Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

[michmar72]

Hello everyone

I am hoping for some help and advice please.

My boyfriend who I jointly own a house with was made bankrupt in September (VAT debt 102,000k).


It has got to the stage now that the trustee has contacted me to tell me how much equity it due to my boyfriends estate and asking me if I would like to make an offer and if so what the offer is.This is his only asset.


Our property has been valued at £230,000 and our outstanding mortgage redemption amount is £104,712.14 , the total equity is £125,250.00 and therefore his share is £62,625.00


I have also had the house valued, so I agree the valuation. I have spoken with our mortgage provider and in principle they are happy for me to take over the mortgage and can offer me additional borrowing up off up to just over £45,000. I have no means of raising any additional funds, this will have me at my limit. My boyfriend is self employed and I want to make sure that whatever I do , I can afford on just my wages, I work full time.


So my question is, do I go to the trustee with my one and final offer of £45,000 or is it a negotiation , can I/should I go in with a lower offer ? Does anyone know how the process works?


Also does anyone know as I can't offer the full equity, can they force the sale of the house?


Thanks in advance , I just don't want to do the wrong thing and cost myself more money. They want a reply by the 13th April


Michelle

[charitynjw]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hello everyone

I am hoping for some help and advice please.

My boyfriend who I jointly own a house with was made bankrupt in September (VAT debt 102,000k).


It has got to the stage now that the trustee has contacted me to tell me how much equity it due to my boyfriends estate and asking me if I would like to make an offer and if so what the offer is.This is his only asset.


Our property has been valued at £230,000 and our outstanding mortgage redemption amount is £104,712.14 , the total equity is £125,250.00 and therefore his share is £62,625.00


I have also had the house valued, so I agree the valuation. I have spoken with our mortgage provider and in principle they are happy for me to take over the mortgage and can offer me additional borrowing up off up to just over £45,000. I have no means of raising any additional funds, this will have me at my limit. My boyfriend is self employed and I want to make sure that whatever I do , I can afford on just my wages, I work full time.


So my question is, do I go to the trustee with my one and final offer of £45,000 or is it a negotiation , can I/should I go in with a lower offer ? Does anyone know how the process works?


Also does anyone know as I can't offer the full equity, can they force the sale of the house?


Thanks in advance , I just don't want to do the wrong thing and cost myself more money. They want a reply by the 13th April


Michelle

Hi Michelle & welcome to LB

Who evaluated the property?

If an estate agent, it could be 'inflated'.

Have you compared 'like-for-like' sales in your locale?

[michmar72]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hello

Thank you for your quick reply.

It was a local esate agents , I had it valued by them when my boyfriend was first made bankrupt 6 months ago and when they came to value the house on behalf of the trustee's recently they were going to value it higher but it seems we convinced them it had not increase.

Yes It is in line with similar houses in the area and property websites

Thanks you

Michelle

[charitynjw]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hello

Thank you for your quick reply.

It was a local esate agents , I had it valued by them when my boyfriend was first made bankrupt 6 months ago and when they came to value the house on behalf of the trustee's recently they were going to value it higher but it seems we convinced them it had not increase.

Yes It is in line with similar houses in the area and property websites

Thanks you

Michelle

http://www.which.co.uk/money/mortgag...eys-explained/

[michmar72]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hi

Thank you - I will have a read of that and see about getting a survey done.

Michelle

[Openlaw15]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hello everyone

I am hoping for some help and advice please.

My boyfriend who I jointly own a house with was made bankrupt in September (VAT debt 102,000k).


It has got to the stage now that the trustee has contacted me to tell me how much equity it due to my boyfriends estate and asking me if I would like to make an offer and if so what the offer is.This is his only asset.


Our property has been valued at £230,000 and our outstanding mortgage redemption amount is £104,712.14 , the total equity is £125,250.00 and therefore his share is £62,625.00


I have also had the house valued, so I agree the valuation. I have spoken with our mortgage provider and in principle they are happy for me to take over the mortgage and can offer me additional borrowing up off up to just over £45,000. I have no means of raising any additional funds, this will have me at my limit. My boyfriend is self employed and I want to make sure that whatever I do , I can afford on just my wages, I work full time.


So my question is, do I go to the trustee with my one and final offer of £45,000 or is it a negotiation , can I/should I go in with a lower offer ? Does anyone know how the process works?


Also does anyone know as I can't offer the full equity, can they force the sale of the house?


Thanks in advance , I just don't want to do the wrong thing and cost myself more money. They want a reply by the 13th April


Michelle

Hello Michelle

The property is in both your names, ie by deed. Is the trustee interested in sale of the property, if so, you do have rights to defend a sale of your property in your own right under law. For a beneficial joint tenancy before a share can be realised there must be a severance in writing to the address of your boyfriend. The main problem in my view is that the trustees interest (ie for said debt) in the property in monetary terms is 50% of the equity, ie it matches your 50%. How long have you and your boyfriend lived at the property, do you have any children, or there other factors to take into account that would put you in a worse off position were a sale to happen (ie mitigating circumstances)? You and the trustee can negotiate your boyfriend's beneficial interest until you come to a decision. This is your property so you have the right negotiate any value of an interest in it, ie your land/ buildings.

Alternatively, the Trustee under bankruptcy law only has 3 years to claim an interest in your property. You can defend this as aforesaid.

One other option is that you could ask the trustee to put a land charge on the property for whatever amount you negotiate (as above) with him/ her (the Trustee). This way you get to keep your property and the Trustee's interest is secure. A land charge basically means you cannot dispose of the property without paying off the charge's value. It will also accrue interest for the trustee over the years. The court is unlikely to permit a sale of the property whilst it still has security, ie its 25% equity (after taking away your boyfriend's beneficial interest). However, property prices are likely to rise thereby increasing the property's value.

[michmar72]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hello Openlaw15

Thank you for your reply.

We have lived at the property for 12 years, we have no children just a dog – Ican’t think of any mitigating circumstances other than I don’t know where elsewe would be able to live and I don’t think they care about that.

the trustees have already put a land charge on the property. When that arrivedI went to see a solicitor as I didn’t know if I should sign it and I paid alarger deposit when we bought the house but unfortunately did not get thiswritten up legally (stupid I know now) and I paid the mortgage for two yearswhilst my boyfriend was not working, I had hoped that both of these factorswould increase my equity share and the solicitor agreed that the trustees couldtake this into account.
When myboyfriend went for his meeting with the trustee, I went with him but I was notinvited to join them in the actual meeting, however she did have a quick chatwith me after as she knew I had some questions and I gave her this informationand any paperwork I could find that might prove this.

In the letter I have received now, the trustee enclosed the Transfer of theproperty and told me that the transfer is clear at paragraph 11, that thebankrupt and you hold the property on trust for yourselves as joint tenants andtherefore equal shares and on this basis I cannot claim a larger share.

I do not recall my boyfriend receiving a severance in writing but I will doublecheck with him.

The trustee has not mentioned a sale at this point just if I wanted to make anoffer and if so how much.

I have contacted the solicitor again to see if he thinks it’s worth me pursuingmy right to more equity using them but obviously I don’t want to throw money atsomething that may be pointless.
Thanks again

[Openlaw15]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hello Openlaw15

Thank you for your reply.

We have lived at the property for 12 years, we have no children just a dog – Ican’t think of any mitigating circumstances other than I don’t know where elsewe would be able to live and I don’t think they care about that.

the trustees have already put a land charge on the property. When that arrivedI went to see a solicitor as I didn’t know if I should sign it and I paid alarger deposit when we bought the house but unfortunately did not get thiswritten up legally (stupid I know now) and I paid the mortgage for two yearswhilst my boyfriend was not working, I had hoped that both of these factorswould increase my equity share and the solicitor agreed that the trustees couldtake this into account.
When myboyfriend went for his meeting with the trustee, I went with him but I was notinvited to join them in the actual meeting, however she did have a quick chatwith me after as she knew I had some questions and I gave her this informationand any paperwork I could find that might prove this.

In the letter I have received now, the trustee enclosed the Transfer of theproperty and told me that the transfer is clear at paragraph 11, that thebankrupt and you hold the property on trust for yourselves as joint tenants andtherefore equal shares and on this basis I cannot claim a larger share.

I do not recall my boyfriend receiving a severance in writing but I will doublecheck with him.

The trustee has not mentioned a sale at this point just if I wanted to make anoffer and if so how much.

I have contacted the solicitor again to see if he thinks it’s worth me pursuingmy right to more equity using them but obviously I don’t want to throw money atsomething that may be pointless.
Thanks again

Have a look at your property's land register and it will show if you have joint tenancy with equal shares. Nevertheless, the trustee is wrong as the law states there is a only a presumption that once the joint tenancy has been severed that the property is split 50/ 50. However you can rebut that presumption based on law, ie if you can prove you paid a bigger deposit, according to Lady Hale in a relevant case.

[michmar72]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Thank you both for your advice , following from your replies I have decided to go back to the solicitor and let them have a try with the trustees,spending a few hundred pounds could save me a few thousand in the long run.
Again thank you both for your time today.
Michelle

[meellis]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

One thing I found when dealing with my bankruptcy is to be firm with the trustees over the true value that could be released if a sale was forced Their job is to realise as many assets as possible for the creditors but always bear in mind the amount the property is worth if they forced a sale. To deal with things quickly they would have to maybe auction your home which would mean it would be sold cheaper (less equity), there would be legal costs to them and maybe something towards your relocation. They are duty bound to deal with things in a timely manner which means they can't hang around hoping for price increases. So the estate agents could value the property with £125,000 equity outright if sold on the open market but that might only be £80,000 if sold through an auction, then you might have £10,000 legal costs to subtract from that leaving £70,000. Of course these costs should only come from his half of the equity you shouldn't suffer that. These figures are only examples but you can see how there can be good arguments for a cheeky offer on his interest.

[michmar72]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Hi Meellis
Thank you for your reply, thats really interesting information and makes me feel a bit better to go in with a lower offer.
I hope it all worked out for you.
Michelle

[meellis]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

My parents paid £2000 for £28,000 equity 5 years ago. You maybe won't be as fortunate but you really need to be realistic about what they might receive after a lot of hassle /costs and sell them an offer based around this. Remember their intention is not to make you homeless but it is to realise as much for the creditor as possible and in a timely manner. When you make an offer base it around a realistic sale price ( not full market value), his half of the equity minus any costs incurred by you/them, and your extra interest you have in the property through the deposit and extra mortgage you have paid. Do as much research as you can to keep your legal costs down and calculate a real offer that is a low but realistic starting point, good luck.

[michmar72]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

HiMeellis

Thanks again for your advice, it makes me feel a bit more positive about the situation.

Can I ask did you negotiate yourself or did you use a solicitor?

Thank you

Michelle

[Openlaw15]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

HiMeellis

Thanks again for your advice, it makes me feel a bit more positive about the situation.

Can I ask did you negotiate yourself or did you use a solicitor?

Thank you

Michelle

Trustee powers: 1) negotiate a price for your partner's beneficial interest. 2) ask a court for order for sale, 3) ask a court for charging order on the property. Apparently they will only go down the charge route if there is no other means of getting a sale or 1) (above fails. Is it an actual trustee or official receiver you're dealing with? A trustee need not be a legal professional (ie solicitor) by the way. The only requirement is passing the relevant trustee course including exam. A solicitor may charge you lots but you may have the same result if you did it yourself. You could just email as part of your negotiations.

[meellis]

Re: Hello - Need Help With Making An Offer To Purchase Bankrupt's Share Of Property

Personally I made the offer but it was made apparent that the figure wasn't plucked from thin air but based around sound reasoning. My situation was different from yours in various ways, some beneficial but some more difficult. Home was a council right to buy that my parents bought with my help, then when we extended the mortgage and deeds were put solely in my name so I had a harder job proving their beneficial interest because there wasn't a contract between me and my parents to indicate this. That was the harder part the easier part for me was the smaller equity which made the argument about the costs involved out weighing the benefits for them. Costs do not increase at the rate of equity so if the equity is three times mine their costs wouldn't be three times hence it makes their attempt more worthwhile. remember though that you have far more evidence of interest than my parents did.