Hi sps
The ruling regarding low equity in properties is now covered by formal insolvency legislation, which states that if the equity in the property is not sufficient to ensure any return to creditors (after the legal costs of possession proceedings have been taken into account) then a judge is unlikely to grant an order for possession. Generally a figure of £5,000 is used as a benchmark.
In bankruptcy, the Trustee must deal with his/her interest in your property within three years from the date of the Bankruptcy Order. A clever Trustee, may therefore wait until the final year to see whether the value of the property will increase and therefore make it worth the creditors' while then applying. To avoid this, as Oliver says, it makes absolute sense for a friend or family member (your spouse is perfect) to offer to acquire the Trustee's interest for a nominal sum. Given that you will generally be dealing with the Official Receiver, this is usually done as a matter of formality,
Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at:
http://melaniegiles.blogs.iva.co.uk
