Author Topic: Can the OR make wife pay for my debts?  (Read 1168 times)


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Can the OR make wife pay for my debts?
« on: Feb 25, 2010, 09:14:30 PM »
Over the past three years I've been making token payments (£1 to £6 per mth) to a selection of debt collection agencies in respect of credit cards (12 in total). My total debt to these people is in excess of £40,000, all unsecured and all in my name only.I pay them all on standing order and it takes £26 per month out of my incapacity benefit.I am 60 and have little chance of working again.
My wife and I live in a property which is one third owned by my two adult children.
I'm considering borrowing the fee to enter bankruptcy but am concerned in case the OR can take the house and come onto my wife for my debt.
I'd just like to get one good night's sleep!

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Re: Can the OR make wife pay for my debts?
« Reply #1 on: Mar 05, 2010, 02:34:24 PM »
The facts.
1) You have 40k of unsecured debt. This debt is all in your name, none of it is in joint names. This would all be written off in bankruptcy.
2) You are 60 years old and are unemployed. Therefore your job would be unaffected in bankruptcy.
3) You are living in a property which your children own one third. Therefore you own 2/3's of the equity in the property. If your property is in negative equity, there would be no revenue gained from the sale of your house (as the mortgage company gets paid off first), and therefore you would keep the house. If your property is in positive equity then you would be liable to either pay off the Official Receiver (1/3rd or 2/3rds) of the houses positive equity, dependant on if the 2/3's remaining is in your name solely, or if the 2/3's that are left are split between you and your partner, therefore leaving 1/3 in your name.
4) Therefore, if for example you have £6000 of positive equity, You would be liable for £2000 (that you would have 12 months to repay) in order to keep your house. If it is in negative equity, you would have to pay nothing!
5) Since you are not earning anything and are on incapacity benefits, the likelyhood of you having to pay anything after bankruptcy (an IPA) are astronomically low.
Bankruptcy = Good Nights Sleep
From my heart I wish you the best of luck. Enjoy your retirement.
Raphael Gilbert
Head of Insolvency Divison www.ban