Question for a Friend

kerryboo

My friends husband went bankrupt and was discharged about 5 mouths ago.
The house is in her name and she was thinking of transferring the house into his name would the OR have a claim on it now hes discharged?
Many thanks guys

wherediditallgo

If I were her, I really wouldn't do it. Even if she finds the OR doesn't have a claim on it, I think any creditor who found out (& it wouldn't be too hard for them to find out) would object to him now having an asset that wasn't available when they were owed money. In the creditor's shoes, I'd certainly contact the OR to let them know the asset is now available & find out if I could claim against it. And once contacted, the OR might then wonder if the house was transferred out of his name originally to avoid it being an asset when he went BR. If that happens, he could be made subject to a BRO - they usually have to be issued within 12 months of the person being made BR, but the court can give permission for it to be granted even after that time has passed. It's not a risk I'd be prepared to take.

Why does she want to transfer it into his name, knowing his history? I'm not casting aspertions, just wondering why she'd want to do that when the house gives her something to fall back on & security/stability. If her husband gets into financial trouble again, the house would count as an asset.

kerryboo

she don't want to lose the house but wants to go bankrupt
Thanks for your help i will let her know

wherediditallgo

If she did that, she'd be in trouble for deliberately disposing of an asset knowing she was going BR. That could put her in line for a BRO too, so they could both end up in big trouble. Info about BROs is here . One way or another, I think the house will have to be on her SOA - the OR's aren't stupid, & it's easy enough to marry up files on a computer (common addresses, names etc), plus I know some organisations pay a flat fee for unlimited property searches through companies/services the public may not have access to. It's very unlikely that they'll miss that the house wasn't on her husband's SOA because it was in her name, & then isn't on hers because it's in his name. If they don't pick up on it at the initial SOA check (I was asked if I'd disposed of any assets, or still had any), they'll certainly have more than enough time to find out before her discharge.

fermi

kerryboo wrote: »

she don't want to lose the house but wants to go bankrupt
Thanks for your help i will let her know

If she wants to protect her interest in the house when she goes bankrupt by transferring it to him then this will simply not work.

I think that's what you mean?

If it is then the insolvency act forbids this type of activity designed to hide/protect assets, and under the legislation the OR/trustee would be able to claim it all anyway. Plus put her in line for a BRU.

It's not worth doing, and not worth getting in trouble over.

kerryboo

thanks for all your help, i have advised her not to do this and to seek help from CAB and CCCS