MIL bankcrupt 16 February 2021 at 9:32AM in Bankruptcy & living with it 12 replies 853 views

[Deleted User]

Hi,
My MIL has been made bankcrupt. We live in her house. Im unsure whether its a buy to let mortgage or not but I do know when has quite a bit of equity in the property, potentially 40-50k depending on the valuation of the property which is taking place today. 
How long before the house could potentially go on the market? As we are currently paying the mortgage and bills is there anyway we can protect ourselves (other than buying the property) from having to move out?
I also don't know exactly how much debt she is in. Although I do believe solicitors are dealing for her.
TIA

MattMattMattUK

You need to ask your Mother In Law. As it is not her primary home it will likely be sold, it would normally happen immediately. Are you paying the mortgage, or are you paying her rent? If you are paying the mortgage direct to the bank you are making things very messy, if you are paying her money to pay the mortgage do you have a rental agreement in place. 

If she has been declared bankrupt it is likely not a trivial sum. 

Notnewnotold

The property being sold does not end your tenancy - the new owner would become your landlord. Of course you could be served a S21 (either by your MIL or the new owner), assuming you are on a SPT rather than in the middle of a fixed term. But the eviction process right now could easily take a year plus to complete so there's no immediate cause for concern

I guess the question is how long do you want to stay? If indefinitely, then purchasing the property is your only real option, but that's no different from any other tenants situation...

EDIT: just reread your post - are you actually tenants? If you are just paying the mortgage it sounds like you
may have built up a beneficial interest in the property. But this is probably a question better asked on the house buying board - far more expertise there. Maybe a board guide could move the thread over?

[Deleted User]

amy12456 said:

Hi,
My MIL has been made bankcrupt. We live in her house. Im unsure whether its a buy to let mortgage or not but I do know when has quite a bit of equity in the property, potentially 40-50k depending on the valuation of the property which is taking place today. 
How long before the house could potentially go on the market? As we are currently paying the mortgage and bills is there anyway we can protect ourselves (other than buying the property) from having to move out?
I also don't know exactly how much debt she is in. Although I do believe solicitors are dealing for her.
TIA

You were given some good advice on your previous threads on this topic including being told to read: 

Post 6: Repossession: what if a LL's mortgage lender repossesses the property?

luvchocolate

The OR will be dealing with the property..maybe involved a trustee as mine did..
Was the BR recent?

[Deleted User]

luvchocolate said:

The OR will be dealing with the property..maybe involved a trustee as mine did..
Was the BR recent?

It was around November time I think..

JCS1

With that much equity in the property, I would expect an Insolvency Practitioner to be appointed as Trustee.  

luvchocolate

JCS1 said:

With that much equity in the property, I would expect an Insolvency Practitioner to be appointed as Trustee.  

Yes I agree it's not clear if she lives in another house so 2 possible properties 
I would expect a meeting with trustee..maybe she has more information than what's being shared with OP

[Deleted User]

luvchocolate said:

JCS1 said:

With that much equity in the property, I would expect an Insolvency Practitioner to be appointed as Trustee.  

Yes I agree it's not clear if she lives in another house so 2 possible properties 
I would expect a meeting with trustee..maybe she has more information than what's being shared with OP

From previous threads MIL has moved out and into a rental property. The OP then pays money to the MIL not the mortgage lender each month. 

luvchocolate

Lover_of_Lycra said:

luvchocolate said:

JCS1 said:

With that much equity in the property, I would expect an Insolvency Practitioner to be appointed as Trustee.  

Yes I agree it's not clear if she lives in another house so 2 possible properties 
I would expect a meeting with trustee..maybe she has more information than what's being shared with OP

From previous threads MIL has moved out and into a rental property. The OP then pays money to the MIL not the mortgage lender each month. 

It's all very strange normally rent would be paid to trustee. 
Maybe more to this 

[Deleted User]

luvchocolate said:

Lover_of_Lycra said:

luvchocolate said:

JCS1 said:

With that much equity in the property, I would expect an Insolvency Practitioner to be appointed as Trustee.  

Yes I agree it's not clear if she lives in another house so 2 possible properties 
I would expect a meeting with trustee..maybe she has more information than what's being shared with OP

From previous threads MIL has moved out and into a rental property. The OP then pays money to the MIL not the mortgage lender each month. 

It's all very strange normally rent would be paid to trustee. 
Maybe more to this 

I think this was before MIL applied for bankruptcy.  My guess would be that the lender doesn't know MIL is no longer living in the property.