selling my house before going bankrupt

atlas2l8v

Hi

I got into debt and have currently been sent a stat demand sec 268 from one of the creditors asking for their money or bankruptcy will proceed.

Im going to the CAB to check if its from the court as it isnt stamped etc and from reading this forum beleive its not legal unless it is, however where do i stand if i sold my house to my parents and then went bankrupt??

I wanted to pay the money back over how ever many years as i do feel bad about not being able to pay the money (47k over different unsecured creditors) but the constant hassle is making me think about going bankrupt, where would i stand and am i able to do this ?

thanks for any help

Paul

catewithers

I'm not sure what the exact science is but my understanding is that if you go BR you have to declare any assets you've disposed of to the OR and they may have powers to reclaim the money.... Otherwise, people going bankrupt would simply transfer their assets to a family member/friend and then reclaim them when they've been discharged.
However, like I say, I'm not sure - someone else will be along who knows more about this and you may get a better answer if you post on the bankruptcy board as well.

catewithers

Oh and welcome, by the way!

atlas2l8v

thanks for the reply and the welcome :-)

all this happens due to job/career loss and change and splitting up with my partner so like i said i really wanted to pay it all back but cant see a way of doing it and obviously want to stay in my house

Hermione54

I think the OR will regard any disposal of property immediately before bankruptcy as fraud and act accordingly, but you really need to take proper advice. The bankruptcy sub-thread will offer more knowledgeable help.

Bargain_Rzl

Sorry, I don't know how the statutory demands work, but is there a possibility that you could sell your house via a legitimate route and make enough profit from the sale to clear your debt so that you then do not need to go bankrupt?

Or is the debt greater than the profit?

peb

Catewithers is perfectly right. IF you were to sell your property the OR would look at the transaction very carefully - it mus be for market value and at arms length. Accordingly if your parents were willing to pay full market value (for immediate vacant possession even if you were not to vacate the same) the transaction would not be overturned - otherwise it would. Any transaction at an undervalue can be overturned.

Hope that clears things

PEB (Conveyancer)

atlas2l8v

cheers again.,.,

the debt is 47k in total all unsecured etc, house is valued at approx 115k mortgage is 103k, northern rock have applied for a charging order of 15k on the property.

Was thinking if i sold the house to my parents at say £103k to pay the mortgage off and then went bankrupt would that be ok. just that theres not enough equity to settle all the debts and i obviously want to try and keep my home

CLAPTON

if you gave some more details of your situation we might be better able to offer help and advice.
for example how much are your unsecured debts, how much is the equity in the house.
you see, it may be better to go bankrupt and then your parents buying the beneficial interest in the house from the OR .. its usually possible to negotiate a good price (low) with the receiver. (saves him the hassle and costs of actually having to sell it and realise the equity).

catewithers

Clapton's right. That's a great idea. If your parents are willing to buy your house from you, it would be much better to go bankrupt and then for them to negotiate with the OR over the interest. This means you still have the security of your house, if that's important, and you are clear from any dodgy dealings in the eyes of the OR.

atlas2l8v

Hi Clapton

total Debts are 47k unsecured
Mortgage is 103k
value approx 115k
Northern rock are asking for a charging order value of £15k on the property.

So if i did go bankrupt, my parents are able to buy a benificial interest and keep the home, not well up on this area will have a search about regarding it but any help is of course welcome