Deed of trust and bankruptcy

Morriganraven

Hi. I was made bankrupt in 2010 I owned a property with my parents and then husband. We were tenants in common with a deed of trust stating % owned etc.
The insolvency trustees are still holding my portion and won't accept the deed which proves at the time I was in negative equity.

Mouse007

How does the deed "prove" you were in negative equity? Surely it just shows the % ownership (of equity).

Who prepared the deed, yourselves (DIY) or a solicitor?




In any event was the property your home? if not it's gone. All assets become the property of the OR on bankruptcy and only the family home may revert to the bankrupt if there is no equity.

silvercar

Mouse007 wrote: »

...In any event was the property your home? if not it's gone. All assets become the property of the OR on bankruptcy and only the family home may revert to the bankrupt if there is no equity.

Not sure that is strictly true. If the property is in negative, the OR could chose to have no further interest in it.

Mouse007

If the property is not the family home the benefical interest in it will remain with the OR until it is dealt with.

It would be very unusal for the OR (exceptional circumstances only) to disclaim interest, but even if they did future profits and capital would be held by the bankrupt on trust for the Crown.

The beneficial interest in the asset never reverts to the bankrupt.



For example, if the property is rented out:


31.12.85 Tenanted property is not usually a family home

It is important to remember that a tenanted property is not usually a family home for the purposes of section 283A (see Chapter 31.3, Part 3), and as such the bankrupt’s beneficial interest will not re-vest in the bankrupt after three years, it will remain in the bankruptcy estate until it is dealt with (see Part 4).


Part 4


31.12.152 Ways that a tenancy may be brought to an end

When the official receiver is trustee, he/she will, at some point, want to dispose of his/her interest in a jointly owned tenanted property. An AST agreement and/or the official receiver’s interest in a jointly owned tenanted property will be brought to an end following the occurrence of any of the following events:

1) An insolvency practitioner is appointed as trustee (see paragraphs 31.12.154 – 31.12.155).

2) The tenant decides to leave or is evicted from the property (see paragraphs 31.12.156 – 31.12.166).

3) The official receiver, as trustee, sells the bankrupt’s interest in the property to a solvent owner, third party or back to the bankrupt (see paragraph 31.12.168 – 31.12.179).

4) The mortgagee takes possession action against the property (see paragraphs 31.12.180 – 31.12.190).

5) The mortgagee appoints a receiver of rents (see paragraphs 31.12.191 – 31.12.195).

6) The official receiver, as trustee, disclaims his/her interest in the bankrupt’s beneficial interest in the property (exceptional circumstances only) (see paragraphs 31.12.196 – 31.12.209).


These final paragraphs (see link above 196 - 209) make it quite clear the bankrupt does not re-acquire any beneficial interest in the asset. The beneficial interest becomes bona vacantia and as such then belongs to the Crown.