replies.

StuieUK34

Just reading the above makes me think of that in a reverse way, here goes:
I say i live at No 10 downing street london, and have been resident there for 2 years..
I pay the house owner a contribution each month towards rent which is not registered anywhere, and shows no proof of contributing towards the mortgage on the house.

So therefore, based on the above comments, i have an interest in that house ? Guess David Cameron wont be to pleased that he is gonna be losing government HQ!!!

I'm no BR expert, but from how i understand law, a person doesnt have the right to seek part ownership on a property unless they can prove or some way have they have contributed towards the mortgage in an official way with proof... When sole owners have someone live with them, and receive money, whats to say the money you receive from your partner doesnt pay for takeaways each month or your personal gambling, etc etc
I was told that when i go bancrupt, the OR will take into consideration the joint income to the house to work out how much i pay back each month... If the OR said they would take my partners house, whats to stop her kicking me out there and then meaning the OR has zero grounds to chase that house...etc etc
Doesnt make any sense that a OR can chase an asset not belonging to a soon to be BR person.