Can a house sale be forced?

[MinesGT]

My father (now 76) has been a director of a company which went into liquidation. Unfortunately his Directors Loan Account (DLA) was overwdrawn to the tune of £30k.

The liquidators have now approached him to recover this amount. He has no savings, and is currently on a state pension. His only asset is his house.

To obtain a quick sale, the house would probably realise around £65k. He does not have a controlling equity in his house. His brother in law owns 50%, my mother 25%, and the remaining 25% my mothers. (The deeds are in my mothers and fathers name only).

With his share being £16k, and being a minority stake, and the total debt being £30k (still leaving a £14k shortfall), he has offered the practitioners a settlement of £300 (50% of what he has in his current account)would or could he be forced to sell his home?

cheers

[Sarnie]

So does your mother own 50%? (you have said she owns 25% and then 25% again)

Are you saying that your father has offered £300 to pay off a £30,000 debt??

Is the property security for the DLA?

[jeff m]

I have a friend in a similar position in UK, partership though.
His position appears to be, (as it is not polite to interrogate someone in the toilet so to speak), the house is safe until they sell, then they can get their claws into his share. 50% in his case.

It does depend on the legal help. Someone I knew quite well in the States lost the lot when he fell foul of the Preferential Payment law, got bad advice and is now driving a truck. He owed me at the time. Still does I suppose

[auditt]

Cant they press for a order of sale?

[MinesGT]

Hi

Sorry, my bad explanation, my father owns 25%, my mother owns 25% and her brother owns 50%.

Yes, he has offered £300 against £30,000. THis is on the basis that he does not have controlling equity in his house, therefore unable to sell (his brother in law refuses to buy his equity or to put the property up for sale). The £300 (although not much) is half of his savings.

The property has not been used as security for the DLA.

cheers

[Welshbeef]

Sorry £300 to pay off a £39k debt ... Where is the morals?
Yes he may only have £300 but he's married they should do the decent thing and pay.

The creditors are due the full funds. They could be in exactly the same situation and lose their house due to this man. Why is that fair?

Really annoys me when people and companys fail to pay what they owe.

[Dave9]

i'd have thought so but that's just my opinion

[Allanv]

This thread may just answer the thread I just posted. I will watch both.

[MinesGT]

I hear what you are saying, but to be fair, the creditors will probably not see a penny, as it will be swallowed up in liquidators fee's.........believe me, i have seen what they charge (morals?).

I appreciate people have their opinions, but unfortunately it does not answer the question....

[Deva Link]

MinesGT said:

His brother in law owns 50%, my mother 25%, and the remaining 25% my fathers. (The deeds are in my mothers and fathers name only).

(corrected ownership shares)

Was the 50% to BIL a recent thing, by any chance?

Are they paying him rent and is he is contributing towards the maintenance of the property?

[MinesGT]

No, this was not recent. It was an agreement when they purchased the property nearly 20 years ago, before the business was formed. They also had the agreement formalised through a solicitor at the time as well.

As far as i know, they do not pay rent. however they do all property maintenance and updates/modernisation.

May not be a conventional setup, but that is the way it is im afraid.

[auditt]

Welshbeef said:

Sorry £300 to pay off a £39k debt ... Where is the morals?
Yes he may only have £300 but he's married they should do the decent thing and pay.

The creditors are due the full funds. They could be in exactly the same situation and lose their house due to this man. Why is that fair?

Really annoys me when people and companys fail to pay what they owe.

Mr ramsey company owes 18 million but you still see him doing an extention of his house, offloading staff and driving his new black 458 ferrari.

[Welshbeef]

auditt said:

Welshbeef said:

Sorry £300 to pay off a £39k debt ... Where is the morals?
Yes he may only have £300 but he's married they should do the decent thing and pay.

The creditors are due the full funds. They could be in exactly the same situation and lose their house due to this man. Why is that fair?

Really annoys me when people and companys fail to pay what they owe.

Mr ramsey company owes 18 million but you still see him doing an extention of his house, offloading staff and driving his new black 458 ferrari.

subtle difference he is not defaulting on the debt that will be repaid. Whereas this scenario he owes x yet is offering 1% of it's total...

Note if your assuming company debt any comp debt is the same as this scenario your mistaken. This company is finished yet owes payment who loses out those suppliers they may lose their own homes due to this yet he gets away with £300 payment.. Immoral wrong unfair hope he never does any business again.

[MinesGT]

Welshbeef said:

auditt said:

Welshbeef said:

Sorry £300 to pay off a £39k debt ... Where is the morals?
Yes he may only have £300 but he's married they should do the decent thing and pay.

The creditors are due the full funds. They could be in exactly the same situation and lose their house due to this man. Why is that fair?

Really annoys me when people and companys fail to pay what they owe.

Mr ramsey company owes 18 million but you still see him doing an extention of his house, offloading staff and driving his new black 458 ferrari.

subtle difference he is not defaulting on the debt that will be repaid. Whereas this scenario he owes x yet is offering 1% of it's total...

Note if your assuming company debt any comp debt is the same as this scenario your mistaken. This company is finished yet owes payment who loses out those suppliers they may lose their own homes due to this yet he gets away with £300 payment.. Immoral wrong unfair hope he never does any business again.

As previously stated, it is highly unlikely the creditors will see any of the money he may be able to pay, even if he does sell his own home, as it will be swallowed up in liquidators fee's. Just like the bank which charged the company nearly £33k in "agreement cancellation" fee's.

Stop the vultures, and creditors may actually see something......

By the way, any chance the original question may be answered ?

[James P]

MinesGT said:

Welshbeef said:

auditt said:

Welshbeef said:

Sorry £300 to pay off a £39k debt ... Where is the morals?
Yes he may only have £300 but he's married they should do the decent thing and pay.

The creditors are due the full funds. They could be in exactly the same situation and lose their house due to this man. Why is that fair?

Really annoys me when people and companys fail to pay what they owe.

Mr ramsey company owes 18 million but you still see him doing an extention of his house, offloading staff and driving his new black 458 ferrari.

subtle difference he is not defaulting on the debt that will be repaid. Whereas this scenario he owes x yet is offering 1% of it's total...

Note if your assuming company debt any comp debt is the same as this scenario your mistaken. This company is finished yet owes payment who loses out those suppliers they may lose their own homes due to this yet he gets away with £300 payment.. Immoral wrong unfair hope he never does any business again.

As previously stated, it is highly unlikely the creditors will see any of the money he may be able to pay, even if he does sell his own home, as it will be swallowed up in liquidators fee's. Just like the bank which charged the company nearly £33k in "agreement cancellation" fee's.

Stop the vultures, and creditors may actually see something......

By the way, any chance the original question may be answered ?

I will give it a go if you want to hear from a "vulture"

The liquidator of the company is obliged to realise the assets for the benefit of the creditors of the company. One of those assets is the overdrawn loan account of £30k.

While the liquidator has the power to compromise the debt (ie accept only part payment), an offer of £300 to pay a £30k liability is derisory. Is there no way that the fmaily can come together and offer something the liquidator is likely to accept?

If not then the liquidator can pursue your father and that may include obtaining judgement for the debt, obtaining an interim/ final charging order over his interest in the property or as a last resort seeking a bankruptcy order.

A charging order would secure the debt over his share of the property. It would not force the sale of the property and when the property was sold if there was not enough available to pay the debt in full then the balance is simply unsecured.

A trustee in bankruptcy would have the power to seek the sale of the property but, as your father has only a 25% interest in the property, the Court may not make the order. The problem there is that no one knows what order will be made until you get to Court. The trustee may question how the BIL owns 50% but is not named on the deeds, dated evidence of his interest being acquired would be needed.

To summarise. The answer to your question is a qualified yes but only as a last resort and after a bankruptcy order has been made.

As an aside, people offering £300 to settle a £30k liability is part of the reason why returns from insolvencies are often low. People have this idea that there is no need to pay debts owed to insolvent companies and forget that making the liquidator spend time dealing with unrealistic offers simply adds to the costs. [/soapbox]