Please help. Husband gone bankrupt

sherbet_lemon_3

I'm new to this. A friend recommended you for advice.

Today I discovered my husband has been made bankrupt. It happened a week ago and he has been trying to break it to me!?! He had failed to get his tax returns in for the last two years and the Inland Revenue pursued him to bankruptcy.

The house we live in is mine. I bought it in 2000 with a mortgage in my name. I pay it every month from my salary. I had to get him to sign a form at the request of the mortgage company to say that he woud not have any claim to it if he lived there as he had bad credit history even then.

We have no joint assets. We have one joint account with nothing in it.
Where do I stand with regard to the house,my earnings etc? We have three kids and I am worried sick. Will be posting again soon to find out what he needs to do when he meets OR.

Thanks for reading.
SL

rog2

Hi SL - first of all, welcome to the Bankruptcy and Living with it forum.

In answer to your main question - I don't think you will be affected much, financially. The house is in your name so your husband will have no Beneficial Interest in it unless he has been contributing to the mortgage and upkeep. Even then, I would suggest that the form which he signed with the mortgage company would be sufficient to clarify the matter, should his OR/Trustee try to claim any vested interest.
The OR will ask him about your income, but only for the purpose of checking household Income and Expenditure in order to calculate any possible IPA/IPO (an IPA or Income Payment Agreement is a payment that will be imposed on your husband, for 3 years, if he has any surplus income after allowed expenditure).
I would ditch the joint account - it will, probably, be frozen by the OR anyway.
All in all - it should not affect you and the children much if at all.

Just as an aside - I do feel for your husband. I, too, was declared bankrupt by HMRC (Inland Revenue) in very similar circumstances. I found it very difficult to discuss with my wife - we had joint ownership of the house and I am desperately trying to raise the money to buy back my Beneficial Interest from my trustee.

sherbet_lemon_3

Thank you. Feels better just to talk to someone about this.

My husband has found it really hard to know which way to turn and I am desperate to find a way out of this with him. he was made BR for 13,000 tax bill. I have suggested that he gets his accounts in order as I am sure he should get some back from IR. Could this then be used towards BR? Please excuse my ignorance. I really don't have a clue.

He has appointment with OR next week and I am not sure which tack he should take. Should we list 50% of every expense of the household or would that show that he has contributed towards the house and therefore has an interest? Or should we try to show that I can manage it on my own and therefore end up paying loads each month to the IPA?

Confused!

rog- thanks for your time. Trying to stick with him on this but getting more worried the more I read! He just made a mistake, he is not a frivolous man and no big spender. :huh:

dumpy

Sherbet lemon

Your post could have been written by me..... My OH went BR last year and took 3 weeks to tell me....... Believe me, I know what you are feeling.

On a practical note I owned the house we live in and I had no joint accounts or financial association at all. I (to date) have had no major problems.

The only problem I have had was getting house insurance as I have to declare he is a BR, but I searched this froum and some suggested Barclays, and it was arranged OK. I was very clear when I rang that he was BR and they said that as long as the policy was with me and that only I could claim they were happy.

I did find that the more I tried to find out the more stressed I became about everything. Waking in the night thinking the house was going to be repossessed and all the other nightmares you get at 3am. I kept thinking worst case scenario.

Try to keep calm and whilst getting clued up on procedures don't get too bogged down by the worst case scenario.

The whole trust issue is a big one here as well. I felt that he had really threatened my home (not house, home) and without consulting/talking to me and that was/is a really big deal to me. It doesn't help that he won't talk about it....

Feel free to PM me if you want to chat off the boards.

Good luck.

sherbet_lemon_3

Have been writing a list of every outgoing etc we have and started to look at the forms he must fill in.

I'm such a numpty. I have remembered that the loan we have is in both names. He could not get it on his own so I went on as joint applicant. He pays it every month. Could this be a problem?

Thanks all.

fermi

sherbet_lemon wrote: »

Have been writing a list of every outgoing etc we have and started to look at the forms he must fill in.

I'm such a numpty. I have remembered that the loan we have is in both names. He could not get it on his own so I went on as joint applicant. He pays it every month. Could this be a problem?

Thanks all.

If your signature is on the credit agreement then you are jointly liable with him. Since he has been declared bankrupt his liability is discharged and you become solely liable for the whole loan.

See: Joint and Several Liability - Accounts in joint names.

Accounts in Joint Names

Joint and Several Liability is when you take out and sign a joint credit agreement with another person. This means that both parties are liable for the repayments of the money borrowed.
This includes;

• Secured and Unsecured loans
• Mortgage
• Joint bank accounts
• Joint Tenancy
• Council Tax

If you have taken out a joint account with another person, this does not mean you are only responsible for half of the money owed. As far as a lender is concerned, both parties are equally liable for the full amount borrowed.

This can sometimes cause problems, especially in cases such as a split in a relationship. If one party decides not make any contributions to the repayments, the other party will be left with the debt. As far as the lender is concerned, the agreement is for either party to repay, if the agreement is not kept to, the lender can either choose to pursue one of the borrowers for the repayments or both.

The monies cannot be paid back twice but both parties can be pursued for the debt.

In other cases, if one party is made bankrupt, they will be released from the legal responsibility to repay the debt, leaving the other person fully liable to make the repayments.

Was it a big loan?

sherbet_lemon_3

Yes. £15,000.

I kind of guessed that I would be. Great. So, he cannot put it down as an expense then?


So long as the OR can not touch my house, I think I can cope. Think.

Thanks Fermi.

crutches

so glad to find this thread.
just posted this one on DFW
any advice welcome.Its inland revenue tax returns again.no accs for past 6 yrs.(always made a loss b4 that anyway).unless its in a cayman island account hes just incompetent not a tax avoider!

http://forums.moneysavingexpert.com/showthread.html?t=536437

tigerfeet2006

Hi Crutches,

Welcome to the board and sorry to hear about your problems. If you start your own thread a few more people will see it and be able to help on your particular situation.