Shared ownership and bankruptcy

WickettheEwok

Hi all,
My husband and I own 25% of a shared ownership home. My husband may have to declare bankruptcy soon. Does anyone know if we will lose the house, considering we only own a small part of it?

elsien

https://www.insolvencydirect.bis.gov.uk/freedomofinformationtechnical/technicalmanual/ch25-36/chapter31/part3/part12/Part%2012.htm

fatbelly

The Official Receiver will have an interest in the property and this will have to be protected. However, an order for sale is only one option that the OR will consider. The whole guidance is here

https://www.gov.uk/guidance/technical-guidance-for-official-receivers/28-freehold-and-leasehold-property

I do not recommend that property owners declare bankruptcy Why is that the only option?

ellgren

The effect of bankruptcy will generally mean that your husband's share of the equity in the property will be an asset of his bankruptcy estate. That means if the value is not insignificant and if you are unable to raise sufficient funds to acquire his interest then the Trustee in Bankruptcy will usually look (and is generally under an obligation) to realise it for the benefit of creditors. This can lead to a court order for sale of the property. 

Disclaimer - this is simply for information purposes only and should not be replied upon for any purposes, including but not limited to your chosen course of action. It is suggested and even recommended that you take independent professional advice on the facts of your case.

sourcrates

@WickettheEwok,

Might be better off giving us the full picture here, and why you think bankruptcy is the only option.

A lot of the time people tend to jump the gun thinking they must act straight away, when in reality debt collection takes a very long time, and especially so if its all consumer credit debt related.

Bankruptcy is never a good idea if you have assets, especially a house.

WickettheEwok

He has a court case against a previous employer for disability discrimination and has been told if he loses he may have to pay £125,000 for their solicitors fees. We have only just bought the shared ownership house. The court hearing is in November.
 

fatbelly

WickettheEwok said:

He has a court case against a previous employer for disability discrimination and has been told if he loses he may have to pay £125,000 for their solicitors fees. We have only just bought the shared ownership house. The court hearing is in November.
 

On the basis of that, there's zero point in thinking about bankruptcy now, in July

sourcrates

If he went bankrupt, he would be handing the house to them on a plate.

If he did nothing, the best the solicitor could hope for would be a restriction on the property, as it is jointly owned, they could not force a sale.

So bankruptcy would be the last thing he should do.

ResourcesShared

I'm sorry to hear about the problems you are facing. You and your husband might want to consider contacting the Leasehold Advisory Service and/or Shelter for advice on your specific situation and options. Links below.
https://clients.lease-advice.org/#/
https://england.shelter.org.uk/get_help/helpline