Author Topic: Share of the house  (Read 2203 times)

pmk

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Share of the house
« on: Feb 10, 2011, 09:16:43 PM »
Hello all,
Sorry to meet you all under such circumstances.
Firstly; I would like to point out, I do not live in Lambeth.
A quick Brief;
My wife and myself have business debts of around 70K which we cannot afford to pay off.
My wife has a quarter share in a house, which was inherited from her father ( about 60K in total ). none ofher siblings wish to buy her share of the house, and insist she does not declare her ownership in the property.
We both understand the prospect of going bankrupt is very daunting, and would rather not do so. Nor do we wish to force a sale of the quarter share of the house, as this would create more court costs and promote bad feeling through the family.
My questions are:
If we do not declare the quarter sharein the house, would we be breaking the law ( if we are in breach ofan statute would it be possible for only her to go to prison ( she doesn’t go out much anyway )).
OR
If we declare bankruptcy would the receiver force the sale off the quarter share of the house, and would he allow her family to purchase it, if they chose to do so.
Thank you.

shocksoc335

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Re: Share of the house
« Reply #1 on: Feb 11, 2011, 06:47:34 AM »
The rules on buying out a share in the house have changed - a family member will not be given the opportunity to buy out the share of the property for at least 2 years and 3 months unless the OR decides there is a large amount of negative equity in the property and no way to get a dividend in 2.3yrs. The OR can vest an interest in the property for three years and decide to place a charge (security) on the equity. Yes you will be breaking the law if you don't disclose the quarter share in the property besides the OR will investigate everything you have done going back 5 years. If the quarter share asset is on showing on land registry they will know.

Be careful although your wife doesn't go out much now she will go out even less if she goes to prison!
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pmk

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Re: Share of the house
« Reply #2 on: Feb 11, 2011, 01:32:17 PM »
We would like to pay off our debts and restart our lives.
If we decide to go bankrupt and do declare her interest in the house, will the OR sell the house andtake the quarter share wifey owns and put that towards the debt. The house is fully paid, and is in positive equity. The house is not used, and lays empty. If the OR was to accept the quarter share of the house as part payment ( 60K ), and force the other siblings to buy her out or just sell it on the open market. This would leave us with a debt of 10K which we could pay from our savings, we would walk away with all debts paid and some chance of restoring our credit.

shocksoc335

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Re: Share of the house
« Reply #3 on: Feb 11, 2011, 06:09:08 PM »
Just out of interest where do you live now in rented or mortgaged, and is this an additional house, not the one you live in?
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James Falla

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Re: Share of the house
« Reply #4 on: Feb 23, 2011, 01:24:14 PM »
Hi pmk
 
The first thing to say is that if your wife declares bankruptcy she must declare her part ownership in the property. If she does not then this could be seen as a fraudulent act which may have criminal consequences. 
 
As Shocksoc has mentioned, the rules on dealing with property in bankruptcy have changed. However, I believe that a family member or indeed any other third party has the opportunity to buy out the bankrupt's beneficial interest in a property immediately given that the offer is equal to the level of equity involved. However, if such a sum can not be raised, than I agree that the OR will probably not be open to offers and will retain the interest for a further two years and three months.
 
If the equity after 2 years and 3 months cannot be bought out by a third party then it is almost certain that the property would be force sold to release the equity given that the equity is a sizable sum.   
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pmk

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Re: Share of the house
« Reply #5 on: Feb 24, 2011, 12:08:31 PM »
Sorry just got back,
We live in a rented house, private landlord.
The house in question is an empty house, wife would like to sell it but her sister wants to keep it. Its fully paid.

James Falla

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Re: Share of the house
« Reply #6 on: Feb 25, 2011, 04:37:10 PM »
Hi pmk
 
Unfortunately if your wife declares bankruptcy, then her title in the empty house will transfer to the Trustee in bankruptcy. They can and will force the sale to release the equity especially as the property is empty and no one is going to lose the roof over their head.
 
As such, you wife should only really consider bankrutpcy if either her sister is prepared to buy her out or agrees to sell....
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