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Max Lowry
Max Lowry, Advocate
Category: UK Bankruptcy Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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I am a sole trader publican and I am being made bankrupt by

Customer Question

I am a sole trader publican and I am being made bankrupt by the H.M.R.C.for nonpayment of V.A.T AND taxes.The public house my wife and I live in is freehold,but we have a brewery loan on it, today it stands at £27,677.78 plus interest at 5.5% for twenty-two days I am led to believe that after the loan and selling fees are paid that 50% goes to my wife and the other 50% goes to pay off my debts.It has been for sale for three years with no viewings,the property was valued at £380,000.00 in 2008 and has been dropped to £180,000 but we will be lucky to get £150,000 with how bad the recession in this area is.

In May 2009 we bought a house for our retirement my wife paid the deposit of £10,000 from her savings account i.e. her retirement pension but could not be on the mortgage because of her age she was sixty-six I was sixty-three and eight months and I got an interest only mortgage in my name.We put the house up for sale to pay off some debts but last month we had to take it off the market be cause the Land Registry said because of bankruptcy.

Is my wife entitled to her deposit back.

Yours truthfully
j.n hurst
Submitted: 2 years ago.
Category: UK Bankruptcy Law
Expert:  Max Lowry replied 2 years ago.

Max Lowry : Hi, welcome to Just Answer. I will help you with your question.
Max Lowry : Your question is: is your wife entitled to the £10,000 back that she put in for the purchase of the residential property when/if you become bankrupt. is this correct?
JACUSTOMER-g73tbfnr- : yes
Max Lowry : Okay.
Max Lowry : Her interest is completely separate to yours. If she jointly purchased the property with you, then chances are, she will be half owner of it with you, and would be entitled to more than the initial deposit that she put down. She would presumably be entitled on this basis to 50% of the net sale proceeds (from when it sells). And her interest would not fall within your bankruptcy estate - if you are made bankrupt.
Max Lowry : Needless to say, if the £10k was a simple loan to you, and she is simple entitled to repayment of that loan, then she would rank as an unsecured creditor with everybody else in the bankruptcy, which might mean she gets little (if anything?) back at all.
Max Lowry : It all comes down to what agreement you reached when you entered into the agreement/arrangement when you acquired the property.
Max Lowry : Does that make sense?
Customer: what evidense to i need
Max Lowry : Well, if you had any agreement, you'd need evidence of that. That evidence could a written agreement, or it could be your witness statements (that you'd provide now if requested) to show what you both orally agreed.
Max Lowry : And, she'd need to show she paid the £10k, which is presumably, just the case of showing a bank statement?
Max Lowry : Also, the trustee/official receiver would be entitled to ask your solicitors for your conveyancing file, so if there is anything on there that would help, he would be able to see that too (mention might have been made at the time as to the basis for her investment).
Customer: her name is XXXXX XXXXX trasfer to the solicitor
Max Lowry : Sorry, what do you mean, I thought you were the sole owner of the residential property (as there were issues with her going "on the mortgage")?
Customer: thats correct but she paid the deposit
Max Lowry : Yes, okay. Well, all this would get looked at by the trustee following your bankruptcy.
Max Lowry : So, if she appears on the solicitors file as though she was intending to be a purchaser, then it looks like this is good evidence of what you agreed - that yiou'd own it 50:50 (in all but legal formality due to the age issue).
Max Lowry : So, this would mean she's entitled to 50% of the net sale proceeds, not just the £10k.
Max Lowry : Does this answer your question?
Customer: Yes thankyou very much
Max Lowry : Okay, no problem. Could I ask you to rate the answer as highly as you can for me please. If I can help you any further, please do just let me know, either now or in the future.
Max Lowry, Advocate
Satisfied Customers: 1457
Experience: LLB, 10 years post qualification experience
Max Lowry and other UK Bankruptcy Law Specialists are ready to help you
Customer: replied 2 years ago.
possibly the ony bit of luck inyears thanks again and thankyou from the wife
Expert:  Max Lowry replied 2 years ago.
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