Bankruptcy Advice

[turbotoys]

Husband and wife. Husband has to declare himself bankrupt. Wife has a property solely in her name. They are both Director's of the same company. Will husbands bankruptcy affect wife's house? CAB are unsure as they think there could be a beneficial interest due to them being Director's of the same company.

Any advice would be great!

[tuskkev]

Hi
You say they are both directors so I'm guessing it is a limited company.
As far as I am aware they can't touch the house if it is in the wife's name only. You say he is going bankrupt, what is happening to the company is it going to continue to trade with the wife as the sole director or are they winding it up?(can't be a company director while bankrupt)
The only problem might come if the AR can prove that any of the husbands income/savings has gone towards the morgate/bills or general up keep of the house and they decide they want that money back this will depend very much on the amount of the bankruptcy and the AR you end up dealing with, all I can say is if you get a good one they can be very very helpful if you get a jobs worth it won't be fun!
kev

[DavidHM]

turbotoys said:

Husband and wife. Husband has to declare himself bankrupt. Wife has a property solely in her name. They are both Director's of the same company. Will husbands bankruptcy affect wife's house? CAB are unsure as they think there could be a beneficial interest due to them being Director's of the same company.

Any advice would be great!

Not an insolvency lawyer but my two penn'orth (really not worth much more):

No beneficial interest because of the directorship; however the husband may be entitled to a share of the property or there may have been a disposal at an undervalue to a connected person within the last five years. In those circumstances, husband's trustee in bankruptcy may be interested in recovering this amount for the creditors.

Are the debts business related? Presumably they are or we wouldn't be talking about the directorship at all. In those circumstances, have the creditors really only sought personal guarantees from the one director? (Quite possible if the debts predate the wife's appointment to the board). Even if the wife is able to satisfy "her" share of the debts from other assets, there may be joint and several liability however.