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James.mc
Starting Member
1 Posts |
 Posted - 21 October 2010 : 23:32:15
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Hi,
My mother recently went bankrupt and I have made an offer to buy the beneficial intrest in her house and also a second property in which my grandmother lives. The offer has been accepted but I have been told that if I go ahead with the deal I will be responsible for repaying a outstanding maintenance fees (over £2000), a debt that had originally gone into the bankruptcy order. In addition to this, over the past few months the official reciever has been taking the housing benefit that my grandmother recieves that normally pays the interest only mortgage on the property that she lives in. This means that my mother will also be responsible for the missed payments. This seems quite wrong as the bankruptcy is suppossed to clear her of any debts. Is this fair? |
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Bigal4787
forum expert
United Kingdom
641 Posts |
Posted - 22 October 2010 : 00:05:49
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Hi James,
1.Regarding your mother's properties, I take it the one she lives in, is what would be described as the family home, on which you can purchase the beneficial interest in the low cost conveyancing scheme, which it appears you are. However, to who are the outstanding maintenance fees owed, and by who? if they are unsecured and were declared in the bankruptcy, then they are no longer enforceable(unless there is some clause relating to the fees). By buying out the beneficial interest, all you are doing is realising any equity for the benefit of the bankruptcy estate.
2. I am assuming that the property your grandmother lives in,is also owned by your mother, which in bankruptcy is not classed as the family home,and is usually classed as an investment property. If solely owned, the beneficial interest cannot be purchased, and from what you have said, it appears that the OR has appointed their agents to manage and collect the rent(in this case the housing benefit) on the property, which they can do for as long as a tenant is in the property, or the lender appoints their own LPA receiver, or the lender begins repossession proceedings.
It sounds unfair, but in bankruptcy, you are only allowed to have the family home, if you have more than one property, then they will be dealt with as appropriate,as the OR does not want to be dealing with more than one property. The rent (housing benefit) being collected goes into the bankruptcy estate, along with any surplus(if any) following the sale of the property.
If there is any shortfall from the repossession and sale of the second property, then it will generally be claimed in your mother's bankruptcy.
I hope this answers your questions, the information given is to the best of my knowledge still the case.
Big Al |
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Beneficial interest
