Bankruptcy and Inheritance

maxmycardagain

So a Co-executor and main beneficiary (50%) of an estate (house) of £200,000 is most likely to run out of funds before any sale is completed, basically he will go bankrupt

What is the stance of the IS in cases like this?

Keep_pedalling

Why do you think running out of funds means bankruptcy? If their have £100k coming to them in the very near future bankruptcy is unlikely to be a necessity. Can you provide more detail of there financial position?. 

fatbelly

Can't see the point of declaring bankruptcy if you are about to liquidate a large asset.

Has he never heard of Full & Final Settlement deals?

elsien

fatbelly said:

Can't see the point of declaring bankruptcy if you are about to liquidate a large asset.

Has he never heard of Full & Final Settlement deals?

Maybe because they are hoping to go bankrupt then keep the inheritance?

maxmycardagain

elsien said:

fatbelly said:

Can't see the point of declaring bankruptcy if you are about to liquidate a large asset.

Has he never heard of Full & Final Settlement deals?

Maybe because they are hoping to go bankrupt then keep the inheritance?

He has a shortfall in his income, so BR is roughly 7 months away, he will be insolvent

He cannot liquidate the asset without a buyer

He expects to pay his debts OUT of the income BUT, that depends ON the income

I didnt know if the IS would take the property, auction it, pay the debts and return any residue

there are 4 beneficiaries with an interest who might object to a half price sale to say the least

maxmycardagain

Keep_pedalling said:

Why do you think running out of funds means bankruptcy? If their have £100k coming to them in the very near future bankruptcy is unlikely to be a necessity. Can you provide more detail of there financial position?. 

Yes, no income and will be £4000 overdrawn plus credit cards

maxmycardagain

fatbelly said:

Can't see the point of declaring bankruptcy if you are about to liquidate a large asset.

Has he never heard of Full & Final Settlement deals?

no, which is what, defer BR till estate settled eventually?

Keep_pedalling

maxmycardagain said:

Keep_pedalling said:

Why do you think running out of funds means bankruptcy? If their have £100k coming to them in the very near future bankruptcy is unlikely to be a necessity. Can you provide more detail of there financial position?. 

Yes, no income and will be £4000 overdrawn plus credit cards

People do not go bankrupt for such small sums of unsecured debt, and if paying off those credit cards is going to make him go overdrawn on his bank account he should stop paying them now nothing bad will happen to him.

Who is this IS you refer too? 

RAS

Definitely not an insolvency situation. 

Just stop paying anything other than essential debts. I'd even consider delaying utilities other than CT in an emergency. No one can take legal action until the debts default and that's likely to be 6-18 months.

BR or an IVA would leave him paying back the whole debt and the IP fees, so he'd lose even more of his inheritance.

Are there any other liquid assets in the estate?

maxmycardagain

Keep_pedalling said:

maxmycardagain said:

Keep_pedalling said:

Why do you think running out of funds means bankruptcy? If their have £100k coming to them in the very near future bankruptcy is unlikely to be a necessity. Can you provide more detail of there financial position?. 

Yes, no income and will be £4000 overdrawn plus credit cards

People do not go bankrupt for such small sums of unsecured debt, and if paying off those credit cards is going to make him go overdrawn on his bank account he should stop paying them now nothing bad will happen to him.

Who is this IS you refer too? 

Insolvency Service

maxmycardagain

RAS said:

Definitely not an insolvency situation. 

Just stop paying anything other than essential debts. I'd even consider delaying utilities other than CT in an emergency. No one can take legal action until the debts default and that's likely to be 6-18 months.

BR or an IVA would leave him paying back the whole debt and the IP fees, so he'd lose even more of his inheritance.

Are there any other liquid assets in the estate?

so when the overdraft cant pay the bills, and credit cards cant pay fuels or car insuramce they shouldnt go BR?
the property is the sole item in the estate