BR Advice BTL Married

Lee14

Going back to my first post.

The one BTL house my wife is selling now :

Mortgage in her name, AST in her name but the rent went into our joint account and the mortgage went out of our joint (Property account).

The funds gained from this sale will be hers and she will be putting it into her own account.

If things go wrong on my side with the properties held in my name and i have to go BR, would her money be effected ?

I would declare bankruptcy not my wife, she would have 3 properties then in her name which are let and fine.

Thanks

tomtontom

Lee14 wrote: »

Going back to my first post.

The one BTL house my wife is selling now :

Mortgage in her name, AST in her name but the rent went into our joint account and the mortgage went out of our joint (Property account).

The funds gained from this sale will be hers and she will be putting it into her own account.

If things go wrong on my side with the properties held in my name and i have to go BR, would her money be effected ?

I would declare bankruptcy not my wife, she would have 3 properties then in her name which are let and fine.

Thanks

I'm sure you can appreciate that the OR might have concerns about how manufactured your situation looks, all the assets are shifted to your wife so you get rid of the bad and keep the good. I would suggest you get out of the BTL market altogether, you are clearly not cut out for the risks associated with it.

Lee14

Hi

Thanks for your reply. We have not changed anything since they were purchased in 2007 / 2008 . My wife only has 4 in her name and the rest are in my name.

We never purchased any in joint names.

We haven't changed anything with regards to that it is just the way it has turned out.

So if the mortgage for the 4 are in her name then would they not be classed as hers ?

I am trying to protect her so if i go BR it will not take her money.

debtinfo

Where did the money come from to buy the property in the first place?

also how did you declare the income to HMRC, did you file separate or partnership tax returns

longtermplanner

Lee14 wrote: »

Because i estimate about 300k shortfall in negative equity possibly more then fees, CGT etc

ok, I have changed my mind from my first post based on this and I now see why you are so stressed about it. You two are clearly in business on a huge scale together. I think the OR is likely to view any seperation between the two of you as artificial.

The long term picture is clear: you have an unsustainable business and it has to be closed down. The question is whether it is possible to do this without bankruptcy. If it is, then the time to do this now, before your properties deteriorate any further and before interest rates rise and put downward pressure on house prices.

I would sort the houses into three groups, regardless of whose name they are in:

i. those in +ve equity (after taking sales costs into account). These need to be sold now.

ii. those able to withstand a 2% rate rise but which are not in positive equity. These you probably want to keep.

iii. the rest. You want to dispose of as many of these as possible as fast as possible and use the 20k and other cash raised to pay off the shorfalls through agred settlements with the lender. If most (or even better all) of your properties are with the same lender, you are ironically going to be in a stronger position to do this as it will be clear that they will not get anything out of your bankruptcy. If you aren't very confident about your negotiating abilities (and forgive me but having got yourself into this mess suggests a certain lack of business knowledge) then you may do well to discuss things with a good local Insolvency Practioner.

If the IP can't see any options looking at the details, then IMO you should both consider going bankrupt now and get it over with. Watching the house of cards collapse slowly over the next couple of years is not going to help your mental health, to put it mildly.

ladeeda

Lee14 wrote: »

Going back to my first post.

The one BTL house my wife is selling now :

Mortgage in her name, AST in her name but the rent went into our joint account and the mortgage went out of our joint (Property account).

The funds gained from this sale will be hers and she will be putting it into her own account.

If things go wrong on my side with the properties held in my name and i have to go BR, would her money be effected ?

I would declare bankruptcy not my wife, she would have 3 properties then in her name which are let and fine.

Thanks

Whether the OR accepts that the money from the house sale belongs solely to your wife depends on various other bits of information, what debtinfo and tomtontom have asked is valid and the answers to their questions, especially regarding deposit source and tax will be taken into account. My point about the AST's is important here for a couple of reasons. If your wife is the mortgage holder for the properties yet you are named on the AST's for those properties, then that would, quite rightly, suggest to the OR that he/she is dealing with a partnership.

I think you need to read up on MX before you do anything else. MX are actively looking for ways to possess portfolios. Your two boarded up houses give them the right to consolidate all your properties and appoint an LPA to manage them for you. The point about the names on the AST's of your wife's properties are valid here too. If your name is on them it indicates a partnership that MX were not notified about resulting in breach of contract giving MX (UKAR) the right to appoint an LPA for your wife's properties also.

All the seemingly unimportant details matter here. This site has lots of good information from experienced LL’s, some of whom have been through similar situations. http://www.property118.com/mortgage-express-ukar-lpa-receivership/64551/