Complicated one

treading_carefully

Have not posted for a while but am a regular lurker. This scenario relates to a business partner who like me has gone bankrupt.

Approximately 3.5 yrs ago he signed over the family home to his wife in exchange for 30k. Based on valuations and outstanding mortgage he would have been entitled to 45k (exactly half the equity) but only needed 30k to start the business.

Fast forward to 2012 and he is 1 month bankrupt and on his statement of affairs he included the family home as one of his assets as he has been living and contributing to the household costs. He reckons his wife would have been contributing slightly more than him due to her higher stable salary.

My question is will the OR want the 15k he should have got to sign house over 3.5 yrs ago. Or does he look at property now (with reduced house prices) and work out a beneficial interest figure taking account of what he has already been paid some yrs ago.

Does not seem fair if wife has to pay 15k especially as house prices have fallen.

It is wrecking his brains. Appreciate your thoughts.

PippaGirl_2

Are the house deeds solely in his wife's name? If so, at the end of the day a divorce court would be unlikely to award him any portion of the equity if the house was in her name and the evidence showed he had already been paid out of his share. I can't see why then the OR would see it differently.

treading_carefully

Thanks for reply. He had been paid but not the full equity. He should have been paid 45k but only received 30k approx 3.5 yrs ago. Is he still deemed to have a beneficial interest in property and if so how do they calculate it.?

izools

When you say "He should have been paid £45,000" is that written down anywhere?

Is he mentioned on the deeds any more?

treading_carefully

No but based on what the house valued at and the outstanding mortgage when he received the money, 45k would have represented half the equity. Nothing written down and he is not on the deeds anymore.

PippaGirl_2

A valuation can be very different things. A valuation can be done by a surveyer, a valuation can be done by an estate agent but at the end of the day a house is worth what someone will pay for it so you say it had a valuation but that can be significantly innacurate. I would say given the house is not in his name, he bought himself out of equity that the OR is unlikely to persue any interest in the property. It would be hard anyway given the deeds are in his wifes name so the property belongs to her fully.
I think he was wrong to cite the house as an asset personally as I don't think he does have an interest in it.

treading_carefully

Thanks for the reply. He will be less edgy now as they do not have 15k if OR demanded it.