Talk

Flip

Mumsnet has not checked the qualifications of anyone posting here. If you have any legal concerns we suggest you consult a solicitor.

Legal matters

concerned - sister divorcing to avoid house repossession as husband goes banrupt

11 replies

mulranno · 05/04/2011 14:28

I have heard from one of my sisters that another sister is getting technically divorced to avoid her home being repossessed as her husband is going bankrupt. She has not and will not tell me about it but I am concerned that she could be implicated in some sort of fraud allegation -- is it as easy as all that to run away from dept?

OP posts:

Report

EldonAve · 05/04/2011 14:30

nope not that easy and they may well try and get the house anyway

Report

mumblechum1 · 05/04/2011 15:36

Any disposition of the house for less than its actual value is very likely to be set aside by the court on the application of the trustee in bankruptcy.

Report

mumblechum1 · 05/04/2011 15:37

I'm assuming that the idea is that the husband transfers the house to the wife within divorce proceedings for nothing? It isn't going to work.

Report

mypandasgotcrabs · 05/04/2011 15:40

It doesn't matter whether they're divorced or not. If he 'gifts' the house to her she will need to pay insurance incase of him becoming bankrupt within 3 years. That isn't cheap.

Report

mulranno · 05/04/2011 16:50

yes i think that is what they are doing - gifting/transfering -I am getting worried now....where can i direct them for help? --i dont want them to dig an even bigger hole than they are already in

OP posts:

Report

mulranno · 05/04/2011 17:02

yes i think that is what they are doing - gifting/transfering -I am getting worried now....where can i direct them for help? --i dont want them to dig an even bigger hole than they are already in - she is also in early pregnancy with IVF twins which has cost them in the region of 40k to date and the cause of the money probs

OP posts:

Report

mulranno · 05/04/2011 17:02

OP posts:

Report

mumblechum1 · 05/04/2011 17:14

I'm afraid that if he goes bankrupt and assuming that he has a half share in the house, and also that there's a reasonable amount of equity, the house is likely to be sold and his half of the equity will go towards his debts.

If they try to be clever and transfer the house to her for no consideration, the Trustee in bankruptcy will seek an order that it was transferred in a deliberate attempt to frustrate the perfectly valid claims of the people he owes money to, and will transfer the house back into joint names, so that it is sold. The costs of going to court and of the conveyancing will be added to his debts.

the only way that isn't going to happen is if he can pay his debts from other sources, which sounds unlikely from what you're saying.

Report

Spatz · 05/04/2011 17:24

I recently asked a solicitor about this and although they can make a charge against the house in the case of bankruptcy if children are living there you get a minimum of two years to sort something out before you have to sell.

Report

Collaborate · 05/04/2011 21:10

You get no more than 12 months. Won't work. Was reinforced on a course I went on today.