how will it affect us if brother is br or in IVA?

[doodledaisy]

MY BROTHER HAS GOT HIMSELF IN SERIOUS DEBT. IN FEBRUARY WE BOUGHT HIS PART OF THE HOUSE THAT WE BROUGHT TOGETHER AS HE COULD NO LONGER AFFORD HIS PART OF THE MORTGAGE. WE DID NOT GIVE HIM ANY MONEY AS HE OWED AS MONEY AND HAD MISSED PAYMENTS ON THE MORTGAGE. HE IS STILL LIVING WITH US, BUT NOT PAYING ANYTHING AS HE HAS NO MONEY. ANYHOW WE HAVE BEEN TOLD THAT IF HE WAS TO DECLARE HIMSELF BANKRUPT/IVA THEY CAN STILL TAKE MONEY FROM US THE NEW HOMEOWNERS AS WE DIDN'T GIVE HIM ANY MONEY WHEN WE BOUGHT THE HOUSE OFF HIM? DOES ANYONE KNOW IF THIS IS TRUE.

[MelanieGiles]

Hi there and welcome tot he forum

How did you manage to buy a part of his property without paying any money for it? Did he owe you money and was the property transaction therefore an exchange?

If he declares himself bankrupt, the Trustee will look at that transaction and if it is deemed it was at undervalue you will be asked to pay over a sum equivalent to the equity you received.

[Viki.W]

Hey doodledaisy, welcome to the forum. Unfortunately, if your brother was to declare bankruptcy then this would be classed as sale at undervalue and will more than likely need to be reversed. Please wait for one of the experts to advise you further. X

[Viki.W]

Sorry, slow typing again.

[doodledaisy]

hi Melanie,
Thank you for replying. No payment was made to my brother as he owed us money. Therefore we in effect just had his name taken off of the mortgage, and the mortgage was put solely into my husbands name. We gave my brother nothing for it, as he owed us so much in debt. But now it turns out we could of made ourselves vulnerable if he does declare for IVA/BR.

[doodledaisy]

anyone help??
Also, when my brother got the deposit for the house he borrowed this from our parents but was to pay this back , this also remains unpaid back to them as well.

[Viki.W]

Your parents would be listed as creditors and your brother could not pay them back seperately. The house is an issue, I'm afraid. Please hang in there and I'm sure Melanie or one of the BR experts will be along shortly to help you.

[doodledaisy]

thanks Viki

[MelanieGiles]

Your parents might be able to claim that they also had an interest in the property, but this would be a legal argument which would probably require a solicitor to assist with.

[doodledaisy]

we just want to help my brother out of this debt without anyone taking any money off of us, as we cannot afford to give anyone any money. Our mortgage is costing us alot now that my brother is no longer part of it. My parents don't want the money back, they have written it off because of the mess he is in. They just want him to sort himself out. MY Dad is sick with worry, as am I.

[MelanieGiles]

But your brother owed money to his creditors - and they will look to his assets (or former assets) by which to get paid. I think that he would be well advised to have a chat directly with an insolvency practitioner to be sure he understands his options and the implications his debts migh have on all of you.

[doodledaisy]

Do we have to admit that he had a previous mortgage?
this is what he owes out from the house:
£3500 deposit less 240 he paid already = 3260 + the additional
£1,400 for the mortgage payment last year that he missed = 4660 balance
We will be charging him £100 a week now as we cannot afford our mortgage otherwise at 40 weeks this takes it up to 4000 + 4660 which is 8660.

This money is owed to us, and the reason we didn't give him any money when we signed the house over. Will this not work for us in the fact that we shouldn't have to give him any equity from the house, the fact that he owes us. He will be living with us for at least another year.

[Viki.W]

Hey doodledaisy. It will show on the land registry search that your brother has owned the property and he would have to explain where the money from the sale of that property is. Obviously, there isn't any but as Melanie has said I really think that your brother should take advice on this and all his debt problems. You could maybe pass Melanie's details over to him so that he can have a chat about everything. X

[MelanieGiles]

Your brother has preferred you over his other creditors, and in the event of his bankrutpcy a Trustee will look to overturn that transaction. If it is likely that your brother is thinking of declaring himself bankrupt, you would be wise to seek legal advice so that you can undertand the implications of this on both him, your parents and yourselves.

[doodledaisy]

we don't want him to declare bankruptcy, just IVA...or is this the same thing?
Sorry not sure on all the technical terms.