Issues and questions that come up during your bankruptcy period

Moderators: TalbotWoods, JaneClack

By merlotqueen
#469113 Hi, I’m new to this forum & have been reading some good advice and was hoping someone may be able to help us.
My partners business was recently liquated, we both worked there & due to personal guarantees he has applied for bankruptcy (last option as he has no income to bargain with the banks) He has suffered a breakdown due to this & is currently on ESA. I’m actively looking for employment but on joint claim currently.
Our worry is the family home, we have a five year old & two older children on split parenting. Due to the boom in house prices there appears that there could be around 5 k of equity in the home, mortgage & house is his name only. I have tried to find out what evidence the OR will except for the value of the house as estate agents are pricing high due to the fact that it’s a first time buyers dream. We really do not want to lose our home, we could not afford to rent in same area, local council housing is scarce & would have to move out of area moving daughter’s school & not being able to have older children (ages 15 & 13) due to location.
Does anyone know what evidence the OR takes surely they must take into account estate agents fees (1.5-2.5%) & the pricing? We wondered how flexible the OR would be, would they except a smaller amount (beg & borrow off family) for the equity due to circumstances? Due to the housing boom if it was left for the 2.3 years I think there is no way we could find the money for the estimated equity at that point.
I’m struggling to believe that the estate agents valuation is taken at face value as the one we have had around recently told us the value he would market it at but then to expect lower for a quick sale (we did explain we would want a quick sale but to no avail)? So sorry for the long post but as we everyone to lose the home will be the final blow. :(
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By JaneClack
#469133 They have 3 years to deal with the property - although in the first year the bankrupt's family have priority over the creditors so no-one is going to be kicked out.

How will the mortgage be being paid during the bankruptcy if he is on ESA? Have you ever contributed to the household etc are all things that will be taken into account.

However, the bottom line is that he owns the property and at first they will look at it being his asset as well as his home. Get several estate agents evaluations for a quick sale and present those to the OR. He will then want it valued again in month 27 anyway as even properties which are in negative equity can change over the period and then there is a chance you could buy the beneficial interest from the Official Receiver.

The children and their schooling do not give any more rights than anything else unless they are very disabled. The OR or Trustee would only ever force a sale if there was no co-operation from the bankrupt.

£5,000 is not a lot but it could be more than this in 27 months.
By merlotqueen
#469143 Hi Sarah,

Thanks for the reply mortgage is being paid for at moment by family members as it is low due to being interest only, which won't last forever but I have 2 x 2nd interviews next week so hoping something will come up with this. My wages were always kept low from the family company so did not contribute to bills etc..So basically on paper I have so rights within the home as pretty sure general redecorating / modernising will not count.
If there is equity of more than 1K does the OR let family buy out the beneficial interest within a year?
I understand about estate agents, still cannot believe the OR does not take into account the estate agents percentage & will carry on getting estimates but do you think a surveyors report (basic) would be better? If this lasts for 3 years I'm not sure how my OH will be as already had breakdown & on medication due to all of the stress.

Thanks Again
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By JaneClack
#469173 No, I am afraid that today he does not. The property is revalued 2 years and 3 months after the bankruptcy if there is no equity at the beginning and if still no equity the beneficial interest is returned to the discharged bankrupt at no cost.

Yes they do take estate agent's fees etc into account and will usually allow someone to buy the share at a reasonable cost discounting those kinds of things. If valuation was same equity as now ie £5,000 you could probably buy it for about £2,500 to £3,000.