Husband declaring bankruptcy

Taja

It looks like my husband is going to have declare himself bankrupt. He did look at going down the IVA route but they wanted him to pay nearly £1300 per month and we just couldn't afford that so don't have my choice.

The problem is we live in a fairly large house from where my husband works. The house is in major negative equity (about £120,000) so are they likely to force a sale on it? It is in joint names.

I have a few horses but they are mine and NOT my husbands. Obviously my husband won't list them as assets are they aren't his but I keep them at home, can anyone come and try to take them?

Most of the debt comes from a previous business partnership which went belly up in spectacular fashion with my husband left with all of the debts, coupled with a couple of properties that were repossessed following the property market downturn.

We would like to sell our house but simply can't due to the negative equity in it so we are kind of stuck here until things improve.

Where do I stand in all of this as his wife? How would people know what is mine and what is his? We have two cars. One is an old banger which is in his name (which they are welcome too if they want it) but the other is in my name. However, my husband paid the finance agreement on it and whilst the car is registered in my name (and always has been) the finance agreement was in his name. There is about £900 outstanding on it which I don't have to pay it off. The car also has my personal plate on it. Can they take my plate which I purchased myself long before I met my husband?

How much can I safeguard myself and the children's things?

Help

Two4Tuesday

With the house being in negative equity, it's likely that your husband or yourself will be offered the beneficial interest in it, possibly for as little as £1. Check the terms and conditions of your mortgage, as some lenders (like the Virgin One account) may ask for immediate repayment of the entire balance when they learn that one of the mortgagees is bankrupt. That happened to me.

With the car being still on finance in your husband's name, I believe it will be treated as his car. You can put the plate on retention if you are worried about repossession.

Generally speaking, the Official Receiver and the Trustee in Bankruptcy are not interested in household possessions unless they are of particular value, say £500 or more. Items like cars, property are listed on the bankruptcy form when you petition. Other valuables may be declared to the OR during the telephone or face-to-face interview. The OR does not generally make an inspection of your home to see what else you might have there though.

I hope this is helpful.

tigerfeet2006

Just to add to Tuesday's advice please also get in touch with one of the debt charities and get some free, professional advice. Links and no.'s in my sig.

Also have a read of the Bankruptcy Help sticky, there is a lot of useful info. on there.

silvercar

How does your mortgage compare with the rent on whatever would be a reasoble sized property for you to live in in your area? Although negative equity means that the OR will allow you to buy back the beneficial interest in the property, he may not be willing for you to have mortgage outgoings of say £1500 a month if you could rent a home big enough for you to live in for £700 a month. He may not be willing to see that your home needs to be big enough for a few horses.

(Of course, if you are paying most of the mortgage it may not be an issue, but if the bankrupts contribution to the mortgage is seen as excessive compared to a suitable rent contribution, the OR may not be too happy.)

the_bright_side

silvercar wrote: »

How does your mortgage compare with the rent on whatever would be a reasoble sized property for you to live in in your area? Although negative equity means that the OR will allow you to buy back the beneficial interest in the property, he may not be willing for you to have mortgage outgoings of say £1500 a month if you could rent a home big enough for you to live in for £700 a month. He may not be willing to see that your home needs to be big enough for a few horses.

(Of course, if you are paying most of the mortgage it may not be an issue, but if the bankrupts contribution to the mortgage is seen as excessive compared to a suitable rent contribution, the OR may not be too happy.)

I asked this question, the OR may not be happy but what actually can they do? Can they make you move?, If so how, especially as you will need the money to pay for 6 months rent up front that’s if you can get a house being BR + the actual associated moving fees, where are you meant to get the money from. I can’t see them taking it from your other expenses either, as this will leave you without a reasonable living expenditure?

Has anybody had experience of the OR saying your house rent / mortgage is too much, if so what did teh OR do, as I have yet to hear from somebody has been affected?

silvercar

the_bright_side wrote: »

I asked this question, the OR may not be happy but what actually can they do? Can they make you move?, If so how, especially as you will need the money to pay for 6 months rent up front that’s if you can get a house being BR + the actual associated moving fees, where are you meant to get the money from. I can’t see them taking it from your other expenses either, as this will leave you without a reasonable living expenditure?

Has anybody had experience of the OR saying your house rent / mortgage is too much, if so what did teh OR do, as I have yet to hear from somebody has been affected?

It is just a comment I wanted to make as the OP should be aware that it is a potential issue. I don't claim to know all the answers, I just think it is not as simple as the OR having to allow a very large mortgage payment just because that is the current home and there is negative equity.

I would have thought, again this is just my opinion, that the OR could say they would allow (as part of the bankrupts SOA) a certain amount for housing costs based on rentals of appropriate houses in the area. So any excess mortgage payment would need to come from any surplus or from the non bankrupts money.

A reasonable OR would look at the difference between the mortgage and current reasonable rent and decide if this is large enough to make it sensible to take issue with it.

I have read on here ORs taking issue where the sum of secured loans and mortgages is much greater than local rents. This is a similar issue but maybe more obvious if the OR can see a small family living in a big house with enough room for stabling.

Falze

silvercar wrote: »

It is just a comment I wanted to make as the OP should be aware that it is a potential issue. I don't claim to know all the answers, I just think it is not as simple as the OR having to allow a very large mortgage payment just because that is the current home and there is negative equity.

Agreed. Everyone should be awere of any potential outcome and it is possible and was something i worried about when we went renting. There was cheaper houses out there, but they were !!!!!, so we got a nicer house.

Nothing wrong with making people awere of possibilities.

the_bright_side

silvercar wrote: »

It is just a comment I wanted to make as the OP should be aware that it is a potential issue. I don't claim to know all the answers, I just think it is not as simple as the OR having to allow a very large mortgage payment just because that is the current home and there is negative equity.

I would have thought, again this is just my opinion, that the OR could say they would allow (as part of the bankrupts SOA) a certain amount for housing costs based on rentals of appropriate houses in the area. So any excess mortgage payment would need to come from any surplus or from the non bankrupts money.

A reasonable OR would look at the difference between the mortgage and current reasonable rent and decide if this is large enough to make it sensible to take issue with it.

I have read on here ORs taking issue where the sum of secured loans and mortgages is much greater than local rents. This is a similar issue but maybe more obvious if the OR can see a small family living in a big house with enough room for stabling.

Sorry wasnt having a dig :-) and agree that people need to be aware. Just trying to clarify what could happen.

From the 1st of December a BR will not have a surplus. And what if you cant get funds from elsewhere. What can you do if the OR says your rent is too much?

Im going through this at the moment and I am worried sick that the OR will say my rent is too high.

I am also struggling to find out what an average rent is for my area. Does anybdy have any resources / links that show data for this?

kepar

Yes, it happened to us . Because we had a mortgage and a secure loan against the property, the OR deemed that the total was too much with the average rent in the area for a property (3 bed) to suit us. When we went through the SOA he only allowed us the average rent, my wife after paying an IPA would have excess to make up the shortfall. This left us with no spare because we were eating into other allowances as well, so after 2 months we gave up , moved to a rented property and gave the house back. To be honest the OR had been generous with his rental allowance and we moved into a nicer house than we had owned.

Now your situation is different as an extra after an IPA will be taken by the OR and not given to you to use.
After talking as suggested in previous posts to the debt charities put a SOA up for comments, but I feel you may be on a loser with your house, If your husband does go br will there be sufficient funds to pay your mortgage anyway.

silvercar

Now your situation is different as an extra after an IPA will be taken by the OR and not given to you to use.
After talking as suggested in previous posts to the debt charities put a SOA up for comments, but I feel you may be on a loser with your house, If your husband does go br will there be sufficient funds to pay your mortgage anyway.

If it is only the OP's husband going bankrupt then her income may be sufficient to allow her to make up the shortfall in the husband's allowed contribution to housing costs.

I really think you do need an SOA. I'm also not sure on the ORs view of the cost of pets, I don't imagine horses are cheap! Again they are yours rather than your husbands, but your joint income may be worth looking at.

silvercar

the_bright_side wrote: »

Sorry wasnt having a dig :-) and agree that people need to be aware. Just trying to clarify what could happen.

From the 1st of December a BR will not have a surplus. And what if you cant get funds from elsewhere. What can you do if the OR says your rent is too much?

Im going through this at the moment and I am worried sick that the OR will say my rent is too high.

I am also struggling to find out what an average rent is for my area. Does anybdy have any resources / links that show data for this?

Search for the average LHA rates for your area. They are meant to be the average local rent based on private rentals. Another option is to use rightmove.co.uk to search for rentals in your area.