Can one of the experts please advise?
If IVA failed then can the spouse with bulk of the debt go bankrupt?
Would residential property be able to be purchased for nominal fee if in negative equity?by the non bankrupt spouse.
What would happen to other properties owned but in negative equity?could the same be done?
What about the position of bankrupt spouse in a business would they just be removed from the partnership and could the business continue as a sole proprietor by the non bankrupt partner.
Could the non bankrupt partner go for a dmp for their personal debts and what would happen to any joint debts would they go into the dmp?
Yes it would be possible for one of you to go bankrupt, and if the property is in negative equity then the other party could buy out the beneficial interest for a nominal sum ie £1 plus the costs of transfer. The same could also be done for non-residential properties.
If you are trading in partnership, the effect of bankruptcy will be to dissolve the partnership, but the non-bankrupt partner could carry on trading providng the paid a fair price for the value of the bankrupt partner's share.
The non-bankrupt spouse could propose a DMP to creditors, which would include the full extent of any joint debts.
Thank you so much for coming back so quick. I am in rather a panic because our IVA only had one vote today and that was Against by Amex although there were 14 other creditors, I cant believe it! We were offering 59p dividend.(Debts 120K)
What do we do now,my husband has 70% of the debt in his name.Do you think my creditors would make me bankrupt? they are all credit card companies and the bank where the joint debt is...I am very scared !
Our house is in negative equity so I could get that transfered as you said. We have four buy to let properties in joint names and in negative equity and two with about 20k equity between them.Would that equity go to the official receiver. Also I have heard that AMEX will go for bankruptcy the debt here is less than 2000 and in my husbands name.Do you think it is likely they will make him bankrupt?.
How would I go about DMP? What about credit card debts that are now in collection agents hands does it get nasty?
We are working so hard to make our business work and have great hopes for it. It is doing well so I feel comfortable in affording £1000 per month towards an DMP, this was what we were offering in the IVA...do you think we can save ourselves here?
I hope you can advise again on these questions, sorry there are so many
Thank you
I am so sorry to hear about the way the meeting has gone. Has your Nominee adjourned the meeting in order to try and get some more votes from your other creditors?
American Express has a particularly aggressive stance with people who cannot afford to pay them back. They have in the past tended to petition for bankruptcy but more recently where there is equity in a property they are more likely to try and protect their interests by going for a charging order. It is probably the two buy to let properties with the equity in that they are interested in.
It is unlikely that any of your other creditors would petition for your bankruptcy.
In bankruptcy all of your worldwide assets will become the legal property of the Official Receiver (OR).
He has three years to deal with your home (e.g. sell it or sell your interest in it). He can only deal with it if there is more than £2,000 equity in it, though there is a protocol that he will not touch it if there is less than £5,000. If he has not dealt with the property in the three years (i.e. he has been unable to because it has remained in negative equity) then the property will automatically return to you.
The buy to let properties will stay the property of the OR regardless of the equity in the property and you can, as Melanie says, purchase those in negative equity from him for £1 each (plus transfer costs). Those with equity in them can also be purchased back from the OR and he will be willing to negotiate on the price for these as he will not have to pay estate agents fees etc if you do so.
If you decided to go for a DMP then there are many companies who will be able to help you with this. The DMP company you choose will work hard to get your creditors to agree to the reduced payments and freeze interest, though as a DMP is not a legally binding agreement, there is no guarantee that your creditors will not take further action against you.
It is always possible however to try the DMP for a bit and then have another go at an IVA.
I hope though that your IP can turn the creditors around and get a few more votes in.
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
Hi Kat.
It seems really odd that you have only received one vote on such a level of debt. As there appears to be a trading business it is surprising that HM Revenue & Customs alone have not voted. Was your meeting today as many creditors do not vote until the last minute so you may be worrying prematurely?
If however your IP does not receive the votes to outvote Amex the proposal can be resubmitted or a new one proposed by another IP. This would be pointless if creditors had rejected but if there was a postal or timing issue it would be worth trying again.
Your IP is bound to be adjourning the meeting, and the fact that they only received one vote makes me suspicious that proper notice may not have been given (ever the cynic, me!)
It is a well known fact that AMEX reject all IVAs where the debtor's are property owners, as they prefer to pursue the charging order route. But they usually are not owed a huge amount and can generally be outvoted.
Thank you all for your replies. Our IP is chasing for votes so we will have to wait. This is like my worst nightmare. If it is not approved then my husband will have to go bankrupt or we will have to go for DMP
I cant bear the thought of the 30 calls a day starting again
Liberta and the other experts can you clarify again please that our residential house would have to rise in value within next three years by more than £5000 over the mortgage outstanding including secured loans for it to be taken by the OR?
I am figuring that may be unlikely in present climate. If not then we are safe to stay in it after this time? I take it that it will be in my name and I would continue paying the mortgage. What about the secured loan would that be transfered into my name automatically.Is there any possibility that the secured loan company would try to make me bankrupt, although if they did they wouldnt get their money back under current climate.What do you experts think?
My second question Re:the buy to let properties.Am i correct in thinking that the two properties with equity now would be taken in full by the OR unless I could buy out my share of equity or total equity? am a bit confused here...And i could transfer the others in negative equity to myself for a nominal fee? Does the same 3 year rule apply regarding the value of being £5000 above the mortgage? If i didnt want to buy them for a nominal fee could they come at me for the deficit on sale because they are in negative equity?
Sorry for so many questions, I need to get things straight in my mind about the bankruptcy implications for us if my husband went bankrupt.
My last question to the experts is if we both opted for debt management plans what happens if a creditor will not agree to it and takes either one of us to court. Will we then have an order to pay off the debt through the court each month and also will it be realistic? As i said before we can afford £1000 per month to clear our debts.
But this would take 10 years and only if they froze the interest. Is it likely after 5 years we could attempt to offer amounts for full and final settlement to them if we were able to ?
Thank you for all your help you are a lifeline, I am feeling very low today and cant take much more. We work seven days a week to try and survive I cant bear the thought of losing it all
1/ There would have to be over £5,000 equity in your home for the OR to take any action against it. This is what is left after the mortgage and secured loans have been taken into account. If after the end of the 3 years the OR had taken no action, then the legal ownership of the property would automatically return to which ever one of you had gone bankrupt (your husband I presume). The title to the property would once again be in the names of you and your husband.
2/The mortgage and secured loan stay in your joint names throughout. It is unlikely that the secured loan company would try and make you bankrupt if you were paying the loan installments.
3/ It is your husband's interest in the buy to let properties that his OR would be interested in. So if the total equity in one of the properties was say £10,000, your husband's share would be £5,000 - and this is what you would be making the offer to the OR for.
4/ If any of the properties were reposessed or surrendered to the mortgage company or secured loan company then you would be liable for any deficit on the sale - your husband would not as the shortfall would come into his bankruptcy.
5/ If you were in a DMP and a creditor took you to court, the court may make an installment order which would be based on your ability to pay, taking into account the payment to your other creditors.
6/ If you were in a DMP and were able to make an offer to your creditors in full and final after a period of time, then you should do so - your creditors are very likely to accept the offer. Be sure to get their agreement to the offer in writing though before parting with any money if the offer is not made through an IVA.
Anyway - I am sure that your IP is working as hard as he can to get your arrangements approved. Fingers crossed for you.
Kind regards, Elizabeth Pywowarczuk, Insolvency Practitioner.
If you would like me to advise you about an IVA and if appropriate propose one for you, please visit my website at www.liberta.uk.com
When was meeting as I still cannot understand how no votes were cast other than Amex?
If the votes are not received it is important that you resubmit your proposal either through your existing or a different IP before you consider bankruptcies or DMPs. Only if the proposals are rejected outright by creditors would I think of the alternatives.
It doesn't make sense Michael! You and I remember the days when we were in Derry ringing round for votes 10 years ago, but these days we find it unusual not to see most people voting - and most votes seem to come in at least three days before the meeting in general.
Kat - please urge your IP to be proactive about this - may I ask which firm you are using? If it is one of the larger "factory" type outfits, try and speak to the IP or at least a senior manager to make sure all is being done to secure the votes. If you would like to post a list of creditors, we can perhaps see where the voters lie - as a lot of creditors tend to use a couple of well known voting representatives to do the voting for them.
Melanie,
thank you I am so grateful for your input.
Can you give me the link on creditors voting please because I know that my IP has managed to contact 5 credit card creditors at the close of business today,I so want them to agree to this, they have said that they would look at it.
