What will the OR make of this?

debt23

Hi all,

Im looking for advice if I can, about going BR and what the OR would make of my situation and reasons for doing so - maybe best if i explain.....

I have a lot of debt, and wont be debt free for a very long time. I have, upto now, managed to keep the debt at bay with various self arranged payment plans - i get hassled a lot by my creditors, but thats part of the course I suppose, and I cant really blame them for wanting there money!

Oh - can I add that the debt mainly comes from financing a failed business (franchise) that I had.

Ok - whilst many have said to me, why not go BR in the past, I have not for two reason, first off, as I was making the payments on my payment plans there was no need to, and second (some would say most importantly, but its not really been like that) I owned a house with a large amount of equity in it - enough to pay back all i owed.

Now, lets look in detail at the house situation. Just under five years ago, when i first started running into financial trouble, i missed a mortgage payment - and my wife, who was scared I would miss more and loose the house to the mortgage company - brought the house off me with her own mortgage and took it all over herself 100%.

I must stress, this was not done to pull any clever stunts with those I owed money to, its just the way she wanted it. I was still fully aware that my creditors would have access to my share of the equity anyway at that stage.

Its also relevant to add that all this has obviously put a strain on my marriage, to the point that we did split up - we got back together again on the agreement that I keep my money problems to myself and they never effect the family - if anyone was to BR me and go after my equity in the house, that would have finished my marriage, so I have avoided this at all costs.

But (and correct me if i am wrong) its my understanding that once my wife has owned the house for over 5 years in her name alone, then I or my creditors have no interest at all in it.

Well, this five year point is approaching, and i must admit, as things stand at the moment, im starting to struggle.

Ive been making my debt repayments ok up to this point, but weve had another baby and im now having to stop working overtime to look after him - which means my income had really dropped.

This means im getting more hassle from my creditors which is now having a knock on effect at home with my marriage.

So, all this said, I am considering BR - but im worried about what the OR would make of it all - will he (or she, sorry) just believe that ive been messing my creditors around, waiting for this magic 5 year point, and am now trying to take the easy way out (although i now many on here will acknowledge that BR is not always the easy option)

And if the OR does think this - what could they do?

Again - i must stress - i never set out to play any games - this is just where i am.

Thanks all.

Debt23

worried123

Hi - I have just read your post and wanted to reply because nobody has yet done so! - I am sure that other, more sensible, people will post you some advice......

Although I went bankrupt a few weeks ago and have been through the process I do not know as much as many here but will give you my view point if it helps.....

I sold a house four years ago and I did have to mention this on the forms and the OR did want statements showing where all the money went....Also, at the actual court we were reminded by the judge that to have sold/disposed of a property within the last five years and not inform the court was a criminal offence.....so it is immensely important - as you already know - to allow this five year time lapse......after which you do not have to mention the house at all.....and infact, does the OR need to know at all.......At the end of the day it does not matter what the OR `thinks` - the rules give a five year time scale and once that has elapsed that is that.

Anyway - just my opinion and I hope that it helps a little bit.

backontheup

I agree with worried - after the 5 year mark has passed, you will not have to put it on the forms.

The possible problem that you may have is if you have continued to contribute to the mortgage significantly, even if the mortgage is in your wife's name. Of course, it can all be a moot point as you could have been contributing to bills and food.

It's a tricky one, but personally you have a couple of points on your side

1. You did actually split up with your partner at one point. Arguably, you did not move back to the family home as her partner. Again, don't take my word for it.

You do need some professional advice on this one. The fact is, if you have to declare yourself bankrupt, you are going to have to do it anyway. The OR and any subsequent appointed trustee's are very reasonable to deal with, and if there is negative equity in the home\you havent contributed to the mortgage, it will make life easier.

Sorry I cannot be any clearer, but you will need to talk to someone in the know

Richard_S

Hi debt23,

Until the 5 years have passed I wouldn't consider taking any formal advice because that will confirm that you knew there was a problem during that period of time. When the five years has elapsed I'd definitely take advice from a solicitor specialisng in insolvency or an insolvency practitioner, if you can be certain they're not just looking to sell you an IVA. It's more complicated than the usual questions about property and bankruptcy, and you need to get it right; there's a lot at stake here as you're obviously aware.

The O.R may well decide that even if you haven't got a 50% stake in the B.I of the property, you will have a 50% interest in any price rise from the date the property was transferred to your wife. That presumably won't amount to an insurmountable sum and you will be given time to raise the money.

None of us on here are experts or professionally trained; we can only offer our anecdotal suggestions and whatever information we've picked up along the way. You'll need to prepare yourself for a long drawn out battle as lots of us have found out when there's property involved.

Best regards

Richard

JCS1

If the house was transferred before April 2004 (when the enterprise act came into force), then it is unlikely that the OR would consider it misconduct and look at a BRO/BRU. The OR may call a first meeting of creditors with a view to appoointing an IP if they consider civil recovery a possibility.

debt_doctor

The beneficial interest issue is very real. Even though you do not own the property, you will almost certainly have some beneficial interest in it, and the OR will want it. Please take some detailed advice before you continue down the BR route.

Best wishes.