My situation, any advice appreciated

Xbigman

zAndy1 wrote:

xbigman.. what I mean is that if I'm declared bankrupt my share of the equity in the house goes to the OR. It is then possible for somebody to buy that share from the OR to prevent the OR having to sell the property to realise that equity. My brother has already offered to buy my share from the OR should I go bankrupt.

OK I see what you are talking about now. My experience in this area is limited as the new laws are different now but I think this would work. Only question, how do you pay back your brother?
Given your last post I would go down the IVA route. You seem to have researched this option pretty well and it looks workable.
Regards



X

Malestrom

Xbigman wrote:

Only question, how do you pay back your brother?
Given your last post I would go down the IVA route. You seem to have researched this option pretty well and it looks workable

Remember, both before and during the period of bankruptcy you are not allowed to make any payment or offer of financial reward or incentive to the person that buys the beneficial interest.

I'd agree with Xbigman, unless the IVA is rejected then I don't think i'd be willing to take the gamble with my home.....

zAndy1

Thanks guys.. appreciate the input

Squiffy

Another thought. If your brother buys your share of the home, then what happens with your mortgage payment?

Would the OR see that you are no longer paying as much mortgage, and then insist that a bigger monthly payment went towards your debts?

zAndy1

Well I assumed we'd just carry on paying the mortgage as normal to be honest. I don't really think I've thought it through very well though have I! To be honest I'm 99% certain now we're going to go for the IVAs with Shaws insolvency. At least when it's 2 IVAs if circumstances change perhaps one of us will have a chance of avoiding bankruptcy! My wife's payments should be pretty low (the majority of her contribution to the IVA will be from the house equity, her monthly payments will probably only just cover the fees!) so it should be possible to maintain those if something did go wrong down the line and as long as that happens there's always the possibility of keeping the house even if I'm made bankrupt. I really did feel better after speaking to Shaws and DFD for that matter today however I still think getting our IVAs accepted (and mine in particular) is not a forgone conclusion by any means. I don't want to think about the consequences of it not being accepted at the moment to be honest, cross that bridge and all that.....

Xbigman

Squiffy wrote:

Another thought. If your brother buys your share of the home, then what happens with your mortgage payment?

Would the OR see that you are no longer paying as much mortgage, and then insist that a bigger monthly payment went towards your debts?

Thats a good question and any answer is probably speculation. But, the OR would presumably put a charge on the property for 50% of equity *if* it was sold (OR would not force a sale yet). Your brother comes in and offers to buy your 50% from OR. Half of the mortgage is paid off and OR gives equity to your creditors. You now live in a house owned 50/50 by your wife and brother and your wife now has a mortgage half the size it was. The OR should look at your situation and allow you to pay half of all bills, but would this include *her* mortgage is a very big question.
When this sort of thing happens in a divorce the mortgage lender can make it very hard and always starts slapping on fees. They also only agree if the one remaining has the credit rating for the whole mortgage. This might be a problem with your wife having her own debts too. Then theres your brother. Does he have the cash? Because getting a mortgage to buy you out in these circumstances won't be easy.
This whole situation looks a nightmare, avoid it at all costs.
Regards




X

zAndy1

No half of the mortgage isn't paid off at all. My share of the equity becomes my brothers. The mortgage is still for the same amount , nothing is paid off the mortgage at all. Whether I remain as any part owner of the property I'm not sure. As you said though, nightmare and to avoid if possible. Might have to look into it further if the IVAs are not approved though!

Xbigman

OK I see what you are saying now. Your brother won't buy your share of the house, only your share of the equity. So you still have the full mortgage.

I'd say that this will be impossible to plan before hand and you would have to wait on the OR to actually decide to do it and give you the valuations and costs. It might not work out that you could keep the house. Definately an IVA now methinks.
Regards



X

zAndy1

I thought as long as somebody was prepared to buy my share of the equity that it wouldn't be a problem, it saves the OR having to sell the house with the fees that involves and allows the OR to release that equity as quickly as possible. Also in the current climate of falling or house prices it wouldn't make sense for the OR to sit on it for a while in the hope they'd get more equity from a sale at a later date.

zAndy1

Another idea. My brother might also be willing to pay off the tesco loan. That would remove a bid chunk of my IVA total and remove the need for my wife to do an IVA at all as the only reason she's doing one is because of the joint tesco debt. Is it legal for us to do this or is it seen as preferential treatment of a creditor? I don't see how there's much anyone can say about it if my brother decides to settle a debt I have to be honest. Or would the problem be that in order to do that he'd have to give me or my wife the money and then if we distributed that money to only one creditor it wouldn't be ok to do that?