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Category: UK Law
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My wife is a Sole Trader (Catering) for 20+ years. She has

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My wife is a Sole Trader (Catering) for 20+ years. She has just let me know she wants to go bankrupt (owing £70K to credit cards and bank). We have a joint mortgage for insurance purposes ie. it was done on my salary. I need to know whether her debtors can come after her half of the house as an asset?
Submitted: 4 years ago.
Category: UK Law
Expert:  Thomas replied 4 years ago.

Hi

 

Thanks for your question.

 

If your wife does go bankrupt then your wife's half of the house is at risk, your interest in the house or the proceeds of sale is protected. The official receiver/trustee in bankruptcy may have to sell your wife's interest in the property to satisfy her creditors.

 

It is not a one way process and you should make your interest known to the OR/trustee. It is possible to put off the sale of the property until the expiry of the first year of bankruptcy so that you can make other arrangements.

 

Once your wife is ordered bankrupt she will remain registered on the legal title to the property but her beneficial interest in it passes to the OR/trustee who effectively then controls it.

 

If you are able to buy your wife's interest from the OR/trustee then you should speak to the OR/trustee about doing this. You would need to demonstrate sufficient income in your sole name to receive a mortgage offer in your sole name.

 

If you wife does not go bankrupt but defaults on her loans/credit cards then the creditor may apply for obtain judgement on the debt and then apply for a charging order against the property (again,your interest is protected). This could then allow them to apply for an order for sale but you would be able to make representation as to why the property should not be sold.

 

If she does go bankrupt then you've got to be proactive with the OR/trustee on whether the house will be sole, whether you can postpone it for the first year of bankruptcy or whether you are to buy the interest from them. Make some enquiries about whether you are eligible to receive a mortgage offer in your sole name if your wife does decide to go bankrupt.

 

Sorry it could not be better news. It's a very difficult situation and you have my sympathies.

 

If this is useful please kindly click accept so that I may be rewarded for my time. It will be gratefully received and you will be free to ask follow up questions.


Kind regards,

 

Tom



Edited by Thomas on 9/2/2010 at 8:05 AM EST
Thomas, Lawyer
Category: UK Law
Satisfied Customers: 6514
Experience: BA (Hons), PgDip, Practising Solicitor
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