www.iva.co.uk

Hello,

Does anyone know if it is legal and acceptable for me to sell my beneficial interest my home just before petitioning for bankruptcy.

I have been told by my IP that I can do this, as long as I have 3 valuations demonstrating that I have negative equity.

I am all a bit sceptical about this, can anyone help as I just cant believe this is true????

The main reason for doing this is that the Official Receiver will then not deal with my interest in the property, and the house will be secure from my creditors?

Many thanks,

There will not be a problem if you can demonstrate (which you will be doing via the 3 valuations) that you are selling the benificial interest for its true commercial value.

You will need to make sure you use a solicitor to effect the sale but it shouldn't cost more than a couple of hundred pounds in legal fees.

Is the IP suggesting the person you are selling the property to effects a legal charge ???

In order for ownership to transfer validly you will need the consent of the lenders who have a charge on your home.Without that consent a transfer cannot take place and normally lenders will only give that consent if they will be paid in full.
I think that you have in mind "selling" on your negative interest for say £1 which clearly won't pay off your secured lenders so I'm afraid that this won't work.
In any event I would strongly advise you (unlike your IP) to get involved with transactions like this prior to bankruptcy, its only likely to annoy the Official Receiver.
Your Trustee in bankruptcy will be far better placed to sell on your beneficial interest to your partner for a nominal sum (assuming there is negative equity) than you trying to do this yourself prior to bankruptcy.
If you are unsure about this take a printout of this post, show it to your IP, and ask for his comments.

I think the IP is suggesting a sale of the beneficial interest or future interest ?? not transfer of ownership so the first charge holders don't need to give consent unless the wording of the first charge expressly requires it.

I have only ever come across this when a couple have split and the partner left in the property aquires the beneficial interest for a nominal sum whilst both parties remain on the mortgage deeds.

I am sure the OR would be wazzed of more so because of the added hastle of ensuring the legality of the agreement. Would this also be seen as premeditated and mean I more thorough review of all other financial affairs ??

Assuming that the property is in joint ownership(we don't know) and that pm.e is intending to transfer beneficial interest to the joint owner for £1, LEGAL TITLE could still not be transferred without the approval of the secured creditors.
If the property was owned solely by pm.e and the intention was to transfer to a friend, legal title would vest in the OR on appontment, even if the beneficial interest had been transferred previously.
Either way, there's no point transferring the beneficial interest without legal title.

As to the last point you make, yes I agree.

Hello,

Thank you all for the posts.

As far as I am aware its only for my beneficial interest not the actual ownership of my home.

I am confused, my Insolvency Practioner says its fine, although I dont have a clue!

Any more thoughts would be helpful.
Many thanks,

Hello,

Forgot to mention, I own the property jointly with my wife.

See the posts of Storm and I above. I really don't think that this would be a good idea but, again, show your IP these posts and ask them their opinion.

Did you get this advice from the IP directly or one of his/her staff?

Hi,
Straight from the IP himself.

by email as well