The sale of my family home as a result of bankruptcy

WobTimus_Prime · 6 May 2018 at 3:28PM

Good afternoon all,

I’m desperately seeking advice with regards to the sale of my family home which is jointly owned with my wife and is mortgaged.

I made myself bankrupt in December 2015 with debts totalling £50000. Up until April this year I have been dealing solely with the OR making regular IPA payments. I received a letter in April from a company called Mazars (the new trustee) informing me that they intend to sell our home to realise my interest.

I believe there is going to be £70000 equity if not more so I know they are definitely going to try and sell it as we have no way of raising us 50% of that amount to buy my interest. We are waiting on a valuation through Mazars which is taking place on Wednesday.

We don’t want to move as it’s our home but this is made worse by the fact my wife is 6 months pregnant.

What I want to know firstly is can anyone explain in simple terms the process of the trustee trying to sell our house and likely timescales?

Secondly do we have any other options that I might not be aware of? My brain is well and truly frazzled from reading various information online.

Lastly I was doing some reading of the guidance notes designed to help OR deal with someone’s interest in a property. Please see below:

31.3.158 Basic process for realising the bankrupt’s interest in a property

The basic process for the realisation of the bankrupt’s interest in a property is that (subject to a minimum property value – see paragraph 31.3.159) a letter [note 5] is sent to the bankrupt and/or any joint owner to establish if any party wants to make an offer for the bankrupt’s interest (guidance on this process, and the subsequent sale, is in paragraphs 31.3.159 to 31.3.173).

We never received a letter from OR asking if we wanted to make an offer for the property. We have only just received that from Mazars. Does this constitute any breach in the process from a legal point of view. I know I’m probably clutching at straws here but I’m trying to do everything I can to enable us to stay in our family home, at least until we had the baby.

I would be enormously grateful if anyone could give me some advise so that I know where I stand after the trustee has completed their valuation.

Many Thanks!

maxmycardagain · 6 May 2018 at 5:15PM

wait for their valuation, disagree with it, get 3 of your own, spin it out.

your wife is entitled to half the equity raised when it is sold (assuming she didnt go bankrupt and the debts were solely in your name...

maxmycardagain · 6 May 2018 at 5:17PM

I have a befuddled memory of non-BR joint mortgagee's being offered the equity buy out for a very small % of the actual equity assuming it could be raised...

TheGardener · 6 May 2018 at 5:18PM

Mortgages are not really my area but - 50% of the equity belongs to your wife so that reduces the ORs potential return to £35K and the OR will also need to factor in the costs of selling the property and the Trustees fees and their own fees so they usually accept an offer much lower than 50%. Is there anyway you can raise anything to offer the OR?

WobTimus_Prime · 6 May 2018 at 6:55PM

I think the max we could offer would be about 7500 the only other thing we could do is remortgage but that!!!8217;s going to be hard with the BR on my record. Our lenders already said no.

theoretica · 6 May 2018 at 7:48PM

I imagine they need the valuation first, before they can consider what offer they might accept, so they have not necessarily missed that step.

WobTimus_Prime · 6 May 2018 at 8:02PM

I was just wondering if the OR should have given us the option before it was passed to Mazars but that!!!8217;s a minor point anyway.

I really wanted to get a grip of the process and our options.

silvercar · 6 May 2018 at 10:51PM

Could your wife or any other family member (or friend) make an offer to buy your beneficial interest? That is something you should be investigating now.

I don't know the exact figures, but with an equity amount of £30k, the OR is going to want something. If you could chip the valuation down a bit, then there may be the possibility of the OR registering a charge on the property rather than insist on the property being sold.

You want the valuation as low as possible, so don;t make the house too tidy, or the rooms too well lit, no need for the smell of coffee/ fresh bread.

WobTimus_Prime · 7 May 2018 at 8:24AM

As I!!!8217;ve mentioned unfortunately we wouldn!!!8217;t be able to raise much and no family members to contribute.

Can anyone explain the process if my wife contests the sale which I believe is her right. Obviously we!!!8217;d rather come to some sort of arrangement and buy back the interest but not sure that!!!8217;s gonna be an option.

TheGardener · 7 May 2018 at 11:24AM

As silvercar says - pushing for a charge on the property might be an option and they may accept that along with anything you can raise to add to the pot. If you have to move you can ask for the IPA to be adjusted down too - all of which reduce the amount the OR /Trustee will get overall by pushing for a sale.

maxmycardagain · 7 May 2018 at 7:12PM

WobTimus_Prime wrote: »

I think the max we could offer would be about 7500 the only other thing we could do is remortgage but that!!!8217;s going to be hard with the BR on my record. Our lenders already said no.

1st - dont offer the maximum... start at £2500

Every offer/counter offer is another month anyway

2nd - your wife might be able to get a loan against her equity?

(as a last resort)

When we had our home repo'd 30 years ago Birm Midshires came after me for £30,000

after a year they took £3000

The sale of my family home as a result of bankruptcy

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