Protecting family home from being sold if bankrupted

fermi

Nothing at all fraudulent about offering the claimants a voluntary charge if push comes to shove. :huh:

Neverbeenherebefore

So your BIL needs to find someone who does have insurance, someone who has been negligent towards your BIL.

Does he have an accountant?

If so why the hell was he still working as a "sole trader"?

Accountants have professional indemnity insurance, and failing to advise any business to go limited has (IMHO) been gross negligence for over a decade now.

alastairq

John1993 wrote: »

Also a. Possible jail sentence for fraud, but let's not let that sort of thing get in the way of him cheating someone out of compensation for his negligence...

He hasn't 'cheated' anyone out of any compensation whatsoever.

leaving him with a bill for £139,000 owing to the householder's insurance company.

It is the other party's insurer who is pursuing the claim on their own behalf.

One_Five_Four

The voluntary charge is a good idea which we'd not considered, so thanks for that one. We'll look into it if it comes to that.

Thanks also for clarifying that Alastair, it is the householder's insurer who he owes the money to.

The time for trying to get his insurers to pay out on the claim is sadly gone. He made a genuine mistake, caused an accident, and as an honest man, all he's now trying to do is pay off as much as he can. But if it's legally possible, to do so without losing the home he has lived in for the last 30 years in the process.

Thanks again for the help folks.

One_Five_Four

AdrianC wrote: »

So... he owes £139,000. He has £10,700 in other assets, and ~£175,000 equity in the house.

Why would bankruptcy be a risk? Assuming the house value's roughly right, and ignoring the costs of selling, he's going to have ~£45k left.

But, yes, the house is going to have to be sold - unless there's some other way he can find ~£130k.

As far as the other householder's concerned, it sounds from what you say as if their insurer's paid up, and is now chasing your B-i-L to square them up for that payout, so his insurer isn't their problem.

Thanks Adrian. Just to clarify though, he owns the house jointly with his wife, so we assumed that he would only be entitled to half the equity meaning he owed more than his half, plus savings, was worth.

Is this incorrect?

Thanks again.

Just to add. Both he, and I (please see the other topic I linked to), have now become Limited following the accident, lest it ever happens again.

AdrianC

One_Five_Four wrote: »

Thanks Adrian. Just to clarify though, he owns the house jointly with his wife, so we assumed that he would only be entitled to half the equity meaning he owed more than his half, plus savings, was worth.

Is this incorrect?

DebtDoctor seems to think so. TBH, I'm surprised. I would have thought that, since the house is a joint asset, it's all in play. I'm happy to be proved wrong, but a bit more explanation on DD's part might help.

One question - are they tenants in common or joint tenants.

John1993_2

fermi wrote: »

Nothing at all fraudulent about offering the claimants a voluntary charge if push comes to shove. :huh:

I had understood that the suggestion was to offer an unconnected third party a charge on the house to stop the claimant being able to do the same.

If I misunderstood, then I apologise.

fermi

John1993 wrote: »

I had understood that the suggestion was to offer an unconnected third party a charge on the house to stop the claimant being able to do the same.

If I misunderstood, then I apologise.

No. That is not what DD was suggesting. Besides, even if possible something like that would fail as a trustee in bankruptcy has the power or ability to have the courts set aside anything like that that attempts to put funds or assets beyond their reach.

debt_doctor

AdrianC wrote: »

DebtDoctor seems to think so. TBH, I'm surprised. I would have thought that, since the house is a joint asset, it's all in play. I'm happy to be proved wrong, but a bit more explanation on DD's part might help.

One question - are they tenants in common or joint tenants.

Hi, If they are joint owners then the presumption is that they are joint tenants unless something different was done at the time of the purchase.
A charging order or bankruptcy order severs a joint tenancy and they will become tenants in common - however the assumed beneficial interest is still 50 - 50.
Whilst it is possible to try to show that one party has more beneficial interest than the other, it is in fact incredibly rare and expensive to quantify.
The norm will be that the insurance company could charge up to 50% of the plumbers beneficial interest - although the full debt amount will be claimed in the charge it can only be paid out to the extent of the debtors interest in the property.

- Something else to remember is that charging orders are often set up to attract statutory interest at 8% per year, but if the primary goal is not to sell the house until the two occupants no longer require it, then a charge seems the way to go.

DD

AdrianC

debt_doctor wrote: »

Hi, If they are joint owners then the presumption is that they are joint tenants unless something different was done at the time of the purchase.
A charging order or bankruptcy order severs a joint tenancy and they will become tenants in common - however the assumed beneficial interest is still 50 - 50.
Whilst it is possible to try to show that one party has more beneficial interest than the other, it is in fact incredibly rare and expensive to quantify.
The norm will be that the insurance company could charge up to 50% of the plumbers beneficial interest - although the full debt amount will be claimed in the charge it can only be paid out to the extent of the debtors interest in the property.

DD

Furry muff.

So, given the situation we have here...

£139k owed.
£11k in other assets.
(£200k-25k)/2=£87.5k in equity in the house.
That gives a shortfall of ~£40k.

That equity can't easily be released without selling the house.

What would your expectation be from that situation?