Solved - Bankrupt but bequeathed share of property

fatbelly

Has the trustee who owns the house been informed of the OR's potential interest?

dave3dtg

Minkym00 said:

A few things to comment on from above posts.

The OR does have 3 years to deal with a property, but only if its the OP’s family home that they actually live in. If not this does not apply. However “dealing with” can simply mean applying for a charge that will be satisfied when the property is eventually sold when OP’s mum passes. In these circumstances this is extremely likely to happen. The OR will not do anything to put themselves at reputational risk (they’re not like HMRC!) 

The beneficial interest is worth around £54k right? Why would that “disappear into government coffers”?? There is an order in which any monies will be distributed according to the legislation, it cannot just be kept. The costs of managing the estate are paid first, then the OR’s fees, then the Insolvency Practitioner’s fees (if in place), then any secured creditors, then unsecured creditors. Anything left over goes to the bankrupt.

All bankrupts and creditors are treated equally under the law, no matter how debts have been incurred. Why should you have the money to start a business or otherwise? Your debts may be with financial institutions, i don’t know, but what if a bankrupt owed your mum money - should they be given the money to start again?

The OR’s letter is not claiming the house, surely? If it is go back and explain that it that is incorrect. They can only claim your beneficial interest.

Yup, it certainly does...letter ASTCAA...insists that nothing can be done with the house and that it is now in the ownership of the OR. I've got screenshot of it but it's got my address on.

Attached to another file the OR sent a copy of the law...Section 283...which I expect you know...it says in 1)a) the OR has a right to all property owned or vested in the bankrupt at the commencement of the bankruptcy. For me it says nothing about after and the keyword in it is "vested". Vested means strong...I have my name, albeit wrongly, a one third share of a quarter share in a property that I have no control over, no influence over and am not responsible for. I pay no bills for the property and no maintenance costs. I most certainly don't have a vested interest at all, even the OR can't take what isn't there. So in the essence of the Law the OR cannot legally claim any ownership of even my third of a quarter let alone the whole property and can only claim something of substance that I have a strong interest in.

Also, if the OR does indeed have a claim on my non existing vested interest as of the moment my father passed then by rights I should not be bankrupt from that moment. If all bankrupts are treated the same and my bankruptcy will be paid off at some point then I should not be suffering the same fate as a bankrupt because a bankrupt doesn't have to pay any of their debts after discharge yet I will be bankrupt and suffer the effects of being bankrupt for a year.

I'm not saying I should have the money to start my business...I'm saying what if I had the money...subtle difference. For instance...I presently work in a job anyone can do, that anyone quite possibly won't have a business to start. So if I start my business then that frees up my current work for someone else who needs it. So often people see the term self-employment but read it as selfish-employment so state "why should someone have help or assistance in starting that business"...well I say why shouldn't they, not least for the reason stated above. With my business my market research suggests 70% of my intended market will at some point in the five years after availability purchase my product/service. 70% over five years represents a turnover of £480M with two thirds as profit. That means £480M into our economy. It represents substantial employment from one employer (for people who might not necessarily be working now). Then there's the knock on effect of those people working and the person who takes over my present job. However, instead, our wonderfully short sighted society has, due to illness, periods of unemployment and low pay, given me as much as £160K to survive...yet all I ever needed was £30K to start the business. Further into the future I will, as I have been, a burden on the NHS and society in general as I've never been able to afford pension payments. So by the end of my life I will have cost society hundreds of £1000s simply because that same society doesn't have to foresight to help or assist people with self-employment.

dave3dtg

fatbelly said:

Has the trustee who owns the house been informed of the OR's potential interest?

Yes they have. The trustees are my Mum and brother, well they are trustees of my Dad's Will anyway. As for the trust set up for the house I don't know if they are.
As you can imagine my Mum, 83, is destroyed. She is so upset at the thought of losing her home or being forced to move she cries almost constantly. In this instance the OR's cruelty knows no bounds.

dave3dtg

Minkym00 said:

A few things to comment on from above posts.

The OR does have 3 years to deal with a property, but only if its the OP’s family home that they actually live in. If not this does not apply. However “dealing with” can simply mean applying for a charge that will be satisfied when the property is eventually sold when OP’s mum passes. In these circumstances this is extremely likely to happen. The OR will not do anything to put themselves at reputational risk (they’re not like HMRC!) 

The beneficial interest is worth around £54k right? Why would that “disappear into government coffers”?? There is an order in which any monies will be distributed according to the legislation, it cannot just be kept. The costs of managing the estate are paid first, then the OR’s fees, then the Insolvency Practitioner’s fees (if in place), then any secured creditors, then unsecured creditors. Anything left over goes to the bankrupt.

All bankrupts and creditors are treated equally under the law, no matter how debts have been incurred. Why should you have the money to start a business or otherwise? Your debts may be with financial institutions, i don’t know, but what if a bankrupt owed your mum money - should they be given the money to start again?

The OR’s letter is not claiming the house, surely? If it is go back and explain that it that is incorrect. They can only claim your beneficial interest.

Here's the letter.....

normanna

The letter is not saying they will throw your mother out of the house.  If anyone is alarming your mother and causing her undue stress it is you.  Shame on you for upsetting her.  If and when the house is sold they will take what you owe 

normanna

dave3dtg

I hadn't seen your earlier post about how low you are feeling so my comment may have been a little strong.  Please stop catastraphising.  Your mother will NOT be thrown out of the house, the letter advises it cannot be sold without the OR's pemission so they can ensure your debts are paid.  Please listen to what others have posted here for your and your mother's sake.

bradders1983

Also you havent blanked out the bankrupcy ref number so anyone can look up who you are anyway if they so wish.

Echo the above though. It will merely be a charge on the property and only for the percentage you stand to inherit, and they arent demanding a sale this instance, for your own peace of mind you can ask them to confirm this in writing. Its a standard letter than doesnt account for you only having claim to such a small percentage 

Minkym00

You are not reading the letter correctly. In this context the “property” is your inheritance, not the actual house. The letter would say the same whether your inheritance related to a house or not.

You can argue all day long that you don’t have a vested interest but if your father willed you a share then you do have a vested interest, simple as that.

“...by rights I should not be bankrupt from that moment”. How do you figure that? You went bust with £65k of debt and you came into a beneficial interest of £54k didn’t you? Still insolvent then. If, by the time the house is sold there is enough to pay your bankruptcy debts and the OR’s fees, then you can obtain an annulment of your bankruptcy. 

I can’t make head nor tail of your next point and seems to be rambling into fantasy. But if you’ve got an idea that could make that sort of money then pursue it. Find the investment. 

You have been told numerous times that the OR is not going to throw an 83 year old lady from her home, a judge would not allow it. The OR is not being cruel. With respect, you need to get a bit of a grip frankly.

fatbelly

dave3dtg said:

fatbelly said:

Has the trustee who owns the house been informed of the OR's potential interest?

Yes they have. The trustees are my Mum and brother, well they are trustees of my Dad's Will anyway. As for the trust set up for the house I don't know if they are.

Your mum and brother would be  executors of the will.

When I originally asked you to check whether the house was jointly owned with your mother (which is usual and would mean that your father's clause in his will was meaningless and the house became 100% owned by your mother on his death)  you said that you checked at the Land Registry and found the house was in fact owned by a trust. Those trustees could be anyone, maybe the solicitor who set it up.

Now you have told the OR that you own a share of the property the OR has to protect her potential position, hence the letter. There needs to be dialogue between the Trust that owns the house and the OR who is trying to find out whether they have a legal interest.. It's quite possible that you have no beneficial interest here and so the OR would have no claim on it.

As I posted  before from the Technical Manual:

Where the official receiver encounters a protective trust, and the property is of sufficient value to justify it, he/she should seek legal advice to establish the validity of the trust and explore any means of challenging it.

dave3dtg

fatbelly said:

dave3dtg said:

fatbelly said:

Has the trustee who owns the house been informed of the OR's potential interest?

Yes they have. The trustees are my Mum and brother, well they are trustees of my Dad's Will anyway. As for the trust set up for the house I don't know if they are.

Your mum and brother would be  executors of the will.

When I originally asked you to check whether the house was jointly owned with your mother (which is usual and would mean that your father's clause in his will was meaningless and the house became 100% owned by your mother on his death)  you said that you checked at the Land Registry and found the house was in fact owned by a trust. Those trustees could be anyone, maybe the solicitor who set it up.

Now you have told the OR that you own a share of the property the OR has to protect her potential position, hence the letter. There needs to be dialogue between the Trust that owns the house and the OR who is trying to find out whether they have a legal interest.. It's quite possible that you have no beneficial interest here and so the OR would have no claim on it.

As I posted  before from the Technical Manual:

Where the official receiver encounters a protective trust, and the property is of sufficient value to justify it, he/she should seek legal advice to establish the validity of the trust and explore any means of challenging it.

Yep, they're both executors.

My parents were Tenants in Common. His Will stated half of his half of the house goes to my Mum and the remaining half of his half is to be split equally between my two brothers and I. A land registry expert, via Age Partnership, was reading out everything about my parents directly from the land registry while on the phone and said nothing could be done with the house, i.e raise equity or even sell, without express permission of the trustees and a court order.

My brothers maintain his will was drawn up with professional negligence and the three of us shouldn't be on it...but I'm not so sure, it was after all a way for my old man to leave us something and protect the house.

I have no beneficial interest at all, even before in the interim period between going bankrupt and his death. My share before bankruptcy is the same as after bankruptcy...no beneficial interest, no way of selling my "share", no way of raising equity. 

I've seen parts of bankruptcy cases and law that use words like ownership, absolute and vested in relation to a bankrupt and property...none of those describe my situation whatsoever.

The solicitor who drafted the Will has passed away. My brother contacted the firm and gave them rather a lot of grief. So if he is a Trustee then I'm not sure what happens there.

I've purchased some documents from the Land Registry and will look at them tomorrow hopefully.

My brother is insisting my Mum writes another Will which excludes me and "well we'll get you added after your discharge". But he also wants her looked at mentally so if she's declared not of sound mind or body (highly unlikely) then she won't be able to add me after my discharge.