Topic: Bankruptcy - reducing beneficial interest of home

[MrsMEC]

Hi


With a bankruptcy hearing imminent, I’d like to put the following case study for advice please:


A sole trader is to be made bankrupt and jointly owns a home on a 75/25% Tenants in Common share with their partner, their 25% share being the beneficial interest relevant to the bankruptcy which is at risk.


Their partner runs a limited company from the home (an office and outside store), with no rent etc charged.


If the bankruptcy is filed, is there anything that can be done by the partner using their limited company to reduce the 25% beneficial interest at risk?


Many thanks in advance.

[Lisa Thomas]

Hi I believe I have answered this on another forum but the non- bankrupt owner will need to reach an agreement with the Trustee to buy out the bankrupt's interest in the property.


If there is sufficient equity and they, or third parties are unable to do this then the property is at risk of being repossessed and sold by the Trustee.


The non-bankrupt owner will receive their share of the net proceeds.

[viditagarwal]

If you have a debt problem, one of your options for sorting it out might be bankruptcy. You can apply for bankruptcy if you can't pay back your debts. As well as applying for bankruptcy yourself, someone else you owe money to (a creditor) can apply to make you bankrupt, even if you don't want them to.


Source: DNS Accountants