Can bankruptcy lose you a house in these circumstances?

davebaldwin

Hi!

I am new to this site and hope I can post a question and this is the right place to do it.

I am asking this question for my other half's mother:

She owns a house and has had her common law partner living with her for 10 years +. She has just found out he is in financial trouble and is going for bankruptcy which is a complete surprise to her. She is obviously worried that they can claim the house from under her feet. The way I see it is that if she "had a somewhat rocky relationship with her other half, to protect her house for her children in future years, she had a tenancy agreement between her and her other half, albeit for £1 a year, from when he moved in, it means that he is a tenant, and even if he is her other half as well, this would mean they cannot claim the property from her?"

I look forward to your answers as the worry is causing her a lot of distress at the moment and it would be nice to put her mind at ease if that is right.

Thanks!

Xbigman

If the house is in *her* name only and the debts are in *his* name only, then the house cannot be touched at all. The only ramifications for her is if they have any joint financial products in which case his bankruptcy will trash her credit rating.

As for his being a tenant, that was a waste of time. Every court in the country will see that as the fiddle it is. It would not stop him trying to claim a financial interest in the house if they split up and it would still be illegal for him to claim benefits as a tenant, which he is not.
Regards



X

Astaroth

Yes, the fake tenancy is never a good move.

Has he lived in the property for the 10 years? Does he maintain another property? Does he truly contribute to the paying for the home other than the joke £1?

Debt_Free_Chick

I am not 100% confident that the house is safe.

It depends on whether - over the past 10 years - he has acquired any "beneficial interest" in the property. And this depends on what he has contributed. It's the same question that would arise if they were to split up i.e. is he entitled to a share of the property?

If the answer is "yes", then it's likely he has a beneficial interest in the house and the OR could attempt to claim it. However, mother could buy that interest from the OR. Although I am sure she would feel that she is simply buying part of her own house back!!

I don't think it's terribly straightforward and I think there is a possibility that the house could be at risk - but it really depends on the particular circumstances.