I am getting differing views on whether to sort out the Beneficial Interest in my (negative equity) property before or after bankruptcy. One lawyer says sort it before so I can protect the house as the OR is now waiting until at least Year 2 to decide whether to accept purchase from family members particularly if in negative equity (hoping for rates to rise). Also I am told that if I do sort it beforehand then the transaction can be reversed? Is that the case even with negative equity? I just don't want to be under the possibility of losing my home for three years if the OR is now not likely to sell on the beneficial interest to my daughter - who lives in the house. I also live with my husband but we were in the process of divorce and although we have got back together I don't want to put anything in his name. Therefore I would like it to be in my daughter's name. What would you advise? The house is worth £425K according to two estate agents and my mortgage is £475K.
Any transaction can be undone if it is seen to be a way of hiding assets from creditors. If you transfer the house you may not be allowed to keep on the mortgage when assessing your IPA.
Hi, As I understand it if a property is in negative equity, and you don't want to wait until the 2 year 3 month point, then the OR as trustee won't accept anything less than £1,000 plus costs to buy out the BI.
Also transferring the BI etc before bankruptcy, especially in the present climate could be seen as a transaction at an undervalue, leading to further investigation by the OR if they thought an attempt had been made to put assets beyond the reach of creditors.
Big Al Insolvency examiner with the Insolvency service from April 2008 - July 2010.
If you need help completing SOA's(statement of affairs) or PIQ's(preliminary information questionnaire) if you've been declared bankrupt, or anything else and you're within 30 miles or so of Warrington, then please contact me via my contact details in the expert page for futher details"
Sorting out Beneficial Interest before or after bankruptcy ?
Posted - 20 July 2011 : 15:00:06
