Trustee appointed writing to us 2 weeks 3 years after bankruptcy date

reallystressed

Hello My husband was made bankrupt on 16 July 2013
At the time he was not earning much and after out income and expenditure we were left with a deficit so he was put in a nt ipa
We filled out another income and expenditure after the end of the tax year of his bankruptcy
As there was not really any change in circumstances we were told by the people collecting the iPa that it Was finished
He was discharged in July 2014 and became self employed
Earning more money
We received a letter regarding beneficial interest in oct 2015 and we were offered to buy out his interest we could not afford this so we did not take any offers to buy it out
We were told in the letter from official receiver if no offer WA made they would likely pass it on to a trustee who could sell or put a charging order on the home
We heard nothing and the 3 year from bankruptcy date came on 16 th July 2016
Still heard nothing
Today we have received a letter dated 27th July 2016 from Kpmg to say they became trustees on 16 March 2016
And they would write to us in due course regarding assets
And also saying my husband gives permission to his creditors to take any income tax refunds due to him up to the tax year 2017
Now I am really worried as my husband is now self employed and earning well again but I thought all financial obligations stopped after the ipa as at the time we were not earning much
Will they ask us to start paying money again?
And also shouldn't we have had some notice that the bankruptcy had been passed on to a trustee? I thought the trustee had 3 years from date of bankruptcy to deal with beneficial interest?
Any advice would be greatly appreciated

TDSO

If your husband is self-employed he is unlikely to have income tax refunds due to him. So don't worry about that. As regards your family home, the trustee has left it too late. The trustee should have sought a charging order before 16 July 2016 but failed to do so. Keep that letter from KPMG, it is like gold dust. Being appointed trustee on 16 March 2016 means nothing. The first action the trustee took was a letter dated 27 July 2016, which is too little too late. Suggest writing back to KPMG saying that the beneficial interest in your home was never dealt with, and as per legislation reverted automatically to the former bankrupt on 16 July 2016. It's unlikely to be worth their while to fight this, your case is too strong.

reallystressed

Thank you so much for your reply
That has clarified things for me
I did think they had left it too late but was unsure and have been searching the web and everything I see says it has to be dealt with within 3 years of bankruptcy.but I was unsure if when it is handed over to trustee they have 3 years from that date..
On the letter it doesn't actually say anything about beneficial interest it just says they are dealing with assets (which I presume is the beneficial interest as that is the only asset my husband has) and tax affairs
So when I write back should I say any assets have not been dealt with as per legislation?
They must know they have left it too late?
Thank you again for your help 😊

kittykat31

Hello 'reallystressed'. Just letting you know that I am going through a very similar situation to you at the moment. Our date for our interest to be dealt with is the 23rd August. After years of to-ing and fro-ing to try and buy back the interest without success we were yesterday informed that our case too has been passed to KPMG. I have emailed to the for more information on what will happen next and we are completely distraught with the now very real prospect of losing our home. We have 2 very small children and only one income and the houses to rent in our area are double how much we are currently paying on our mortgage. I just want you to know that you are not alone in going through this very stressful and distressing time. I really hope the advise that TDSO gives you helps you out x

National_Debtline

Hello reallystressed and kittykat,


I thought it may help to give you reference to some of the legislation in this situation so you are armed with the right information. So, under Section 283A Insolvency Act 1986 the trustee has 3 years to deal with the property which should run from the date of bankruptcy. The trustee must either: -


- realise the interest by selling your husbands interest to you or a third party
- apply for an order for sale
- apply for a charging order in respect of your husbands interest
- come to an agreement about the payment of your husbands interest


If the trustee hasn't done any of these then the property should re-vest to the bankrupt on the 3 year anniversary of the bankruptcy order. However, the exceptions to this rule would be that the 3 year period can be extended either if your husband did not inform the OR of his interest in the property within 3months of being declared bankrupt, or if your husband had more than one marital home or if there are exceptional circumstances the 3 year period can be extended by the court (taking all information into consideration). I hope that helps,


Laura
@natdebtline

kittykat31

Thank you National debtline for that response. I received a letter from KPMG today saying that they only received my case yesterday so are having to speed the process up in order to get it done before the 3 year deadline. So, they are already instructing solicitors to draw up a draft app for possession and sale of the property and then are putting it on hold until I've had a chance to see if i can buy the interest back. Are they allowed to do this?

Also, can I apply to have the possession order suspended for a certain time citing the very young age of our children and the fact that rental properties are very rare around here and double the cost of our mortgage? I was informed that if I chose to sell the property myself I will have to vacate the property BEFORE exchange of contracts so I will have to wait for my husbands BI to be released until we can put a deposit down on a rental property.

And also, I have read that people have simply stopped paying their mortgage in order to save for rent deposits once a order of sale has been granted. This can;t be right can it\?

Thank you

P.s. sorry for hijacking your post reallystressed x

kittykat31

sorry on another note I have just seen this in the insolvency act:

31.3.187 Considerations under the Human Rights Act where official receiver is seeking an order for sale

The court has held that the protections afforded under the Act (see paragraph 31.3.185) mean that the power of the trustee to seek an order for sale of a property are not at odds with the protection of family rights available under the Human Rights Act [note 28] [note 29], unless there is a (very) late application for an order for sale, in which case the court will consider the merits of the application for possession/sale [note 30].

Does that mean they have to give you a certain amount of notice before applying for an order of sale? How late is a very late application?

silvercar

Thank you National debtline for that response. I received a letter from KPMG today saying that they only received my case yesterday so are having to speed the process up in order to get it done before the 3 year deadline. So, they are already instructing solicitors to draw up a draft app for possession and sale of the property and then are putting it on hold until I've had a chance to see if i can buy the interest back. Are they allowed to do this?

They can work as fast as they are able, they still have to follow the legislation. They can't speed up legal processes. Don't agree to anything that requires you to respond quicker than that required by law just because they are at risk of hitting the deadline.

By 'draft app for possession' I'm guessing you mean applying to the court for a possession order; 'putting on hold' that they will then request to the judge to suspend to allow you time to consider buying the beneficial interest.

Maybe National Debtline can confirm the exact timescales of the process, from what he posted above it looks like the application needs to be made to the court by the 3 yr deadline. So 18 days from today they need to make the application. I would think your defence would be that you haven't been consulted fully. It may be in your interests to filibuster with them to get beyond that deadline. Maybe communicate with them and suggest you may buy back the BI depending on valuations. If you offer to get valuations from local estate agents, that could take some time....

reallystressed

Hello kittykat I really feel for you it's awful I know it can happen as a consequence of bankruptcy but to get so far amd then this is awful

National debt line thank you for your reply
The official receiver did know within 3 months of the br about my husbands interest as I have the interview transcript and it states on there that our mortgage was £174000 and we estimated the home to be worth around £195000-£200,000 although that was just our estimate as we had looked about 6 months prior to the bankruptcy to see if we would be better off selling the home as my husband was in massive debt with hmrc who eventually petitioned for the br
And I think now it might have been possibly worth around £210000-£220,000 but regardless they knew he had a home that he had interest in and nothing was stopping them from valuing it?
When the official receiver wrote to us in October 2015 he estimated the interest to be around 5500 I don't know how he came to that figure as I was sure there was more but we couldn't afford at the time to buy it wether it was £5000 or £50
So we didn't make an offer
I was prepared to lose the home in October 2015 when we received the letter but as time went on we heard nothing and then as I said we received a letter from Kpmg dated after the 3 years so as far as I can see they have not dealt with the interest according to legislation so are we right to think the interest is ours now?

kittykat31

It sounds like you've had a lucky escape reallystressed as I'm sure they can't take any action if they have missed the deadline.

National Debtline - one of your advisers on the phone strongly advised that I should attend the possession order hearing. I have 15 days until the 3 year deadline is up (11 working days) and I haven't yet received a date or place for the hearing. I read on the shelter website that you should have at least 21 days notice for a repossession court hearing. Is this the same for my case?

section 283a says that the IP should have 'applied for an order of sale' before the 3 year deadline. Does this mean my IP would have to have attended the court possession hearing before the 23rd August deadline?

Any advice or support very gratefully received. We are finding this extremely distressing and, as we only have 2 weeks left until our deadline, we are frantically trying to arrange for legal advice.

Thanks again

National_Debtline

Hello again to you both,


To reallystressed - I would suggest that you write back to KPMG and quote the legislation that I have detailed for you in my last post, and state that as the 3 year deadline has passed and they have not acted within that time, and so the property is no longer theirs to deal with. Ask them for written confirmation that the matter is closed.


Alternatively, if they could demonstrate that they had successfully applied to extend the 3 year deadline or that one of the exceptions applies, and that is why they are still acting, then they may be able to take action. But, if you have had no paperwork regarding this - that is unlikely. If they fail to provide details of the exception that applies but continue to chase you then I would suggest a complaint, which you can do online here.


To kittykat - Your situation does sound especially complicated and if we are now talking to you on the phone we will have more details about what is happening so our advice will be accurate for you. I would suggest you give us another call to go through anymore questions you have. Good luck to you both,


Laura
@natdebtline