Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

ByButts
#306683 My ex-wife is about to buy out my interest in the ex-matrimonial home for consideration of paying off the Charging Order (my name only) that is attatched to it. This is with my total agreement.

We divorced two years ago and at that time she was unable to get a Mortgage in her own right thus we continued the joint mortgage which she paid. Would I be able to argue (for bankruptcy purposes) that this is not an undervalue transaction but just a delayed Divorce Settlement.

If this is not the case as a resident of Scotland will I have to wait five years before there is no risk of the OR attempting to "undo" the above transaction. The property is in England.

The bottom line is I'd rather she had the money than creditors. I will not gain in any way from this transaction.
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ByTalbotWoods
#306693 Oh go on ask an easy one wont you!

We will need to seek advice on this ourselves, as it is also a cross between two civil jurisdictions.

So need to confirm a couple of things first:

Are you in Scotland and your ex wife in England?

Are your debts under English law?

Is your ex wife still living in the property and before the divorce how long had you both lived there?

Was the divorce settlement regarding the property agreed by the courts (formal), or is it just a understanding (informal)?

What are tomorrow nights winning lottery number?

Tim
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ByJaneClack
#306713 want those numbers too, Butts!

I know how they would work it out in England but need to check on Scotland and when we have found out if you can private message either of us with mortgage outstanding, charges etc and post code of property we can zoopla it and work figures out if necessary...

the charge has separated ownership in England as you know (tenants in common as opposed to joint tenants) ie you both own half each of the equity and the charge would come off your share...
ByButts
#306733 Answers to TW....

I am in Scotland and ex wife in England

Debts were aquired and administered under English Law

We had both lived there from 1999 until 2008 at which point we seperated. She paid mortgage from time I left onwards.

There was no fromal Divorce settlement - it was a £95 special from Scotland (not contested and children over 16) in 2010. I agreed to hand over he property to her for putting up with me for 20 years !!

Winning Lottery numbers ..1,2,3,10,11,21 - thats her numbers so will make the whole question academic :mrgreen:

Answers to Sara....

Mortgage Outstanding was £79,000

Santander valued property at £142,000

Charging Order £11,600

Further information all debts in my name about £130k on top of CO ..only 1 other CCJ £5000 rest unsecured or courted in any way.
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ByJaneClack
#306753 Well - here is the reply from an insolvency practitioner who works across England and Scotland jurisdiction:

Whether he goes bankrupt in Scotland or England, The OR/AIB would still look at this as a transaction at an undervalue or Gratuitous Alientation in Scotland.



If property is worth 142k

Mortgage 79k



Joint equity = 63k

Less wife’s share = 31.5k



His equity = 31.5k

Less Restons = 11k

Less Nationwide 6.5k (if this is not a charging order too then this would be discounted from equity amount)



This leaves him with 14k equity. (or £21.5K equity if Nationwide do not have a charge).



He could possibly argue that his wife has more interest than half, if she’s paid mortgage for last 4 years, and consequently, the OR is not entitled to the property, but the OR/AIB will certainly investigate it, and check that is the case.



It’s a risk he needs to be aware of, but the property may not be sold in bankruptcy. If his wife can buy him out and he pay this into the bankruptcy ie pay for Charging Order), then this will appease the OR/AIB and they will probably be less likely to look into this in as much detail..
ByButts
#306763
Sarah wrote:Well - here is the reply from an insolvency practitioner who works across England and Scotland jurisdiction:

Whether he goes bankrupt in Scotland or England, The OR/AIB would still look at this as a transaction at an undervalue or Gratuitous Alientation in Scotland.



If property is worth 142k

Mortgage 79k



Joint equity = 63k

Less wife’s share = 31.5k



His equity = 31.5k

Less Restons = 11k

Less Nationwide 6.5k (if this is not a charging order too then this would be discounted from equity amount)



This leaves him with 14k equity. (or £21.5K equity if Nationwide do not have a charge).



He could possibly argue that his wife has more interest than half, if she’s paid mortgage for last 4 years, and consequently, the OR is not entitled to the property, but the OR/AIB will certainly investigate it, and check that is the case.



It’s a risk he needs to be aware of, but the property may not be sold in bankruptcy. If his wife can buy him out and he pay this into the bankruptcy ie pay for Charging Order), then this will appease the OR/AIB and they will probably be less likely to look into this in as much detail..


Thanks for that Sara - Nationwide do not have a CO.

To avoid any "OR Snooping" how long do I have to wait - 5 or 6 years ?
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ByJaneClack
#306773 Am not sure whether it would be questioned anyway for longer as it is to an ex-partner. Will check - took my exams too long ago and this has not come up recently ... need to find paper work but you've got at least 5 years so no urgency to find it!
ByButts
#306783
Sarah wrote:Am not sure whether it would be questioned anyway for longer as it is to an ex-partner. Will check - took my exams too long ago and this has not come up recently ... need to find paper work but you've got at least 5 years so no urgency to find it!

Thanks for all your trouble taken :mrgreen:
ByButts
#308143
Sarah wrote:Am not sure whether it would be questioned anyway for longer as it is to an ex-partner. Will check - took my exams too long ago and this has not come up recently ... need to find paper work but you've got at least 5 years so no urgency to find it!


Any joy yet Sarah ?
ByButts
#308183
Sarah wrote:No, because I have been too busy to follow through!



Ok, thanks.
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ByTalbotWoods
#308223 To save Sarah having to trawl through all her old paperwork, it is 5 Years.

This just happens to co-inside with the length of time records are held in the front end of the database on the land registry.

HOWEVER, if during the ORs enquires someone (such as a vindictive creditor - or rather a vindictive neighbourly busybody) complains to the OR that you are hiding assets, they will go back 10 years.

But that doesn't happen so much now as the bankruptcies aren't advertised in the local rags

Tim
ByButts
#308243 Thanks TW....who knows I may win the Lottery in the intervening period and make the whole discussion academic :mrgreen:
Bynomlas
#308253 I hope you share it with chandjay, he could do with another holiday.
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