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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7609
Experience:  BA (Hons), PgDip, Practising Solicitor
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My brother-in-law currently lives with myself and my wife.

Customer Question

My brother-in-law currently lives with myself and my wife. (for the last 18 months) My brother-in-law has a business, is currently free-lance but is considering bankruptcy as he has accrued large debts and is not in a position to pay them. Currently he is living rent free and a pays us a little towards his upkeep. My wife and I are concerned that if he does go bankrupt, that his residency have an affect on our own personal assets and our credit rating. Could you please let us know what are obligations are in event of this occurring and are we liable to any of his creditors?
Submitted: 7 years ago.
Category: UK Law
Expert:  Thomas replied 7 years ago.

Hello Dopplebockdunel,


Thank you for your question.


Does your brother in law actually have an interest in the property?


If he effectively just lives there and pays only a nominal amount towards upkeep then this could not be said to be an asset of his. If he is an individual (as opposed to a limited company) and a court eventually appoints a trustee in bankruptcy then the his estate will vest automatically in his trustee in bankruptcy. His estate includes all of his real or personal property (excluding the tools of his trade/clothing and furniture)


On the facts above, he does not have any interest in your property (he is probably a licensee) and therefore you will be unaffected. It would be a different scenario if he actually had a registered interest in property.


You may be contacted by his trustee in bankruptcy to confirm the arrangement you have with him once he has submitted his statement of affairs to the trustee


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Kind regards,



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Customer: replied 7 years ago.

Thanks Tom. No my brother-in-law does not have an interest or stake in the property so we should be okay on that front. Will our credit ratings be affected however?


In addition my brother-in-law has a motor car that he is reliant on for his work that is fully paid for and is his own asset. Is this likely to be claimed by the creditors? If this car is claimed, he would be unable to work which would defeat the object of him being able to repay his creditors if he did go into bankruptcy. Our such items negotiable in a bankruptcy arrangement?

Expert:  Thomas replied 7 years ago.



Your financial affairs are separate, your credit rating will not be affected simply by you allowing a bankrupt to occupy a room in your house at nominal rent.


He should certainly maintain that his car is one of his essential tools of the trade and is therefore excluded from the trustee in bankruptcy's definition of his estate. If he can demonstrate that he needs it for his work he should be fine.


Kind regards,



Customer: replied 7 years ago.
Thanks Tom For all the information.
Expert:  Thomas replied 7 years ago.

You're welcome.