Any advice please?

gailgat

Hi I wonder if anyone can help?

My husband was declared bankrupt in January 2012, I was not involved in any way as it was his business which failed. We have a joint mortgage and we had a joint account. We never missed a mortgage payment and always kept within our overdraft limit.

Our house is in trust for our grown up children as my husband did not want anything to happen to it if his business did not work. Our problem is this, although I have my own bank account, a well paid job as a teacher and an excellent credit rating. We have recently accepted an offer on our house which would give us 40K equity. We have seen a house that I can afford to buy on my own and I have been offered a mortgage in my name only.

My husband sent a letter to the OR telling him the details of the sale but he was on holiday. We have just spoken to him and he tells us that he does not know if we can sell the house!!! Even though he says the trust is sound, he says their legal department may want to challenge it and that will take 3 to 6 weeks. Why did they not challenge it last year?

If that happens we will lose the sale as our purchasers have to be in by Easter and we can no longer afford the mortgage. We also will not have enough money to put a deposit on the house we are trying to buy and I can't get a bigger mortgage on my own.

We really do not know where to turn now. Can we sell the house or not? Will they take my husbands beneficial interest? What happens next?

Any advice would be gratefully appreciated.

Thanks

Gail

dancingfairy

Not sure how the trust thing works but surely you wouldn't then get the 40k to keep?
The OR had 2 years 3 months from the date of bankruptcy to deal with the house and whether it should be sold setc.
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gailgat

I know that they will most likely want my husbands share of the equity, but I don't know if they can stop or delay us selling the house?

Thanks

Mouse1812

Are there any restrictions registered against the property with the Land Registry?

You can download your property details here (cost £3) to find out.


Secondly I do not follow how you could get £40,000 equity if the property is held in trust.

ps, I do understand trusts

gailgat

Hi thanks for the reply. I know nothing about trusts but according to my husband, the equity trust was set up on our main residence whereby we are allowed to use the proceeds from the trust to buy another main residence for the life of the trust. Even if we had no trust, surely they can't touch my half of the equity, or can they?

Thanks for taking the time to help.

Gail

Mouse1812

OK trust element covered but you still need to check the Land Registry record. Once I know the answer to that I can advise further.

ps, you don't have half the equity, it belongs to the trust

gailgat

Hi sorry I know I do not have half the equity, but I can use it to purchase another house and it can't be touched I believe? I have checked Land Registry and there is a 'J restriction' is that correct, on the property.

Thanks

Gail

Mouse1812

What does it say?

Mouse1812

I need to know who has registered the restriction, it makes a significant difference to your options.

If the trust is “sound” then the OR will have a battle to challenge it. They will need to prove it was put in place to defeat your husband’s creditors when he was already insolvent.


A "J restriction" is a jointly owned restriction. Your answer tells me nothing which I can use to help you. It could be there because you are joint owners, it could be there because of the trust, it could be there because of the OR. Which is it?


A Form J restriction has only a limited effect as it does not prevent dealings with the property.

If you can quote what it says, then I can comment further.