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Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 22388
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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I have an IVA - now 2 years and 3 months complete. If this

Customer Question

I have an IVA - now 2 years and 3 months complete.
If this IVA was to fail....and I file for bankruptcy...
would the house I used to live in with my wife be
liable and would she be forced to sell to release the equity ?
The IVA began when I moved out into rented accommodation,-
the question of previous address never arose, I was asked whether I
owned any property which of course is technically no as the
mortgage still has 10 years to run, with 40,000 still owing ?
I do not pay anything towards the current mortgage and she
pays all the insolvency worker does not know about this
property -I was never asked and it does not generate any income. It is worth around 145,0000 mortgage still has 10 years to run....?
Submitted: 2 months ago.
Category: UK Law
Expert:  Stuart J replied 2 months ago.

Good morning. Thank you for the question. It is my pleasure to assist you with this today.

Why do you say that technically, you don’t have another house?

Is there a court order transferring it into your wife’s name?

Customer: replied 2 months ago.
No the house is in joint names. We are not divorced. I do not live there or have any financial interest in it,
except it could be sold, the mortgage outstanding paid, leaving my wife and I with the profit from the sale.
The reason I ask this question is that it is possible the IVA may fail if I am made redundant, ...or unable to
return to work after current sickness. If this happens I would file for bankruptcy - BUT would my wife be forced to sell so that creditors can reclaim the debt owing ? There is no court order transferring to my wife's name....should I pursue this course
of action to ensure the house house is safe for my daughters age 11 and 14 ?
can claim outstanding debts ?
Customer: replied 2 months ago.
How that last sentence is presented is bizarre......."can claim outstanding debts?" where did that come from.
The question is simple, - can - if I file for bankruptcy my wife be forced to put the house she and my children live in
by creditors wanting to re-claim the outstanding debts - which will be about £11,000 ?
Expert:  Stuart J replied 2 months ago.

Unless the court has ordered otherwise, you do have a financial interest in the property by virtue of the fact that it is the marital home. Regardless, this should be disclosed to the IVA supervisor because it needs to be taken into account.

The fact remains that you have a legal interest in the house and it should have been disclosed.

If you have to go bankrupt, the trustee in bankruptcy would want your share of the house whatever it is. It may not be 50% of the equity, it may only be a tiny percent of the equity bought nonetheless, the trustee will want it.

If you go bankrupt, it wipes out all your debts but also takes any equity in the house which belongs to you.

It’s unlikely in the extreme that with a house of this value in this mortgage, that the trustee in bankruptcy would force a sale of the property even if you owned 50% of the equity. The trustee in bankruptcy and the courts will simply not force a wife out of the house particularly if there are children, unless there is a fantastic amount of equity in your favour which clearly there is not.

However I emphasise once again, this equity in the house, regardless of how much it is, should be disclosed.

Customer: replied 2 months ago.
OK...that is helpful......I have never mentioned my previous I have never been asked for it, and it does not draw any financial obligations from me......but yes ----very helpful and re-assuring if -- and only if the worse happens
Expert:  Stuart J replied 2 months ago.

You should have disclosed the house ownership along with disclosure of your other assets and liabilities.

It is not common for a spouse to be evicted from the marital home and it sold from underneath them unless there is a fantastic amount of equity in it which there is.

I am not certain whether that answers your question or not but I am happy to answer any specific points arising from this.

Please do not forget to use the rating service to rate my answer positively. Unless you rated positively, I don’t get paid.

You may get the impression that the thread closes after rating, but it does not, it remains open and we can still exchange emails if anything needs clarification.

Kind regards.


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