Mortgage & insurance in case of bankruptcy

simpywimpy

I have remortgaged a BTL that was previously in joint names with hubby into my sole name. The mortgage provider has insisted on an insurance policy to protect them against hubby going bankrupt after giving me his interest in the property.

Is it possible for me to protect myself in the same way?

ACG

Ive never come across a bankruptcy insurance policy before??

simpywimpy

Theyve asked for a policy that they have arranged to cover them in case the interest in the property that hubby had is reclaimed?

amnblog

They want your husband covered in case he is removing assets from his control before bankruptcy.

If it can be proved he was stripping assets prior to bankruptcy his creditors could claim against what has become your property.

This type of policy is also sometimes recommended if a purchaser is gifted cash toward a deposit by a third party. Or a property is sold under value to a family member.

You do not need this cover as the asset (the property) is in your name.

simpywimpy

I believe though that this cover that the mortgage company requires, only covers them against loss should in the next 5 years he becomes insolvent.

Can I protect myself in anyway?

GMS

The policy is because your husband has disposed of assets presumably for no or under value consideration.

If this was to avoid debtors then the policy would be claimed upon.

You cannot take a policy against yourself going bankrupt if that's what you mean?

The policy in place is to protect your asset (the home) against husband going bankrupt in the next 6 years.

If you go bankrupt the home will form part of the estate for the Official Receiver and/or Trustee to administer.

kingstreet

simpywimpy wrote: »

I have remortgaged a BTL that was previously in joint names with hubby into my sole name. The mortgage provider has insisted on an insurance policy to protect them against hubby going bankrupt after giving me his interest in the property.

Is it possible for me to protect myself in the same way?

No, as you could then be financially better off if your husband became bankrupt.