Help with bankruptcy

bbgems

Hi

I need some help and advice for my mother. My stepdad and her owned a house and sold it about a year ago. They split the proceeds 50-50. My stepdad has a lot of debts and spent his half of the money already and still has thousands of pounds of debts on cards etc. My mother still has most of her money (she has only spent a couple of thousand), some of which is in bank accounts, isa's, etc. My stepdad says he is going to become bankrupt to get rid of his debts.

My stepdad has always worked full-time and has paid out of his salary the rent, electric, gas, council tax, petrol, insurance, etc., basically, he pays all the bills. He has now gone self-employed. My mother has never worked and is registered disabled and gets benefit for that, out of her money she buys all the shopping.

They have a car which my mother drives 95% of the time as she is disabled but it is in his name.

What I need to know is if my stepdad goes bankrupt will my mother's assets be taken into account? Will she be liable for any of his debts?

I have tried to explain to her that I think that as a partnership she has benefited from him paying all the bills as she only buys the shopping, but then her income is a lot less. My mother is very frugal with her money and has said that my stepdad earned enough to pay all the bills and her money saved pays for larger items, such as, holidays and large furniture.

I do not know what to advise her, can somebody please help.

Thank you.

philnicandamy

Your first port of call should be to contact one of the Debt Charities; see
links below. Their services are free; they have no vested interest to serve; their advisors
are professionally trained and the advice they give will be objective and in your best
interests only. CCCS operate a system of telephone appointments that are designed to be
flexible and don’t require you to attend an office based interview. At the CAB you will
need to make an appointment with a specialist Financial Advisor; other advisors may not
have the specialist knowledge you’ll need.
http://www.cccs.co.uk/
http://www.nationaldebtline.co.uk/
http://www.citizensadvice.org.uk/index.htm
If and only if you’re advised that bankruptcy is the most suitable solution to the financial problems you mention then the guys & gals here will help any way they can.
For more specific advice and support, in an environment that is managed by people with
first hand experience of bankruptcy, and moderated to ensure that no deliberately
inflammatory or abusive posts are made then please visit:
http://bankruptcysupportersclub.co.uk/default.aspx

missimaxo

Ok - I will try and answer this as an insolvency examiner for the OR (which I am) as if the step dad had come to see me:

1 - on his SoA he would list that he would have sold the house - I would firstly ask about how the money was split and ask for a mortgage redemption statement from him/ their solicitor to prove this.

2 - if I was unsure of the equity split I would do a historical search of the land reg to prove the house was previously owned in joint names

3 - I would probably only query the mothers spending/ saving of the equity if anything was now held in joint names (which is not clear from OP's post)

4 - I would question the step-fathers spending of his half of the money - it is unclear from OP's post how this has been spent. But however his half of the money has been spent, depending on how much this is (ie. is it material) I think it would be consideration for a BRO/BRU for step dad (unreasonable extravagance?)

5 - Assets solely in the name of mother would be unlikely to be touched

6 - She would only be liable for step dads debts if any of them are joint, ie. if her name is on any of them (she would be jointly ans severably liable).

7 - The car would not be classed as exempt if mum required it (even though she is disabled) only if ste dad required it for work purposes (please remember I am thinking from step dads point of view and what is likely to be on is SoA).

Obviously a trustee (if appointed) may try and delve deeper into the couple's affairs and try and alledge that the step dad may actually be owed a proportion of the mothers money - but on the face of it I doubt I would request an apointment of a trustee unless a creditor specifically requested it.

In an interview with step father I would ask questions about how much each party contributed (and for example whether mum brought up children whilst step dad worked). I would possibly also ask why they agreed a 50/50 split. It may well depend on their answers whether I pushed it further. Without asking loads more q's of OP it is hard to tell. I would suggest OP's mum seeks legal advice (as per philnicandamy's post or directto a solicitor on a freebie session).

bbgems

Hi

Thank you so much for this advice it is very helpful. I will tell my mum to seek legal advice.