My personal loans and debts equate to around £20.000 and the repayments are crippling me. I suffered a major injury last year and have experienced a big cut in earnings. I am separated from my husband and receive an income / maintenance from him although barely have enough to make ends meet. This would seem a simple case, but its the following factors that i am concerned about :-
When I legally seperated from my husband some eight years ago we agreed I keep the main residence and another property. Both these properties have big mortgages on them although also a reasonable amount of equity. As I was not a big enough wage earner my husband had to stay on the mortgage. Through his solicitor he wrote to the land registry on both of these properties and severed the joint tenants in favour of tenants in common and granted me 99% ownership of each property through deeds of trust. Unfortunately my ex husbands business failed in 2017 and at the same time he went into personal bankruptcy it was a very messy and hostile affair.
The official receiver immediately put restrictions on both my houses while they investigated the deeds of trust and the severing of the joint tenants. Fortunately the documentary evidence dated 6 years prior to my husbands bankruptcy was available for the official receiver. One particular creditors was so hostile they questioned the official receivers and forced them to be replaced by another official receiver six months into the bankruptcy.
Its been 18 months since my ex husband was made bankrupt, he is out of bankruptcy for six months now although the restrictions from the official receiver are still on the titles of my two houses. I neither have the energy or monies to open up a can of worms. The official receiver has never wrote to me confirming acceptance of my claim or rejection of my claim on these two houses so I decided to leave it as it was. I was informed that after three years you could have the restrictions removed and that was my intention. I rely on the income from the second house to facilitate my bills and would be happy to offer it as security although as i mentioned I'm not sure what the official receiver who has the restriction in place will react?
Finally its the second complication that is my biggest concern and the reason for the blog. When my husband went bankrupt apart from property we had no joint liabilities apart from a yacht which had a mortgage on it with Lombard with an outstanding balance of £80000. At the time of my ex husbands bankruptcy I was in a far better financial place than I find myself in now. I was aware that the mortgage on this boat was a joint and several liability. I decided to keep the boat and sell it privately rather than let the official receiver sell it in a fire sale and I end up with another debt. I wrote to the first official receiver expressing my interest, basically my offer was the mortgage amount. The receivers reply was they would consider my offer in due course after they established if the boat had any excess equity in it. I heard nothing further!. When the second official receiver was appointed I wrote to them again twice they again were considering my offer. Finally they came back to me saying did I still want to purchase the boat? On the same day I received a solicitors letter on behalf of Lombard the boat had been sold for £36000 a week earlier and I find myself owing £55000 plus costs!!!!!!!!!!!!!
I fought the first summary judgement and had it dismissed. The solicitors will be pursuing me again and I do not have the funds to fight it. It is clear that either Lombard have messed up or the Official receiver, if money was no object my solicitor is stating that If lombard were innocent in this matter I would lose the case hands down, but have a strong counter claim against the official receiver either way I find myself between a rock and a hard place. I effectively have enough equity in my properties to easily cover my debts, but it means approaching the official receiver who is hostile and added to that still has the restriction on my two properties so i cant use them anyway especially if its to fight a counter claim against them!
Back to the question is an IVA suitable? with the above circumstances taken into account with specific answers to the following questions?
1) If I applied for an IVA would the disputed debt be included?
2) What would happen about my houses as at the moment the restriction states I can not do anything without the official receivers say so?
3) If I was allowed I would offer the second property up for security with a view of selling it after the IVA was finished and settling any outstanding debts.
I am open to suggestions obviously I have seen from very close quarters what the consequences are for selling an asset / property in a fire sale against it being on the open market. With the added uncertainty of brexit on house prices my hypothetical large equity content could be whittled away to nothing so i need to tread carefully. Your thoughts and comments would be appreciated.
No-one on an open forum such as this would be able to give qualified advice on such a complicated scenario, which would need dedicated consideration by an expert who has access to all of the facts / paperwork and personalities involved.
For what they are worth, my thoughts on the situation are:
1) The disputed debt would be included in the IVA, either as an actual debt or as a contingency debt.
2) The houses are under the control of the OR until ( I believe) 2 years and 3 months from when they became aware of the asset, after which they will be either sold or released back to you both. The IVA could be written in such a way as to exclude the houses, to be either looked at again when released by the OR, or by extending the IVA in lieu of the asset. However, on your current circumstances your monthly payment is going to be modest, so it could be quite an extension to the term, if they even consider that option.
3) You cannot defer repayments until after the IVA is settled. They may allow the IVA to start with the requirement that the second property is sold during the course of the arrangement and the proceeds paid into the IVA --- whether this would be sufficient for early settlement would remain to be seen.
An IVA is the best option for you to clear all your unsecured debts. In relation to the properites, these can be either be voluntarily surrenderd and the shortfalls can be inlcuded in the IVA as unsecured debt and cleared or you can exclude both properties and mediate on the shortfalls at a later date.
I would be more than happy to have a chat about this with you to discuss your options.
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