Beneficial Interest

[Lapdog]

There are a few people on here who appear to be in IVA and living with parent(s).

Among the many reasons for going with IVA rather than Bankruptcy was that it was intimated by IP that if i went bankrupt the OR might consider my mother's property as of beneficial interest to me.

My situation briefly is that i pay half the mortgage (which has another 7 years to run ) and also half of all household/utility bills as my mother is 60 and only has a part time job plus pension. I am really right on the edge with IVA payments and feel that if anything untoward were to crop up from a financial point of view i would be in trouble.

Basically if i was forced to go down the bankruptcy route, would the OR consider my mothers property as a beneficial interest and would they consider it fair to creditors that i was paying this much towards her mortgage (albeit that it is effectively rent/bills as it would e in any other property)

[MelanieGiles]

The OR may well consider that you have developed a beneficial interest in the property, given that you have been contributing to it over the last 7 years. What level of equity is there currently in the property, and would your Mum consider re-mortgageing to give you a lump sum to pay off the IVA? If this was a possibility for you, she would need to take expert professional advice of her own, as this is a delicate area.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Oliver]

Agree with Mel, 7 years worth of payments could be considered to leed to a beneficial interest although I would attempt to argue that these were rent payments and you could compare the amount you pay to market rentals in your area. Hopefully it won't come to this, and Mel offers a good solution if there is equity in the property.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[Lapdog]

Thanks for that Heaven only knows what the likes of me would have done before you guys were around

I don't know the full details but i would guess that were talking around 30k for equity. To be honest i would feel very uncomfortable about her re-mortgaging for me.

What happened basically is that 2 years ago her partner of 20+ years walked out on her and since then I've been paying half of everything. He's no longer on the scene so to speak and from a legal point of view i've no idea what rights he has over that equity given that he will have contributed nothing over the final 8/9 years of the mortgage. I'm not currently a beneficiary to anything as far as her will is concerned.

When preparing my IVA my IP did argue that these were effectively rent payments and certainly made the comparison with rents in my area.
Is the OR likely to look at it differently.

[MelanieGiles]

You are right to be concerned about your Mum, and to be honest she ought to take independent legal advice before you decide to do anything which might affect her property.

I do think that the OR will look at this differently, and the problem with taking that gamble is that once you are bankrupt you are bankrupt, and you have to then accept the consequences of the OR's decision. Get the legal advice first - and use a solicitor who is familiar with insolvency.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk