Bankruptcy & House

Keep_pedalling

I think you and your wife need to sit down with your inlaws and have an open an honest talk about your situation.

Although the 45k deposit is being treated as a loan it is a gift, and unless your inlaws are totally naive they will have considered the possibility that they might not get all of it back so this may not be such a shock to them is you may think.

I don't see how you could continue to pay it back if you become BR anyway, and the BR procedure may be very uncomfortable with this hidden "loan" tied up with your finances.

debt_doctor

IF the money was loaned to you (joint loan), then your in laws would be a creditor in your bankruptcy. However, a joint loan would fall in full to the joint borrower, so be due to be paid by your wife.
DD

Keep_pedalling

debt_doctor wrote: »

IF the money was loaned to you (joint loan), then your in laws would be a creditor in your bankruptcy. However, a joint loan would fall in full to the joint borrower, so be due to be paid by your wife.
DD

Paperwork exists to show this was a gift, so the assuming the OP is making payments to his inlaws he might have difficulty explaining what these are for without revealing that his wife effectively carried out fraud to obtain a mortgage.

debt_doctor

Keep_pedalling wrote: »

Paperwork exists to show this was a gift

Does it? A gift does not need to be paid back - so what are (they?) paying for?
DD

Keep_pedalling

debt_doctor wrote: »

Does it? A gift does not need to be paid back - so what are (they?) paying for?
DD

According to an earlier post the OP says that the mortgage company obtained signatures to confirm that this was a gift and that the inlaws had no interest in the property, however privately it was being treated as a family loan,and they have been paying it back ever since.

I don't know much about bankruptcy procedures, but in their circumstances I would not like my finances being investigated by the OR, so would be going back to the inlaws to turn this "loan" into the gift my wife told the mortgage company it was rather going down the BR route and risk having the mortgage company find out and reposes the house.

silvercar

Keep_pedalling wrote: »

According to an earlier post the OP says that the mortgage company obtained signatures to confirm that this was a gift and that the inlaws had no interest in the property, however privately it was being treated as a family loan,and they have been paying it back ever since.

I don't know much about bankruptcy procedures, but in their circumstances I would not like my finances being investigated by the OR, so would be going back to the inlaws to turn this "loan" into the gift my wife told the mortgage company it was rather going down the BR route and risk having the mortgage company find out and reposes the house.

I don't know any actual cases of lenders repossessing a property where the borrowers have kept up with repayments. At the end of the day, lenders don't like to repossess.

However, if they did ever fall into arrears and risking repossession I don't expect the lender to be sympathetic.

Technically fraud has been committed - obtaining money by deception - so there is the risk that the OR won't be sympathetic. I can imagine an OR saying that either you admit to fraud or you accept that the loan repayments are not part of the bankrupt's necessary expenditure.

debt_doctor

Keep_pedalling wrote: »

....
in their circumstances I would not like my finances being investigated by the OR

No, me neither!
DD