Bankrupt exH. Might lose my house?

[2014]

I wasn't sure whether to post this in money or legal.

Consent order of my divorce in 2010 gave ex 50% of equity with following terms a lump sum of £(deleted) or 50% of the value of the property at the time at which the lump sum becomes payable whichever is the lesser amount in consideration of his interest in the former matrimonial home

(The above acknowledge the then dropping housing market)

Ex went bankrupt 13 months later and insolvency service placed charge on my house for the above 'interest'.

I received a little Christmas good wishes from the Insolvency Service today saying: (edited highlights) Long Term Asset and Distribution team dealing with it...his interest in property has passed to them...monies are due to them on sale of property once stipulations of consent order are met...I can purchase this interest but they need to see 3 estate agent valuations or a RICS Chartered Surveyor Report as well as outstanding amounts to mortgages or charge holders to determine how much is due to ex...I have to pay the solicitor fees in respect of this which are £484...if I don't wish to proceed or am unable to I need to confirm outstanding balance on mortgage so they can decide if they will extend their allotted time to recoup their costs or return it back to exH

I know they can force me to sell the property to release their money should I not be in a position to pay them myself.

I need to establish my financial position to do the above (slim!!) and if I can get a mortgage and get house valued in order to establish what interest they might want. My questions:

1. I've paid off £22K from the mortgage since divorce - surely they cannot make a claim on this?

2. I've improved the house since divorce (most significant being new kitchen) - can this be taken into account when calculating property worth? i.e it has increased value but at cost to me

3. Who's valuation am I best to get (i.e. lowest) estate agent or RICS?

4. Depending on what sort of mortgage I can arrange (big if ) I might be able to buy them off after negotiation to reduce the sum. Has anyone experience or advice re this.

5. It's very likely I cannot raise enough. In which case they can force a sale or decide it's not worth it. I'm weighing up asking family for loans (very reluctant) just to have security but maybe I'd be better off ignoring?

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Additional info ignore if bored already :)

I have 3 DC and 4 bed house. All same sex and two are students only home for 12 weeks per year.

House next door has been on the market for several months and dropped their price £12K but still no interest in it AFAIK.

Sorry this is long

You need legal advice as soon as you can.

Hopefully, someone legally trained will be along to advise shortly.

Personally, I would want a Solicitor to reply to that letter on my behalf.

Ok next question...I had a lovely solicitor who I trusted when sorting out divorce issue. I'd like to use her or should I aim to go with a specialist

The amount is really small compared to e.g. some people's solicitor fees on getting divorced. I'm reluctant to incur huge costs because I cannot afford it and it would cost more than it might save potentially. I recognise I need to do this but really don't have huge sums of free cash.

I've stayed in the house because I can't sell without them taking the equity...can't get new mortgage either until charge has been removed.

ExH pays me £20 child maintenance every month. I'm already bearing the burden of bringing up the DC virtually alone - his financial mismanagement being dropped on me is just not fair

I would make an appointment with the solicitor you already know initially (or try to speak to her over the phone on Monday). She may well specialise in divorce proceedings though, and may not feel qualified to help with the current problem. However, she probably will be able to recommend you to another solicitor (quite possibly in the same firm).

How long ago was the bankruptcy? Was it ever stipulated at what point the IS would look to recover the debt?

The bit of the consent order you've quoted says that exH gets his 50% or lump sum "at the time at which the lump sun becomes payable". Does the order state what triggers payment to exH ie when does the lump sum become payable?

Bankruptcy was May 2011. They never stipulate when they would recover the debt. I was advised by a friend that they give 12 months grace however the current housing market meant they were not likely to chase because the costs vs a court case to force a sale would mean it wasn't worth it

The trigger is DD reaching 16. She is 11 but Insolvency Service can set that aside. i.e. take precedent in their claim

Presumably because the trigger is no longer 50% of what it is worth when dd reaches 16 it must be the lump sum stipulated instead?

Could you write to them yourself and state your understanding is that they want the lump sum of £x based on what it was valued in 2010 and would they be prepared to accept £y as that is the money you can raise?

Make £y a relatively close amount?

I'm going to investigate estate agent valuations and then do exactly that I think Random (depending on the big if of whether I can actually raise any money)

They may not chase this as was previously insinuated to me (costs too high vs amount) so I'll have to weigh it all up

Thing is, as he only went bankrupt 13 months after the consent order was given it suggests he was insolvent at the time therefore as far as the insolvency service are concerned it may not be relevant. You are best off seeking advice from someone specialising in insolvency tbh. They will want as close a figure to half the equity costs as possible but no harm in starting off lower, they can only say no. How much equity are we talking about?