Annulment of bankruptcy

CStar75

Hi, my husband was made bankrupt for old business debts in Dec 2018 which he was personally liable for. We jointly own a property with lots of equity, which can afford to pay off the all unsecure and secure debts but can't access it other than a bridge loan and sale within 12 months, due to lack of affordability for a remortgage and the bankruptcy position. I personally can't pay it off either and we are too young for equity release. My question is, is there any other way we get out of the situation without losing the family home as we are joint owners but only one of us is affected? We have spoken to an IP who said the creditors are unlikely to accept an IVA as the bankruptcy will pay back the debt back quicker. I am trying to look at the positives in that we do have a way out but wondered if anyone had any experience like us, as we want to exhaust all other options first to get it annulled. Thank you.

jonesMUFCforever

Sell the property while you can or get it sold at auction by the trustee?

From what you have written I can't see why the bankruptcy should be annulled but I don't see why it went this far if you had so much equity in your property?

CStar75

I agree it shouldn't have gone this far but that's lawyers for you, giving you the belief it was a case worth fighting but only ended up costing us more money and heartache! Is there no other way then surrending or selling our home?

JCS1

Details here on how to annul, you could do on basis of payment in full, but that is all debt (not just the old business debt) + OR fees, plus IP fees.

https://www.gov.uk/bankruptcy/cancel-a-bankruptcy

CStar75

So I'm guessing I don't have a leg to stand on legally even though I have more equity than what is repayable to the debts and the mortgage? So frustrating as it's our equity and we can't get to it any other way than a sale at the present time unless there is another option, that I haven't found yet? Thanks for your feedback so far.

Minkym00

You can only get an annulment in two ways. The first is ‘ought not’ which is where you can prove either the debt was never owed or there was some sort of technicality (I.e. you weren’t “personally served”). The second is for ‘paid in full’ which includes the debts and all the fees. As there is equity in the property the OR will get an insolvency practitioner in and they will sell the property and charge extortionate fees.

If you sell it yourselves then you will save a lot of cost. If you put it on the market now then the OR is is likely to allow time to do this. They will instruct the conveyancing solicitor to hold your husbands beneficial interest when it sells and will then claim it for repayment of debts and fees. The fees will be £8k plus 15% of his beneficial interest i.e. 50% of the equity. You can avoid the 15% OR fee if you can get a third party (family member?) to pay the debts off first and then repay them when the house sells.