Husband Bankrupt - House reposession

kb92830

We are friends of a married couple (not the best marriage I think), he was made bankrupt approximately 3 years ago stemming from debts to the Inland Revenue.

The wife came down today to find a for sale sign outside the house. She had nothing to do with the bankruptcy. The house is in joint names with a joint mortgage. I believe there is also some mortgage arrears on the property so to be honest she is not sure if the the sale of the property is being driven by the bankruptcy or the mortage arrears, I have told her to find this out.

I appreciate if the sale is being driven by the mortagage arrears she has no redress as the arrears would be seen as a joint liability. But if the sale is being force by the bankruptcy what can she do. The for sale price appears to be well below the market value, does she just have to accept that the house will be sold and she will only recieve very little or nothing at all even though the bankruptcy is nothing to do with her?

She currently has no income so to buy her Husband out is not possible, she is frantic given she has no income, is about to lose her home and there appears to be nothing she can do but watch as she loses everything.

Ineedaname

Unfortunately she will be liable for any shortfall if the sale price doesn't cover the outstanding mortgage amount.

If, by chance, the sale price does cover the outstanding mortgage, then she could be entitled to a proportion of the equity, depending on personal and financial circumstances dictating how much percentage equity she can claim to have in the house.

She could always call either the estate agents or the mortgage company as she is a joint owner and entitled to know what is going on.

kb92830

Thanks for the advice, as I said if it is due to the mortagage arrears I know she is not in a position to do anything as she will be jointly liable. She has to take some responsibility for this as she has never tried to help sort out the mess following the bankruptcy and subsequent unemployment.

However, I was more interested in the bankruptcy side of it as it seems harsh on her if she now loses her home due to her Husband debt with the Inland Revenue especially if they are forcing the sale at below market price.

Ineedaname

Regardless of why the house is being sold, she will still be liable for any shortfall. That's the deal when you take on a joint mortgage, there's no get out clause.

The only way I can see the bankruptcy could be forcing the sale is if the Official Receiver believes there is enough equity to warrant forcing a sale. It won't have anything to do with HMRC as they are now reliant upon the OR recovering any money to cover first their fees and then distribute fairly amongst the creditors.

If there was some equity and the husband couldn't afford to buy back the beneficial interest from the OR then I think the wife should have heard from the OR, offering her the chance to buy back the BI instead. But that possibly depends on whether the OR has her contact details from the husband.

I take it they are no longer living together?

tigerfeet2006

Get her to ring one of the debt charities and get herself some advice on what is happening and on her finacial problems. They may well suggest she goes BR herself.

• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)

Others:

• Business Debtline - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

Maybe get her to sign up to MSE and talk to some people who have gone through what she is.

kb92830

Thanks again for the advice and info.

Ineedaname - they are still living together but he is away on business (and guess they are not really talking at the moment), it appears when she went to visit family recently he allowed the estate agents in to take photos etc. To be honest she has not done anything to help herself in the last 3 years in terms of trying to find out what the actual position is regarding the bankruptcy etc. I think she knew all this was coming but was not expecting to wake up the other day with a for sale sign outside.

I have suggested she start with the CAB to find out her real position in terms of equity etc, hopefully they will guide her through it, thats if she manages to get her head out of the sand and actually realise she needs to do something.

stokesley

I'm no expert, but believed that the lender could not sell the house until they had vacant possession, changed the locks etc; from what the OP has been told, the wife is still living in the house.

Even if I'm wrong, surely letters have been delivered addressed to both parties advising of a potential possession and surely she has opened some of these?

Notwithstanding the above, if she simply rings the agent and asks if the sale is a repo, they have to tell her.

Ineedaname

Very good point Stokesley - so possible that the husband has put the house on the market himself, whether the OR has any involvement is still anyone's guess until the wife can find out.

Based on the experiences of a friend of mine recently, I believe the wife can prevent any viewings as she is a joint mortgage holder, I think she may also be able to remove it from the market altogether. Certainly if it had slipped past her to the point of an actual sale, that couldn't go through unless she signed the contract as well!

debt_doctor

As INAN says, ring the estate agent and ask who put it on the market.

It can only be;
The mortgage co.
The trustee
The owners

I think your right in that they are not talking to each other, in any of the 3 scenario's all owners should have knowledge / have been informed.

DD