Help re bankruptcy please

Marg

Brother in law is probably going to loose job - has many debts & considering bankrupt route. Sister in law is very worried as she has been told 'They' can take the house as he has 'beneficial interest' in it. The house is in her name only.
Is this true?
They have always maintained separate bank accounts etc. House always been hers. Can 'they' make her pay his debts?
I'd love to be able to reassure her - the stress is making her ill.

tigerfeet2006

Hi Marg.

Houses are not anything I know much about but I am fairly much positive they won't take the house if he his not and has never been on the house deeds. Someone more knowlegeble than myself will be along at a more civilised hour and help you on this one I am sure.

Why will he loose his job if he takes the bankruptcy route? is he an accountant or something like that?

Have he taken proffesional advice about going BR. Suggest to him that he talks to one of the Debt Charities. The judge will require that he has taken some advice and these are the best folks to talk to.

[FONT=arial,helvetica,sans-serif]Consumer Credit Counselling Service - Website: [/FONT][FONT=arial,helvetica,sans-serif]CCCS[/FONT][FONT=arial,helvetica,sans-serif] Telephone: 0800 138 1111[/FONT]

[FONT=arial,helvetica,sans-serif]National Debtline - Website: [FONT=arial,helvetica,sans-serif]National Debtline[/FONT][FONT=arial,helvetica,sans-serif] Telephone: 0808 808 4000[/FONT][/FONT]

or make an appointment with a debt councillor at your local CAB http://www.adviceguide.org.uk/

Please reasure your sister that there is no need to panic over BR. Try and get them to post on here where they will find lots of help and advice and support.

PixiePie

In short - no.
Slightly longer, and probably better, answer - no, not if it is her house, in her name and therefore I'm guessing he doesn't have any secured debts on it (how can you secure something against something you do not own?). I will freely admit I know very little about housing and BR, as it does not apply to me, but someone else was asking about the same situation with a car that belonged to her OH, and the answer was 'no, they can't touch it'. A bit like (my mad examples again) if person A stabs someone, their husband cannot go to prison for it. His Benificial interest in it I would assume is that he lives there and therefore has benifit of living in it. Not the same as owning it as an asset though. If there is a legal agreement drawn up that she owns the house and pays the morgage, but he pays all the bills and therefore has a share of the house to be honest I don't know hugely - I'm replying as I know what it's like to post late at night and be desperate for *any* answer - but it might get a bit muddy there, although if he has no claim on it, they can't take it.

My best thought would be to phone National Debt line (in my experience, they are the only people I have called, but are *so* nice and non-judgemental and helpful) or the CSSS or similar for instant personal advice about the particular ins and outs of his case.

And at the end of the day, whilst I appreciate loosing your home, especially if children are involved, is incredibly stressful, try not to worry (you or them!)to the detriment of health (a lot easier said than done I know) - money and possessions are just that, health and life are far more important (coming from someone who has been *really* homeless for a year and technically still is).

I'm sure Richard or Fermi or other very wise bods will post as well soon. Hugs

fermi

Unfortunately it seems that it is entirely possible that he would be considered to have a 'beneficial interest' in the property, if he has made regular contributions to either the mortgage directly or other household expenses over a period of time.

I have seen this confirmed by threads on this issue on other forums.

From: PART 2 - ESTABLISHING THE BANKRUPT’S INTEREST IN THE PROPERTY

This is from the perspective of the mortgage/title holder going bankrupt, but most sources agree that this applies in reverse as well.

Types of contributions 33.39

Any contributions to the deposit and/or the mortgage should be considered in the calculation. Where the property was purchased with the assistance of a mortgage, the common intention of the interests of the parties in the property may be inferred by the source of the deposit and the arrangements for repaying the mortgage as explained below in (a) to (e)

Contribution to deposit

(a) If the bankrupt received assistance from another (“A”) in payment of the deposit, it may be inferred that it was the intention of the parties that A would share in the beneficial interest. It is likely that A will gain some interest in the property, unless the assistance was given in the form of a gift or a loan.

Contribution to deposit and mortgage payments

(b) If A made direct contributions to the mortgage repayments from his/her own funds and had provided some or all of the deposit for the purchase, it may be inferred that his/her interest in the property will be increased.

Contribution to deposit and household expenses

(c) If A provided some or all of the deposit for the purchase, did not make direct contributions to the mortgage instalments but paid other joint household expenses from his/her own monies, it could be inferred that these payments were intended by both parties to be a contribution to the price of the property. Accordingly A’s interest in the property will be enhanced by that contribution.

Contribution to mortgage only

(d) If there was no contribution by A to the deposit, but the bankrupt received assistance from A in payment of the mortgage repayments, A will accrue an interest in the property provided that the contributions were direct, regular and substantial.

Contribution to household expenses only

(e) Similarly, where the payment of the household expenses by A was substantial, an interest may accrue to A. The extent of the interest will depend upon the amount of the contributions and what can be inferred from the conduct of the bankrupt and A on how the beneficial interest would be shared.

Equal shares 33.40

In the situations (a) to (e) above it should not be assumed that the interests in the property will automatically be equal. If no inferences can be drawn, the rule of law that “equality is equity” will be applied with the result that the parties will hold the beneficial interest in equal shares (Gissing v Gissing – see 33.33) The purchase of items for the property by A will not imply an intention that he/she would acquire an interest in the property. Similarly, the fact that the parties live together and A shares ordinary domestic duties, e.g. looking after children or undertaking repairs to the property, will not give rise to an interest or an enlarged interest in the property (Burns v Burns [1984] 1 All ER 244)

They should seek some professional advice from CAB, National Debtline, CCCS etc to find out the likely outcome in their situation.

Should he decide on bankruptcy, and should it be determined that a beneficial interest exists, then the Official Receiver/Trustee will normally give the spouse or other interested party the opportunity to purchase the beneficial interest from the bankruptcy estate. This would prevent the sale of the property in order to release the interest.

Marg

Thank you one & all for your advice. So sorry Pixie pie to learn that you are homeless even 'technically' is a scarey prospect. I am texting sister in law now with info and tell her about this site. They need all the help they can get at moment. I'll keep watching in case anyone can tell me how (even roughly) beneficial interest applies.

Richard_S

Marg wrote: »

Thank you one & all for your advice. So sorry Pixie pie to learn that you are homeless even 'technically' is a scarey prospect. I am texting sister in law now with info and tell her about this site. They need all the help they can get at moment. I'll keep watching in case anyone can tell me how (even roughly) beneficial interest applies.

Hi Marg,

Sorry to hear about your sister and BIL's problems and I can understand why it's making her feel ill. As fermi has pointed out your BIL may well have a Beneficial Interest in the property even if he's never been on the deeds. It's quite a complicated formula arriving at the %age of B.I and the only way your Sister will get some definite idea of how much it's likely to be is by consulting a solicitor who specialises in insolvency or an insolvency practitioner.

In summary, if your BIL has lived at the house for 5 years and during that time he has contributed equally to the costs and upkeep of the house and during that time it's value has increased by £10k, then his B.I would be £5k. That is very simplistic and depends on a number of other factors but that's the basis of it. If she's paid the whole of the mortgage during that time then his B.I would probably be less.

I would never suggest anybody incurring the costs of professional advice if it can avoided but in a case like this there is too much at stake and it would certainly ensure they could quantify any likely liability on your Sister's part.

She would have the opportunity to purchase her husband's B.I and the O.R will negotiate but it's not as easy or straightforward as some aspects of bankruptcy.

Best regards

Richard

PixiePie

Marg wrote: »

Thank you one & all for your advice. So sorry Pixie pie to learn that you are homeless even 'technically' is a scarey prospect. I am texting sister in law now with info and tell her about this site. They need all the help they can get at moment. I'll keep watching in case anyone can tell me how (even roughly) beneficial interest applies.

Sorry that I was slightly off - as I said, I just know what it's like when you're desperate for *any* answer, so at least thought that the professional advice bit was right ...really sorry if I mislead at all

Being homeless isn't that bad really - to be honest some of the happiest times of my life were when we were really really homeless - sounds crazy I know, but all the everyday normal things really just don't matter at all, because they aren't there, and the really small things I look back on and smile (being so tired that I stuck two blue Peanut M&Ms up my nose to make my OH laugh as things were so poo for eg :rotfl:). One day every thing will be sorted and I know we will be successful in modern society terms, but for now, we just have to plug away at getting there and smile at the little things. We have each other and we have our relative health, so are not going to go back to being depressed and let this beat us. This place is so helpful, so really do use it, and wishing you and yours all the best

Richard_S

PixiePie wrote: »

Sorry that I was slightly off - as I said, I just know what it's like when you're desperate for *any* answer, so at least thought that the professional advice bit was right ...really sorry if I mislead at all

Being homeless isn't that bad really - to be honest some of the happiest times of my life were when we were really really homeless - sounds crazy I know, but all the everyday normal things really just don't matter at all, because they aren't there, and the really small things I look back on and smile (being so tired that I stuck two blue Peanut M&Ms up my nose to make my OH laugh as things were so poo for eg :rotfl:). One day every thing will be sorted and I know we will be successful in modern society terms, but for now, we just have to plug away at getting there and smile at the little things. We have each other and we have our relative health, so are not going to go back to being depressed and let this beat us. This place is so helpful, so really do use it, and wishing you and yours all the best

Pixie,

My heart skipped a beat when I scanned that post :eek: :eek:

PixiePie

He he, not hugely up my nose, not snorting them or anything, just at the entrance to my nose (tiny nose, peanut M&Ms are HUGE so not going up my snozzle lol), it was funny at the time. (And don't worry, I didn't eat them afterwards. Terrible waste I know, but it was worth it to make OH smile). I know, I'm slightly strange

Richard_S

PixiePie wrote: »

He he, not hugely up my nose, not snorting them or anything, just at the entrance to my nose (tiny nose, peanut M&Ms are HUGE so not going up my snozzle lol), it was funny at the time. (And don't worry, I didn't eat them afterwards. Terrible waste I know, but it was worth it to make OH smile). I know, I'm slightly strange

Nothing wrong with being strange Pixie,

Some of the most interesting people I know would generally be classed as strange. Next time you want to raise a smile try a torch light bulb; you'll not get a better imitation of a "runny nose" yuk,

Marg

Thank you once again -this time for making me laugh! As a child I put a button up my nose & was carted off to hospital - for all I know it's still up there 'cos I can't remember them finding it! It could account for lots that's happened since................
Thank you all for the joy you brought to my day