do i still have to pay the new creditor in full

[m_j]

my debt inc mort approx £130k ish inc trustee costs. could i apply to the courts to pay creditors in full and avoid paying interest? what if my orig creditors no longer hold debt and have sold to a third party at a discounted price, do i still have to pay the new creditor in full {debt only} thanks

[MelanieGiles]

Hi mj and welcome to the forum

I am assuming that you are already bankrupt - is this correct?

You can apply to Court for the bankruptcy to be annulled on grounds that all debts have been paid in full. Find a solicitor to act for you, who will deal with all of the creditor claims and possibly negotiate discounted settlements - but the bottom line is expect to pay all debts in full with statutory interest which runs at 8% per annum from the date of the bankruptcy order.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[m_j]

hi melanie,

answer yes to first question.
would i be able to pay my debt in full without 8% as my assets would not cover the interest? i can cover the full debt by the sale of my house. could the matter be annulled if the original debt is paid off?
what if the debts have been sold to a 3rd party and the trusty is not aware of this and he's only got the names of the original creditors from 2001/02? can he pursue matters based on original creditor or new ones now?
thanks.

[MelanieGiles]

Hi again

Your solicitor could try and negotiate with creditors for you not to pay statutory interest, but this can only be done with their express agreement.

If debts have been sold to third parties, this makes no difference - and it is your duty to advise your Trustee if you are aware that debts have been assigned. I find it strange that he would not know about this however!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[m_j]

Hi Melanie,
Thanks for your help.
The trustee will let me buy the house for £142.5k and I can remortgage the house but at a higher monthly cost.
The problem I have is my wife owes about £60k and has no assets in her name.
The house is in my name and will be again when I pay the trustee.
My mother has contributed to the mortgage from 1991 ish to 2001 {before bankrupt} and is making a claim on a % of the property as she expected to be paid when the house was sold.
My wife is claiming 50% as she was married and had a child prior to my situation as she worked and took out a bank loan.
If she goes bankrupt after losing her claim and the house is in my name only can her trustee come after the house which would be in my name only?
Would it be be better for her to go bankrupt first and I buy the house later?
Also my mother will give deposit for the house and she would put a charge on the house for the new loan to me.
Complicated is my middle name!!
If my wife wins she will offer 50p per pound to her creditors.
Hope you can help with the above!
Regards.

[m_j]

CAN ANYONE HELP ME WITH THE SITUATION BELOW AS TIME'S RUNNING OUT AND I DON'T WANT MY CHILD MADE HOMELESS!!!
THANKKKKKKKKKKKKKKKKKKKKKS.

The trustee will let me buy the house for £142.5k and I can remortgage the house but at a higher monthly cost.
The problem I have is my wife owes about £60k and has no assets in her name.
The house is in my name and will be again when I pay the trustee.
My mother has contributed to the mortgage from 1991 ish to 2001 {before bankrupt} and is making a claim on a % of the property as she expected to be paid when the house was sold.
My wife is claiming 50% as she was married and had a child prior to my situation as she worked and took out a bank loan.
If she goes bankrupt after losing her claim and the house is in my name only can her trustee come after the house which would be in my name only?
Would it be be better for her to go bankrupt first and I buy the house later?
Also my mother will give deposit for the house and she would put a charge on the house for the new loan to me.
Complicated is my middle name!!
If my wife wins she will offer 50p per pound to her creditors.
Hope you can help with the above!
Regards.

[MelanieGiles]

Sorry mj - for some reason I missed the 17 May post.

In order for me to be able to assist you properly, please
answer the following:-

1 Date you were made bankrupt
2 Level of unsecured debts in the bankruptcy
3 Amount you owe on the present mortgage
4 What is the Trustee's view with regard to your mother's claim.
5 What is the Trustee's view with regard to your wife's claim?

Also, there is no problem in your mother giving you a loan as a deposit to purchase a new house - or to buy back your old one.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[m_j]

Hi Melanie,
Thanks a million!!
I was made bankrupt in 2001 and now discharged.
Debt unsecured just over £50k.
Mortgage inc arrears £60k.
Trustees cost £25k {looks like I've been taken on a ride}.
Trustee does not know about mothers claim yet as we only found out {solicitor} after he tried to possess the house via court but failed as wife put charge on property in 1992 {matramonial home}. Judge asked us to get assistance {exceptional circumstances} re her claim and if I could pay my creditors less as the original debts were sold to third party. We also found out that my mother has a right to live in the house as she contributed lump sums towards the mortgage.
Trustee claims wife has no right to the property as it was bought in my name in 1991 and we got married in 1999. Wife had a child {2000} and contributed to mortgage and still does now.
My concern now is if wife goes bankrupt after/before I rebuy the house in my name only what happens!! My mother will put a charge on the property as she will pay the deposit.
If wife loses claim trustee will come after her for costs as the only thing stopping possession is her charge.
Hope you can help!
Thanks again.

[MelanieGiles]

Hi mj

So if I understand things correctly there is a house which is valued at say £140,000 and you have a mortgage of £60,000, leaving equity of £80,000 which your Trustee is claiming is vested in him in its entirity, due to the fact that the property is registered in your sole name.

As you were bankrupted in 2001, your Trustee had until 31 March 2007 to commence proceedings against you for the recovery of said equity. Has he commenced any proceedings against the property for possession and sale yet? If not, then he may have lost his right to deal with the property in any case. This is an important point to check out as it could make a fundamental difference to the outcome of your case.

Assuming that the Trustee has secured his interest in the property, you then need to consider the strength of your mother's and wife's claims - for which you will need to take legal advice.

Does your mother actually live with you at the property? If she does, then she may well be successful in claiming a beneficial interest in the property as a result of her contributions towards the mortgage. She will need to demonstrate actual payments made directly to the mortgage company, between 1991 and 2001, and you will need to satisfy your Trustee and/or ultimately the Court that these payments were made with the intention of her obtaining an interest in the property, rather than just helping you out. These matters can be quite complex and costly to bring and defend, and you must take specialist advice from an insolvency experienced lawyer who will be able to review your case and advise whether you have any chance of success.

With regard to your wife, who you married in 1999, you will also need to show that she has contributed to the general running costs and upkeep of the property in order to successfully claim that she has an interest.

It would help your case if you have valuations of the property at 1991, 1999, 2001 and now - to demonstrate the shares that each party may have contributed to. A good surveyor ought to be able to provide retrospective comments, and I would have thought your Trustee would have already discovered these details - especially given the costs he has incurred.

Bottom line is that if the Trustee has correctly secured his interest in the property, and your mother's and wife's claims are not held to be valid - and you can only confirm this by agreement with the Trustee or a Court Order, then you will need to pay over approximately £140,000 to discharge bankruptcy debts and costs in full. There is insufficient equity in the property to support a payment at this level.

Hope this helps for now. Key thing to check is what action has the Trustee taken against the property. You may find that he has simply run out of time! Who is the Trustee and which firm is he from?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[m_j]

Hi Melanie,
Sorry I've just got in from work.
The trustee has applied for a possession order but has failed so far as my wife put a charge on the property. The only thing stopping him is the charge as the judge stated my wife may be entitled to a % of the property as she is non bankrupt partner. Trustee wants vacant possession so that he can control the sale and has applied to the court.The hearing took place on 27 March 07 and we are waiting for new date for the case to continue as he failed with his claim.
The matter regarding mother is that I had another partner and when we split up I moved out and she was going to buy the house. She didn't pay the mortgage and moved out , I moved back in and my mother paid the arrears directly as they wanted to possess the house.
Problem mother has is finding the receipts!!! She made payment on the understanding I would pay her back. She also stays at the house for one week each month.

Trustees cost to date:

Official receiver dist 828
trustee remuneration 12079
vat on rem 2114
trustee bonding 440
property valuation {drive by} 569 {i can have it done for under £250}
legal fees 5500 {solicitors} + vat 900 + misc {trustee cost £23k and change so far}.
Trustee Laurence Factor of Newman & Partners Harrow.
WOULD I BE ABLE TO GET A COMPLETE BREAKDOWN OF HIS COSTS AS THEY ARE VERY HIGH ESP THE £12K?
The wife took a bank loan in 1999 for £5k which we used to have the house upgraded {carpets, garden, bath and mortgage}. She also worked and had a child.
I think when I went bankrupt the house was worth £85k in 2001 ish I bought the house for £51k in 1991.
By the way what's the best solution in regards to buying the property without my wife having any interest in the property!!
Have a good night.

[MelanieGiles]

Hi mj - and thanks for the detailed note. Things now look a lot clearer to me.

Firstly, please accept that any comment I make on this forum is without the benefit of a full file review, or knowing the Trustee's side of the issue. My comments are therefore ones of personal opinion to the facts as briefly presented to me, and may not be fully representative of the complete situation. For a definitive opinion then you would need to take specialist legal advice.

I can see the judge's dilemma, in that he feels that your wife may have an interest in the property which is yet unquantified. If she is able to prove that the loan monies were used to improve the property, then this may be acceptable as part of an overall claim. The nature of her occupation of the property since you met does not always give grounds for the acquisition of an interest.

I think that your mother's case is less clear, as she just appears to have provided you with money to pay off mortgage arrears. This may not necessarily constitute gaining an interest in the property.

With regard to the Trustee's own fees, I have to say that I do not particularly note them as excessive. If you feel that they are, current insolvency guidance does provide for you to challenge the fees at Court, but I am sure that the Trustee will have sufficient records to demonstrate the time he has spent in dealing with your estate, which is relatively complex.

With regard to your final question, as your wife has a charge over the property then you cannot buy without her having an interest!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[m_j]

Good morning,
I can't buy the house unless the trustee and wife remove the charges.
My wife will remove the charge on the basis she doesn't lose her ability to fight the trustee for her share.
The trustee has to remove his charge for the new bank to give my solicitor the money.
My solicitor would be instructed to give trustee solicitor the money.
My mother will put a charge on the new property as she'd lend me the deposit.
My wife will not make a claim on the new property as she would not contribute towards the upkeep.
If she loses the case she'll have no choice but to go bankrupt as the trustee would come after her for his additional costs.
Trustee has stated that costs would not come from my estate regarding her claim.
It appears that her situation would be nullified once she lost the case and she would not be able to claim on the new property as it was bought by me after she went bankrupt. It would be classed as a completely new property!!
Would the last statement be correct???????????
Thanks for your help.

[MelanieGiles]

Hi

Again, you really need the benefit of proper legal advice here. If your wife removes her charge this does not mean that she cannot continue to claim an interest in the property, but you will need to agree with the Trustee that he recognises said interest.

The Trustee will only remove his restriction in the event that he is handed the money from the sale and purchase. This usually happens simultaneously.

I think the Trustee is correct about the award of costs. Regarding your last statement, are you buying the new property jointly or solely? If solely, with no financial assistance from your wife, she will not have a beneficial interest in this property, but could well acquire one over time if she continues to contribute to the running costs of your home.

Do you have legal representation? If not, I strongly recommend that you appoint someone to act for you, as this matter is complex and you need proper advice from someone qualified to review the paperwork and interact with your Trustee.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[m_j]

Hi Melanie,
I hope you are well and I would like to thank you for all your help.
I have spent a lot of time trying to find information that would help my family.
Could you let me know if any of the previous cases would help my wife in her claim as I assume previous cases influence a Judge's decision this Wednesday!!!!

STOKES V ANDERSON 1991
LLOYDS BANK V ROSSETT 1991
GRANT V EDWARDS 1986
EVES V EVES 1975
GISSING V GISSING 1971
PAVLOU 1993

I've found EX PARTE JAMES 1874, Would I be able to get a refund on the mortgage payments made after 1991?

I've had this sent to me by email.

Where a property is solely owned, the presumption is that it belongs to the
person in whose name it is registered. This is however far from the end of the
story. The question is whether there is a constructive or resulting trust in
favour of your wife. For example when you married in 1999 did you both at that
stage agree the property would become a jointly owned asset? Moreover has your
wife acquired an interest by way of constructive trust through making payments
towards the mortgage etc?

Insofar as concerns the work paid for by your wife to renovate the bathroom,
this will not ordinary give rise to a proprietary interest unless your wife
incurred this expenditure in the belief (relying upon your assurance or
inference) that by doing so she would acquire a share in the property - in which
case the equitable principle of proprietary estoppel may apply (see inter alia
Pettit -v- Pettit 1970).

In view of the information provided I suspect your wife does have an interest in
the property. Valuing this interest is impossible without full documentation
and information. As your wife did not contribute to the deposit upon purchase,
or towards the mortgage as at inception, it is likely her interest will be less
than 50% unless you can demonstrate that upon marriage the parties intention was
that the matrimonial home would then become a jointly owned asset.

I look forward to hearing from you.

Best wishes

[MelanieGiles]

Hi again mj

I am unable, and unqualified, to give you specific advice about your case, particularly with regard to the caselaw you have quoted.

Please get yourself a lawyer who can represent you properly at the hearing on Wednesday.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk