is this ILLEGAL ?

[rottytara2004]

i have credit debt of 92,000 which are now threatening me as i cant pay. i am in the process of selling my property worth 180,000 to my daughter but selling at the mortgage price i am paying now which is 90,000. she is letting me stay in the property and then i can pay her rent. is it ILLEGAL for me to go ahead with this sale before i consider contacting an IVA company to help me get my finances in order

[go_4_broke]

Hi tara

It's not illegal to sell your house for any price you like.

However if you went into bankruptcy soon afterwards it would be called a 'transaction at undervalue' which is a technical term for the process of selling off assets at an artificially low value to hide them from your creditors. The Official Receiver could apply to the Court to set aside the transaction and recover the asset and/or subject you to a bankruptcy restriction.

Taking a step back to the IVA, I imagine this would be based purely on the offer you made to your creditors from income or other assets and you would simply state you were living in 'rented property'. However if your creditors discovered who you were renting from and put two and two together a dim view might be taken.

The problem then being that if the IVA fails for that (or any other reason), you might be back to the situation described in the first paragraph.

A risky strategy definitely.

-Best.

'5 years sticking my head into the Lion's mouth of debt !'

[neverending]

Hi
I think you need to take proffesional advice on this matter.
Regards

[MelanieGiles]

Tara

You should not effect this transaction without seeking professional advice. Your are barely insolvent on an asset/liability basis, and the transaction you describe will be seen as a classic Transaction at Undervalue which will be overturned under bankruptcy proceedings.

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

[rottytara2004]

firstly i wrote that my house was worth 180.000 which in fact it is only worth 140,000 (surveyor has assessment). can i ask one more further question if i was to sell my house for say 130,000 to my daughter (her proposal to keep me in the house renting) would i still be seen as doing something wrong. i would be in a position to pay 50,000 off my debt leaving me a balance of 52,000. would i then be able to apply for an iva to reduce the debt further.
i just dont know which way to turn as i have spoken to an iva company this morning and they have inferred - they dont think i would qualify for it as my husbands income is:-£1600 - 1800 per month and I.C benefit 300 per month
OUTGOINGS:-
200 electricity
240 gas
135 council tax
36 water
400 rent (approx)
80 fire fuel
He would also require his expenditure on the car to get to work.

[rottytara2004]

Further to my last posting. If the sale did go ahead at 130,000 would anyone still be able to take the property off my daughter even though i will have paid approx half of the debt back. i just dont know which way to turn!!!! i can only see one option and i'm so close to ending it all. rather dramatic i know but i'm at my wits end

[go_4_broke]

Hi Tara

If the true value is £140,000 and you sold for £130,000 I can't see anyone being very interested especially once expenses are taken into consideration, also that fact that you would use the proceeds for the benefit of your creditors.

If you have 50% you might try offering your creditors this 'in full and final settlement' before looking at an IVA and saving the IP fees. You might have a good chance with this as it's a better offer than they would get under an average IVA. You'd want to get it all tied down legally tho as you don't want your creditors pocketing the 50% and then going after you for the rest.

-Best





'5 years sticking my head into the Lion's mouth of debt !'

[thebear29uk]

Hi

I am by no means an expert so this is only my understanding of your situation but hopefully an expert will correct me if I'm wrong.

If your house is valued at 140K and your daughter pays £130K I dont think that would cause a problem as it could be classed as a forced sale or quick sale so would be slightly less than on the open market.

If you then had approx £40,000 to offer to your creditors this may be sufficient for a "final short settlement" as you would be offering a lump sum of better than 40p in the £ and creditors would see that immediately instead of being drip-fed the monthly amounts over 60 months. Plus there is always the uncertainty in an IVA that your circumstances might change and the IVA fails part way through. I would contact one of the companies on here and give them a breakdown of your debts. They will then be able to advise if this is feasible.

You are not alone and please dont feel the only option s to end it all. All of us on here feel so very low at times but we all support one another. Your situation isn't as bad as you maybe think it is because you do have equity in your property.

I contacted Thomas Charles and they helped me with my situation.

Please keep posting and stay strong. There is a solution to your problem.

Best Wishes

Dave

[MelanieGiles]

Hi Tara

Well this is now a completely different set of facts. I feel a sale to your daughter at £130,000 would be unlikely to be challenged, so long as the valuation was valid. I would then use the money raised to effect an offer of full and final settlement with your creditors.

This could either be done directly to your creditors, which may take some time to get everyone to agree to a deal (and may never be achieved) or effected via an IVA. Given the size of your debts, and the effect the stress is having on you, an IVA might be the best solution, but do take professional advice.

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

[Skippy]

Good luck Tara. As Dave says we are all here to support each other, and it's only natural to feel down at times. However, at the end of the day it's only money - your life is worth more. Please stay positive and give Thomas Charles a call. I spoke to them when I started my IVA, and they were brilliant - really reassuring and non judgemental.

One question - how did you think of your name? Not the Tara bit, but rotty?

Good luck, and keep posting otherwise we'll be worrying about you!

Onwards and upwards!!!
View my blog at: http://skippy13.blogs.iva.co.uk/