a) Sister in law’s husband had big gambling debts and were advised by a “Financial Advisor”, badly I think, to seek bankruptcy which they were granted in July 2009.b) Sister in law personally had her bankruptcy discharged after 12 monthsc) Sister in law’s husband not to be discharged for 3 years i.e. it should be ‘discharged’ this month or next.d) They have one of those mortgages which is half owned by housing association (shared ownership) and the financial advisor had told them that as it was shared ownership, their ownership couldn’t be touched by the ‘trustees’ of the bankruptcy (I think “trustees” is the word – the people who try to get the money back for the creditors).e) These ‘trustees’ have now written to my sis in law just this week to say that they are now responsible for administering the debt. My sister in law phoned them up and they told her that they would be asking the housing association to sell the house and asking for a £15,000 settlement “if she settled quickly” (total equity is £22,000 I think). My sis in law has no debt with the Housing Association to whom she pays part rent on the property in addition to her mortgage which she is also up to date with. She cannot in any case sell the house without doing so in co-operation with the Housing Association who have to approve any new joint owners as meeting their criteria.My questions are:a) Can the trustees, through the courts or other means, force my sis in law to sell her equity in the house in order to claim back the debt?b) Do the trustees have fewer legal avenues after my sister in law’s husband has his bankruptcy discharged? If so, is this likely to be why they have contacted her one month before his bankruptcy is discharged.c) Any general advice – my sis in law simply wishes to stay in the house and is aware she will have to repay any debts when she sells the property but is not intending on moving for many year.I'm going to get legal advice later in the week - just wanted an idea of the position now.
Province/Country relating to question : London, UK
Going to see a solicitor in a few days... just hoping for an idea of the position through Just Answer so only expecting one or two bullet points as answers
Thanks for your question. Please remember to AGREE my answer so that I am credited for my time.Who is named on the land registry?
Shared ownership between the Housing Association as a corporate entity as 60% owners with my sis in law and her husband 40% owners.
And was tenancy ever 'severed'?
To my knowledge the tenancy was never 'severed'.They certainly continue their rental payments and all contractual agreements with the Housing Association so the tenancy/rental side of things is the same as it was when they original bought into the "shared ownership" agreement. There is no debt to housing association or anything like that.
Ok let me come back to you a little later on today.
Thank you. Apologies for delays in responding to your questions - was trying to put my kids to bed at the same time.As I said, sis in law knows she'll have to eventually pay money to trustees from any future sale e.g. in 10 or 15 years time... but is hoping her original advice from dodgy "financial advisor" type that the Trustees could not legally force a sale due to the 'shared ownership' status of the house was accurate.Otherwise I am assuming she will have to make an offer to the Trustees to "buy back" the beneficial interest in the house and they want £15K that she simply doesn't have. I'm not overly keen on lending her £15K so await your response with interest!Many thanksJoe
If tenancy was never severed then husband and wife share are mixed.As such the OR would have a claim against the whole house and not just the property of husband.So to answer your questions:a) Yes the trustee can through the Court seek an order for sale on the property in general because of the claimb) No - even if discharged there is a charge on the land registry, this needs to be removed for the Trustee to have less legal powersc) Your sister needs to make an offer for the Trustee to drop the charge. If you lend £15k you can secure a charge behind the Trustee.If the Trustee is happy they will remove the charge and you would come behind any mortgage. Please remember to rate my answer positive so that I am credited for my time. Thank you.
Called to the Bar in 2007
Thank you for your message. I am not sure if you have understood the original question. The question was NOT in relation to whether the trustees would have claim over the portion jointly owned by husband and wife which is ONLY 40%... to reiterate, 60% of the house is owned by a Housing Association which is an independent organisation. Only 40% is owned by the husband and wife.Are you saying that the trustees can force sale of a house when the husband and wife jointly only own 40% of the house and 60% of house is owned by an independent Housing Association?Thanks for the clarification.
Correct.A person that holds ANY charge can force a sale. A sale would be of the WHOLE property - not just part of it. Please remember to rate my answer positive so that I am credited for my time. Thank you.
I'm just following up with you to see how everything is going. Did my answer help?UK-Justice
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