bankruptcy and home advice

bustedandbroke

Hi
not sure this is posted in the correct place -

I am on the verge of bankruptcy .

I understand that they will be looking at equity in my home , which is mortgaged and in both me and my wifes names. My mother in law has lived with us for about 10 years, in an annexe to our main property ,that she funded herself from the sale of her property .

my question is whether she would have any legal standing or claim on our property when it comes to assessing the equity left in the home ?

silvercar

Is she on the deeds?

Even without being on the deeds, I would say she has a claim given that she funded a percentage of the purchase price.

Is it mortgaged? If it is, whose name is on the mortgage? Did you need to complete any declarations (regarding her contribution) when you took the mortgage?

bustedandbroke

thanks for the reply

she is not on the deeds.

the property is mortgaged in mine and the wifes name .

I dont recall any declarations being made but will check .

National_Debtline

Hi there,

Welcome to MSE

Bankruptcy can be a complicated topic, especially when property is involved. The level of equity in a property will largely affect the way it is dealt with as part of the bankruptcy.

From what you have described, your mother in law may have accrued a ‘Beneficial Interest’ in your home, even though she is not named on the deeds. This is because of the money that she has invested within the property to help develop it. This can be relevant in insolvency options such as bankruptcy, but you would need legal advice about the implications of this ‘interest’ outside of the bankruptcy.

Beneficial Interest is calculated by the Official Receiver and would determine a money value within the property. It may mean that you don’t have as much equity as you think and this may impact on how the property is dealt with in the bankruptcy. The Official Receiver can investigate the last 5 years of transactions, so the development of the property/ annexe is likely to be discussed at some point.

Laura
@natdebtline