House May Be Repossessed If Something Isn't Done Soon

chez000

My son has proposed I sell him the house for ~£280,000 (the value of the mortgage) and then declare bankrupty; writing off the outstanding £120,000. Would this be possible? We may be able to obtain 2 valuations from different estate agents in this price range, what risk would the Estate Agents be taking on if they gave such a valuation on a property that was valued on Friday for £470,000 by a different Estate Agent? - could I just argue it was a quick sale... clutching at straws a little perhaps - if I declared bankrupty, would they investigate a transaction like this and decide I'd effectively gifted a good part of the value of the house

The trustee can examine gifts and transactions made by the debtor up to five years before a bankruptcy order is made.

A gift or transaction at an undervalue is where the debtor gives away assets or sells them for an amount significantly less than their actual value.

If the trustee can show that the debtor was not solvent at the time of any gift or undervalued sale, and believes that the action was taken to reduce available assets for creditors, the trustee will be entitled to seek possession of the goods or money from the recipient and, if necessary, may apply to court for the transaction to be set aside. For example, if the debtor 'sells' a car to her/his spouse for £1000 when it is worth £2000, the trustee may apply to sell the car, but would retain only £1000, repaying the original purchase price of £1000 to the spouse.

The transaction by the debtor can be set aside if it was carried out in the five years before the bankruptcy order and the debtor was insolvent at the time, even if the purchase by the next person was made in good faith.

chez000

and
Failure to make a full disclosure or fraudulent disposal of property are [URL="file:///C:/Program%20Files/england/13152425.HTM#bankruptcy_offences"]bankruptcy offences[/URL] and can form the basis of a [URL="file:///C:/Program%20Files/england/13152425.HTM#bankruptcy_restrictions_orders"]bankruptcy restrictions order (BRO)[/URL].

Hope thats helpful
h

Remy_LeBeau

Interesting, upto 5 years.

Here's the idea I've got now.

I purchase the house for 1/2 it's value; £235k, leaving a £45k mortgage debt, and £120k credit card debt. He then pays 10% interest (I have no idea what interest rates he's on) for 5 years, which grows the debt to ~£265k - £100k extra debt, basically. Minimum repayments would likely be 5%, so over 5 years that'd be approximately £75k?
5 years later, he declares bankrupty, effectively ridding himself of a £165k debt for £75k - a saving of £90k. On top of this, I've effectively gained £240k, so my family live rent free in the house.
He is debt free, and is left without the property, or any money left over (instead of an estimated £60k left over if the house sold for £470k and paid everyone back immediately).
However, I have gained £240k, 400% more than the alternative.

Now, you're probably thinking, why don't I purchase the house for even less than half its value? Well, I need to find out how much of that mortgage debt could be put onto loans, etc. It may well be, that at least for the time-being, the idea of transferring £45k to loans is unrealistic. I may even have to pay a figure closer to 70% of the houses true value, so he can pay off some of the credit card debts that are on higher interest rates, if some of them are. And of course he'll no longer be a homeowner so obtaining credit will be more expensive (of course, putting that debt under someone else's name would be no good, when it came to writing it off).

nimbo

so now rather than doing this for your father you're doing it for the 400% profit???

chez000

Remy_LeBeau wrote: »

Interesting, upto 5 years.

Here's the idea I've got now.

I purchase the house for 1/2 it's value; £235k, leaving a £45k mortgage debt, and £120k credit card debt. He then pays 10% interest (I have no idea what interest rates he's on) for 5 years, which grows the debt to ~£265k - £100k extra debt, basically. Minimum repayments would likely be 5%, so over 5 years that'd be approximately £75k?
5 years later, he declares bankrupty, effectively ridding himself of a £165k debt for £75k - a saving of £90k. On top of this, I've effectively gained £240k, so my family live rent free in the house.
He is debt free, and is left without the property, or any money left over (instead of an estimated £60k left over if the house sold for £470k and paid everyone back immediately).
However, I have gained £240k, 400% more than the alternative.

Now, you're probably thinking, why don't I purchase the house for even less than half its value? Well, I need to find out how much of that mortgage debt could be put onto loans, etc. It may well be, that at least for the time-being, the idea of transferring £45k to loans is unrealistic. I may even have to pay a figure closer to 70% of the houses true value, so he can pay off some of the credit card debts that are on higher interest rates, if some of them are. And of course he'll no longer be a homeowner so obtaining credit will be more expensive (of course, putting that debt under someone else's name would be no good, when it came to writing it off).

.

How you write is confusing.

Pay 10% on what?

Making minimum payments grows debt?

Get loans for you or your father?

Is there a reason you cant buy the house outright for full value?

If you did would the house completley paid for or would there still be other secured debts.

Would your father be in a position to make minimum payments on 165k?

Remy_LeBeau

nimbo wrote: »

so now rather than doing this for your father you're doing it for the 400% profit???

Not sure how you put 400%, and the word profit together.
If my Dad sells the house and is left with £60k, he then has to find somewhere to live for the next 75 years. If I buy the house, he can live here rent free, in exchange for giving up that £60k. So he won't have a mortgage, and no debts, and my family will continue to live in the house; equivalent to owning it outright.
So what's in it for me? Well to be honest, a lot of my money is just money on paper; just investments. Maybe this is a good opportunity to diversify into bricks and mortar - it's not going to have a major impact on my finances.
I know that sounds a bit wishy washy, I need to find out more about the credit card debts, and how intact his credit rating really is; the few months of arrears could be put down to a hiccup in earnings, illness, that sort of thing.
The difficult part will come in 5 years, when he declares bankruptcy; this would take some planning...

nimbo

chez000 wrote: »

.

How you write is confusing.

Pay 10% on what?

Making minimum payments grows debt?

Get loans for you or your father?

Is there a reason you cant buy the house outright for full value?

If you did would the house completley paid for or would there still be other secured debts.

Would your father be in a position to make minimum payments on 165k?

earlier on he was posting as 2 people (i think...) a load of the posts from his (possible) alter ego have been removed, but he was going on about moving to another coutry, and his son (?him) commiting a dodgy sale and then going BR to avoid payiongthe rest of the debts off...

southernscouser

I'm unsubscribing from this thread now. :rolleyes:

tallyhoh

Would your Father be able to manage for 5 years? even with a reduced mortgage?

This sort of deal is the sort that goes t*ts up within a year. What happens if your Father could not or would not pay you & he was forced (or volunteered) into bankruptcy? or even you ditto?? You are doubling his chances of losing his home.

Jeeeezzzz, I wish I hadnt loaned a family member £500 but at least it wont bankrupt me.

Please talk to a debt charity in depth & remember that if you have thought of some scheme to save assets from the official reciever----there are already a million people had the same idea, ask yourself-- where are they now?

Toto

This all sounds like a wind up to me.