Author Topic: My x wife and children may loose their home as I am bankrupt  (Read 1796 times)

simon23

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Hi,
 
I am looking for some advice to try and help out my X wife and children who are now at risk of losing their home. This is absolutely destroying me and any advice would be greatly received. Basically cut a very long story down to size this situation is as follows.
I moved out of the marital home around three years ago and what followed was the obvious divorce. Both my X wife and I are more than amicable now, however, at the time of the split, there were many arguments over access to my two daughters. This has now been resolved however it plays a key part in all this as it prevented me from signing a clean break order quickly and as part of the divorce settlement.
 Prior to the split I also owned a small limited company which had a large business loan from the bank secured on It, that over the ten years, was more than halved through normally monthly payments.  Just prior to the divorce being finalised (Whilst still sending the clean break order break order backwards and forward) this company lost a major contract and it went into voluntary liquidation. The business loan I personally guaranteed.
Now over the time period that followed many more debts were loaded on to my shoulders and finally I had no choice in March 2012 to file for bankruptcy. Since the closure of the company I simply couldn’t find employment that paid enough to even keep up the minimum payments everyone wanted.
Now  prior to filing for bankruptcy (Around a month before) my full divorce papers were through and I was officially divorced however I now I knew I was insolvent therefore even though I had agreed in principle the settlement details I could legally sign the order therefore it sat stagnant.
This clean break order was needed as it ring fenced myself from any spousal maintenance and ensured that she retained the home and its entire contents. I requested none of the equity which sat in the house as during the setup of the company 10 years previous her family kindly lent us an amount of money to help and that my beneficial interest in the house was hers to repay her family and keep what was left for herself. But as I mentioned, it wasn’t court stamped at the time of the court signing off the divorce.
Now I have a problem whereby 3 months before my discharge there is a totally equity in the property of around 70k, half of which the trustee wants. Obviously she has maintained the house since I left (New roof at 7k and new boiler at 2k), has made capital repayments to the mortgage herself. Other than paying her maintenance to her for the children I haven’t contributed to that house at all.
She isn’t able to raise a massive amount of cash and she doesn’t want to have to move the children to different schools. I am not able to give her the cash to buy out (I would if I could be no question). What can she/we do to either delay the trustee or prevent her having this trouble through no fault of her own. She is not able to re-mortgage the property as it was originally in joint names and still is and she cannot secure a mortgage on her own for the remaining amount.
 
Please help.

What goes around

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Re: My x wife and children may loose their home as I am bankrupt
« Reply #1 on: Jan 10, 2014, 10:36:05 AM »
Hi Simon 23. I feel for you, from a business point of view, I'm going through the same thing. Business collapse, funding secured by PG's and bankruptcy booked for next month.


Your situation is complicated so would suggest your ex wife gets some solid advice from a specialist solicitor. There is a thing in Bankruptcy call "equity of exoneration" which deals with the equity in the house in cases of joint ownership.


My personal view is that there are are two possible things you could do. Your wife has made capital improvements and has been paying the mortgage so will be able to make a representation to the trustee for a greater share. In addition, even though the conclusion of your divorce was later in the process, she may have a strong claim for a greater share of the equity based on the initial agreements. Either way, she will have to make the representations to the trustee herself and this is where a solicitor may be able to give strength to her case.


There are good guidance notes in the insolvency technical manual under chapter 31.


Good luck! I do hope things work out.