a likely story?

EOX82

A friend of mine is about to lose her home (lives with partner in partners house). She can't work out what are lies and what are not. Whether it is worth seeing things through or starting afresh.

To cut a very long story short he's in deep. He has in theory (but we don't know what are lies) quite a bit of equity, should be enough to buy a small house outright and if his debts don't exceed £50k clear those too.

He's £12000 in arrears with mortgage and I think it's hmrc that have put in a bankruptcy order. He's listed as bankrupt on the insolvency register.

Now he's telling my friend that he's registered for an iva and the bankruptcy on the register will be annulled when his creditors accept. But if he has so much equity how will it be in their best interests to accept?

I want to know if this is a line he's spinning in order to stop my friend leaving when he knows he's likely to be made bankrupt.

He's said the condition of the iva is that the house has to be sold. Then why not just sell house and clear debts in the first place? Unless he doesn't have the equity he's claiming.

I just want to know if any of what he's saying could be true. Land registry has charges applied from four different creditors not including hmrc.

He's also said they have 12 months to sell. They have no kids at the property though. I'm scared for her that one day she'll go home and all her things will be locked inside. I've told her to pack up her precious things.

I've said she should ask to see his credit report so she can see exactly what he owes and who he's in trouble with. She is too scared to ask and too scared to face the devestation that's about to come

Does any of it seem feasible? Something smells so fishy to me and the years of lying. I know I wouldn't be sticking around.

Thanks in advance.

Tixy

It is possible in some cases to have a bankruptcy order annuled.
One on the times that can happen is if you have entered an IVA - so that is a possibility.

In terms of selling the house - It may be that he doesn't have enough equity to cover all of the mortgage/charges and other debts.

It may be that the IVA is effectively an interim measure and that he is planning to make a full & final payment to the IVA when the house is sold, and that due to the bankruptcy order he simply doesn't now have time to wait for the house to sell.

That said of course it is also possible that some or all of what he is telling her are lies.

If I was her I would be asking to see evidence of the situation with her home - i.e. proof of the proposed IVA.

Also do they have any joint bank accounts / credit accounts? If so then I would be arranging for them to be closed and filing a notice of disassociation with the credit reference agencies.

DorisTrousers

The advantage for creditors is that usually an IVA will produce a better return for them.

In cases where there is equity which can be released, the OR will usually appoint an outside I.P. as Trustee. This can incur very significant extra costs, and they are preferential also, which means that the I.P. gets his or her money first, leaving less for the creditor(s) concerned. It IS possible to propose an IVA with no contributions, more a disposal of assets such as a house, and it is not uncommon to allow a 12 month period for that to happen. By the same token, it should also allow more of the excess from the sale to be retained by the debtor, so in theory at least this is a plan that is logical and may have legs.

EOX82

Thanks very much for your replies. If they are feasable then he can have benefit of the doubt....For now!