www.iva.co.uk

Hi there, I wonder if you can help. My husband and I set up a business last year that has now gone into liquidation. We have two loans secured on the house - one that is part of our mortgage. We bought our house last January when prices were high and we also paid the ceiling price on the road. We now believe the house is in negative equity by around £17K, taking into account the loan we took out on it. With this in mind, and the creditors loans of around £30K (personally guaranteed), we've been advised that bankruptcy would be our best option as we are in negative equity and therefore unlikely to lose the house (we understand we are still liable for secured loans etc, and I have a job which means we have enough to pay these each month). But I'm struggling to ascertain exactly what happens with 'beneficial interest'. If my parents were to buy the beneficial interest, would they be liable in ANY way whatsoever (ie paying the mortgage etc) and would it affect their own credit rating? So far, they find the whole situation very scary and am having trouble finding information to reassure them that there is no risk to them, which is what we've been led to believe.
Hoping you can shed some light on the situation...
Kind regards

Hi Donna and welcome to the forum

Your parents would not be liable for any ongoing costs relating to the property, and they could sell it back to you once you have been discharged from bankruptcy. This is really a paper exercise, which is necessary so that you can take the property out of the bankruptcy estate and let the Trustee close your case down as quickly as possible.

I suggest that you find a lawyer in your area experienced in insolvency law, to have a chat with your Mum and Dad to set their minds at rest on this point.