BR hubby , joint mortgage,big equity HELP

Orangejellybaby

Hello , I've visited these forums for years ,never did I think I'd be visiting the BR section . Ok so a quick outline , my husband has been made BR by HMRC in January ( he was a sole trader and stopped paying his vat /tax for whatever stupid reason, spiralled into depression )This was unbeknown to anyone until it happened . Unbelievable , you can imagine the terrible few weeks ive had it's like being in a black hole with no escape , I am devastated . Anyway , we have a joint mortgage and we have probably £200.000 or more equity . I know , if I had known of the situation I could have remortgaged . My question is - half of the equity is mine , I also put in a 10k deposit when we bought the house ,which I have proof off . I also have ALWAYS paid the mortgage from my bank account with my wages from a job not connected to his business . I know he contibutes to the family household too but is there a chance I could have extra claim on the house ? The IP told me to get legal advice on this but it's more money . I am desperatly trying to cling onto the house as we have children it all such a terrible mess . Thank you x

dojoman

The OR will definitely want your husbands share of the equity.

Orangejellybaby

Yes I know but I'm just clutching at straws really. A third party may be able to buy out his share to save the house but they will never raise the full amount . I'm so desperatly worried we will have nowhere to live , I know I will have some equity but will never get a mortgage or even rent with his BR I have to get a proper valuation on the house too .

Mouse1812

dojoman wrote: »

The OR will definitely want your husbands share of the equity.

Yes, but the key question is "what is his share?"

The answer to this not only lies with the respective contributions made, but also the intentions of the parties.


Read this:
from the Citizens Advice Bureaux website

Beneficial interest

Legal ownership does not affect who is entitled to the proceeds of the sale of the home. This is governed by the principle of beneficial interest. This establishes the financial value owing to each partner if the home is sold.

If only one of the partners is the legal owner, the other (whether married, a civil partner or a cohabitant) may still be able to claim some of the financial value of the property. This is because s/he may have a beneficial interest based on contributions s/he has made to the purchase and/or the intentions of both partners when the home was bought.

If a couple are joint legal owners, this does not mean that they have equal rights to the financial value of the home. They may not have an equal beneficial interest in the property.

Certain people will only have rights because of their beneficial interest. Partners who are not married or civil partners who are not legal owners can only have the long-term right to occupy, prevent a sale or obtain any proceeds of a sale if they have a beneficial interest. This is why it is important to establish the existence of a beneficial interest.

Rights of a partner with beneficial interest

If a partner has a beneficial interest, this means s/he:-

• has the right to occupy the home. This right can be enforced on a short-term basis by applying for an occupation order
• may be able to prevent the sale or use of the home as security to raise a loan
• is entitled to a share of the proceeds of the sale of the home based on her/his beneficial interest.

How to establish the existence of beneficial interest

A written, signed declaration or a formal trust deed which indicates the partners' intentions about their financial shares will establish that a beneficial interest exists. Solicitors are supposed to arrange this when a couple buy a property. If they do not, it may be a failure of professional duty.

If there is no formal statement, the existence of beneficial interest can be established by applying to court (usually the county court).
The court will look for any evidence of a common intention, which could be an informal discussion or understanding, as long as both partners are aware of it.

If the court cannot find any common intention, the division of interest will depend on the amount each partner has contributed to the purchase and/or housing costs of the home, as long as these were not intended as a gift.

A couple can apply to court for their financial shares in the home to be valued at any time. It does not matter if one of them has already moved out of the home.

and from the OR's technical manual

33.67 Calculating interests – jointly owned property
The usual declaration will be that the bankrupt and other owner are joint tenants in equal shares. However, on the making of the bankruptcy order the beneficial joint tenancy will be severed and any increase in value of the property as a result of expenditure by either party should be taken into account to calculate the respective beneficial interests of the parties URL="http://www.insolvencydirect.bis.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter33/part2/Part%202%20notes.htm#20"]note 20[/URL. If no declaration has been made, the principles outlined in paragraph 33.58 relating to solely owned property should be applied to determine the interests of the bankrupt and his/her co-owner(s). See paragraph 33.66 above.



Any agreement between yourself and your husband is binding upon the trustee, even if it was a verbal agreement. Proving it may be another matter.

You (or your solicitor) will benefit from studying this

Orangejellybaby

Thank you Mouse1812 , I think it may be worthwhile speaking to a solicitor . Does anyone know roughly how much solicitors fees will be ? Thanks