Mary Leigh
Registered User
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What Mortgage balance is used to determine positive equity. The value at the date of bankrupcy or the value 3 years later?
Spouse bankrupt. House in positive equity. How is OA's interest valued?
- Thread starter Mary Leigh
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Brendan Burgess
Founder
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Hi Mary
You need to give more information.
When you went bankrupt, you lost ownership of the family home. It now rests with the Official Assignee.
You also lost any obligation to pay the mortgage.
If you continued to pay the mortgage, the lender may well be happy and not take any action.
However, you don't own your house anymore.
Brendan
You need to give more information.
When you went bankrupt, you lost ownership of the family home. It now rests with the Official Assignee.
You also lost any obligation to pay the mortgage.
If you continued to pay the mortgage, the lender may well be happy and not take any action.
However, you don't own your house anymore.
Brendan
Mary Leigh
Registered User
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I am the spose 50percent ownership. Mortgage being paid. Qa looking fir equity but calculating from the mortgage value left at the end of 3 years .
Brendan Burgess
Founder
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The Official Assignee owns half of the house.
At any time, the value of his stake is the value of the house less the mortgage outstanding.
That is why spouses are advised to buy the other half as quickly as possible to make sure that they are not paying down the mortgage and also so that the price does not go up.
Brendan
At any time, the value of his stake is the value of the house less the mortgage outstanding.
That is why spouses are advised to buy the other half as quickly as possible to make sure that they are not paying down the mortgage and also so that the price does not go up.
Brendan
Mary Leigh
Registered User
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Seems very unfair thanks
Brendan Burgess
Founder
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Why did you not try to buy the house when your husband was declared bankrupt?
Brendan
Mary Leigh
Registered User
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To be honest we were not advised and it was not stressed as an issue at all. i suppose and at the time there wasnt much equity in it, plus we were both working for ourselves and unemployed. We certainly were not in a position to spend money. We were always told the family home would be at risk worse case scenario. I obviously know now it wasnt.
Jim Stafford
Registered User
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The current practice of the OA is not to deal with the family home until 2.5 years into the process. (He has 3 years to seek an order for sale of the family home.) He deducts the current mortgage from the market value to arrive at the equity. He feels justified in deducting the current mortgage as he would have allowed the bankrupt to make "reasonable" mortgage payments on it during the bankruptcy process.
Jim Stafford
Jim Stafford
The OA will be looking at today's figures for 1) the value of the house, 2) the amount of the outstanding mortgage. Mary is responsible for the entire mortgage as she is not bankrupt. Mary also owns 50%, maybe more, of the positive equity (house value minus outstanding mortgage). The Official Assignee owns the other 50%, maybe slightly less, of the positive equity, and is now trying to get a "few bob" for it. The following comes from the Insolvency Service of Ireland website ( [broken link removed] ):
How will bankruptcy affect your family home
You should be aware that bankruptcy can result in the loss of your home. Serious consideration should be given to this fact when considering bankruptcy. You should always seek to obtain independent professional advice before entering the bankruptcy process. Under the Bankruptcy (Amendment) Act 2015, enacted in January 2016, the Official Assignee (OA) now has a three year period from the date of adjudication to monitor the valuation of your family home to decide whether it is negative or positive equity. The Official Assignee having valued your family home will write out to you six months before the three year period elapses and inform you whether he believes your property is in positive or negative equity.
The policy of the OA is to sell his interest in family homes in positive equity to the bankrupt, once the purchase funds are proven not to be the bankrupt's/discharged bankrupt's. Alternatively, he will sell his interest to the bankrupt's spouse/civil partner. The OA will accept staged payments for up to a maximum of 12 months and on final payment will transfer his interest to the bankrupt or their spouse/civil partner. If the bankrupt or spouse/civil partner is unwilling or unable to purchase the Official Assignee's share, he will apply to the Court for permission to sell the home on the open market. It should be noted that the Official Assignee, is not entitled to sell your estate or interest in your home, without an order of the High Court under section 61(4) of the Act.
If your interest in your family home is in negative equity and the Official Assignee has not issued proceedings seeking sale of the family home within 3 years of the date of adjudication of bankruptcy, the family home may re-vest in you, subject to any existing mortgage. If you do not wish the property to re-vest in your name, you should communicate that to the Official Assignee in writing.
So what should Mary do?
1) Keep a close eye on dates. The OA has three years from the date of her husband's adjudication order to "issue proceedings seeking sale". The OA may be out of time in which case the OA's interest in the house may have automatically re-vested in Mary's husband.
2) If the 3 years haven't elapsed Mary should consider doing a deal with the OA. Bear in mind that the OA needs a High Court order if he wants to sell Mary's house. And High Court orders are expensive with no guarantee of the outcome. In the circumstances, the OA might look favourably on an offer of €5,000 or €10,000 from Mary for the OA's interest in the house. If the offer is accepted Mary then owns 100% of the positive equity and is solely responsible for the outstanding mortgage.
How will bankruptcy affect your family home
You should be aware that bankruptcy can result in the loss of your home. Serious consideration should be given to this fact when considering bankruptcy. You should always seek to obtain independent professional advice before entering the bankruptcy process. Under the Bankruptcy (Amendment) Act 2015, enacted in January 2016, the Official Assignee (OA) now has a three year period from the date of adjudication to monitor the valuation of your family home to decide whether it is negative or positive equity. The Official Assignee having valued your family home will write out to you six months before the three year period elapses and inform you whether he believes your property is in positive or negative equity.
The policy of the OA is to sell his interest in family homes in positive equity to the bankrupt, once the purchase funds are proven not to be the bankrupt's/discharged bankrupt's. Alternatively, he will sell his interest to the bankrupt's spouse/civil partner. The OA will accept staged payments for up to a maximum of 12 months and on final payment will transfer his interest to the bankrupt or their spouse/civil partner. If the bankrupt or spouse/civil partner is unwilling or unable to purchase the Official Assignee's share, he will apply to the Court for permission to sell the home on the open market. It should be noted that the Official Assignee, is not entitled to sell your estate or interest in your home, without an order of the High Court under section 61(4) of the Act.
If your interest in your family home is in negative equity and the Official Assignee has not issued proceedings seeking sale of the family home within 3 years of the date of adjudication of bankruptcy, the family home may re-vest in you, subject to any existing mortgage. If you do not wish the property to re-vest in your name, you should communicate that to the Official Assignee in writing.
So what should Mary do?
1) Keep a close eye on dates. The OA has three years from the date of her husband's adjudication order to "issue proceedings seeking sale". The OA may be out of time in which case the OA's interest in the house may have automatically re-vested in Mary's husband.
2) If the 3 years haven't elapsed Mary should consider doing a deal with the OA. Bear in mind that the OA needs a High Court order if he wants to sell Mary's house. And High Court orders are expensive with no guarantee of the outcome. In the circumstances, the OA might look favourably on an offer of €5,000 or €10,000 from Mary for the OA's interest in the house. If the offer is accepted Mary then owns 100% of the positive equity and is solely responsible for the outstanding mortgage.
Mary Leigh
Registered User
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- 5
Is there any help for spouse to raise funds. Can i top up a nortgage? I wont be able to raise equity they are looking for easily. Some articles saying 2 years to pay qa others saying 1 year. Anyone explain realisation fee? Will he deduct 15percent?