Bankruptcy and Inheritances Beneficial Interest

lisa-r_4

Hi guys,

Can anyone tell me if I were to go bankrupt, if there would be any way of safeguarding the house I rent from them were they to die before I was discharged? To be honest, the only thing keeping me from taking the plunge is my fear of losing the home, which fills me with fear.

lisa-r_4

*sorry, I meant I rent the house from my parents

skylight

What do you exactly mean??

You rent a house and live in it? From whom? If you were set to inherit the house upon the death of the owner, AND that happened within the 12months of your bankruptcy, then the OR would have an interest in the property and there is no way of getting out of it at that point.

The ONLY time to act is right now, and that would be for the owner of the property to re-write his/her will. My father has done this - leaving everything to my children but in trust so I would take care of it (under Spanish law so a little different to here).

It is something that needs to be addressed, but are the owner(s) ill, are you expecting them to die within the next 12 months? I know that we can never see round the next corner, but you also need to be realistic - its not impossible, just unlikely.

skylight

Having read your amendment, both your parents own the home? If one were to die does it not currently automatically fall to the surviving spouse? If so, they are not both likely to die within the year thus leaving the property to you. (again, not impossible, just improbable).

lisa-r_4

Sorry no, only my Father. I also have a sister and I know he could leave the whole house to her, but that would worry me as we don't have a fantastic relationship.

skylight

Sorry - but there is no easy way out of it. Your Dad would need to chat to a solicitor, perhaps placing your share in trust until after your discharge may help but there may still be implications to that.

Is your Dad leaving the property 50/50 with you and your sister? If you don't get on and all is AOK with BR, she still could force a sale owning 50% meaning you still get forced out.

No easy answers I'm afraid.

lisa-r_4

This is heartbreaking. I share my Fathers' house with my partner - could the house be split between him and my sister perhaps? I was worried about 'beneficial interest' etc if this happened?

Scarlett.1974

Hi lisa

I don't mean to sound crass, but is your father er...... ill at the moment? Is there a high chance of him passing away in the next 12 months?

As skylight has said - there is no easy way around this. I too would advise your dad speak to a solicitor about this. Has he left a will?

lisa-r_4

Hi Scarlett

No, he's absolutely fine. He does have high blood pressure though, but doesn't smoke and is only in his 50's. It just seems like such a risk to take. He doesn't have a will at the moment, only a hand-written one.

skylight

Mmmm. Are you married to your partner (or civil)? The problem with leaving it to your partner, is god forbid you split and they walk away with it all.

The big question I suppose is , are you expecting your father to pass away within the 12 months? If your BR is simple (no fraud/gambling and full co-operation) then early discharge is possible from 8-10 months, but shouldn't be taken as expected.

The problem is, BR is not a get out for free thing, and the rules are made a particular way so that assets can be realised to help cover the debts.

Another way to look at it, is the OR would only take your debts and fees value - so of the property is worth £200k, thats £100k each. If you owe £20k then the OR would deduct £20k plus whatever the fees are and return the balance of your £100k to you if the property was sold. Or the BI could be purchased by your sister or partner but if the mortgage is fully paid up then the OR is likely to want all the debts covered rather than negotiate.

Its not ideal as its your home, but its only bricks at the end of the day. and I do think that you are worrying yourself too much with the worse case scenario here.

RAS

Lisa

Do you expect him to die in the next year or so, prior to discharge? If not, then the issue round the house is not really an issue?