where do i stand

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Post by sio » Thu Jan 31, 2008 2:03 pm
my ex partner owes around 65,000 and is struggling to make a decision between an iva or bankruptcy! we did have a joint mortgage until november when i had to remortgage the house and he had to transfer equity because of our separation he was given 11,000 out of the remortgage which paid some of the debt he owed. there is still some equity left in the property where do i stand if a credtor was to declare him bankrupt as he has a petition pending? there isnt a lot of equity left anyway


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Post by ianmillington » Thu Jan 31, 2008 2:27 pm
The interrelationship between Bankruptcy and matrimonial law is a very uncomfortable one, and one which is frought with difficulty for all concerned. If your husband goes bankrupt your worst case scenario is that the transfer could either be overturned as a Transaction at an Undervalue by the Trustee in Bankruptcy, although from what you say you may have an arguable defence to the Trustees claim. If, however, this all took place after the presentation of the petition then you are in a rather more difficult situation as unless cause can be shown to the contrary it will be void by virtue of Section 284(3) Insolvency Act 1986. These potential claims are triggered by the Bankruptcy Order so you are wise to seek advice whilst the petition is still pending. That might at first sight make an IVA seem rather more attractive.

To know exactly where you stand you need to take urgent advice from a local Insolvency Practitioner or an Insolvency Lawyer at a meeting where all the facts are laid bare, without which any advice you receive is unlikely to be reliable.

Hope this helps

Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd)


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Post by MelanieGiles » Thu Jan 31, 2008 8:16 pm
Even if an IVA does appear to be a more attractive option, your partner will still have to declare recent transfers of assets to enable creditors to determine whether they are getting a better deal than may be available under bankruptcy proceedings.

It sounds to me as if the transfer was made a proper value, and if there is little equity remaining in your property then I would not have thought that there is a major issue here, but given that there is a bankruptcy petition out there Ian's advice is good to take legal advice. I would recommend that you go to a lawyer rather than an IP - who may just refer you to a lawyer!
Regards, Melanie Giles, Insolvency Practitioner
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