Hi Foxtricking and welcome.

In terms of the equity in your home, and any prenuptial agreement, the key point will be to confirm with any potential trustee who you might appoint to handle your case exactly what will happen regarding the property and your equity. You should get this in writing before going ahead.

I guess one potential issue is that it sounds like you're joint owners of the home? As far as I'm aware a prenuptial agreement doesn't always determine ownership necessarily, rather it might determine what would happen to the things you both/each own in the event that you separated. Such an agreement can also be challenged in certain circumstances if a separation actually took place. Having said that, you'll know what's in your prenuptial agreement and may wish to seek your own legal advice if you want to know exactly what it means in terms of who owns what now.

A trust deed would be completed if a trustee collected in enough money to fully repay your debts, some interest on the debts, and their own costs and fees. These funds could come from regular payments or from the sale of assets.

We cannot advise you whether it's right for you to stop paying your creditors now. Rather, we'd strongly advise you to seek professional help with the debts ASAP (if you haven't already) so that you know what your options are and you have clarity about the situation with your home. Your adviser will then be in a position to advise whether it's appropriate to cease paying your creditors directly.

We are now separated, and no one is staying in the house.

The prenupt states that a capital sum would be due to my ex-wife in event of the sale of the property. If the proceeds do not cover the amount there is no further action.

So would a trust deed supersede this?

Hi Foxtricking.

Can you advise when the agreement was made? Unfortunately it is not as simple as stating whether one supercedes the other as it is dependent on a number of factors including when the agreement was made and if you were insolvent at the making of the agreement.

As TDA advises it would be best to contact the Insolvency Practitioner who you are considering to be your Trustee and to run over the issues with him/her. In the interim, whilst it is against forum rules to post a link, you may want to do a search for section 100 of the Bankruptcy Scotland Act 2016 which considers such matters.

I'll be interested to read Kevin or David's views on this when they next visit the forum Foxtricking.

Just to confirm though please (because it will help them):

1 - The house is jointly owned?

2 - The prenuptial agreement states what would happen if the house is sold?

3 - The house hasn't yet been sold?

My comments from before still apply. Irrespective of what might be written here, you'd want everything about this unique situation covered fully in writing by a potential trustee before you go ahead and commit yourself.

Trustees might form different views according to when and why the prenuptial agreement was put in place for example. If you could provide more information about these two questions it would also be useful.

Hi Foxtricking. I must admit that I haven't come across this particular scenario, so I think this might be one of those where I would ask for a copy of the agreement and then seek legal opinion. Have you spoken to an insolvency practitioner about this yet?

I suspect that Voice of Reason makes a relevant point when highlighting the importance of your circumstances at the time of the agreement and the reasons for it being made. Did your ex-wife contribute the majority of the deposit when the house was being bought?

Hi foxtricking,

I’m in the same boat as Kevin as I haven’t actually dealt with this type of scenario before. As Kevin advised I would obtain a copy of all of the paperwork in relation to the agreement and then speak with a solicitor regarding the matter.

In terms of proceeding with a Trust Deed I would urge caution until someone i.e. a Trustee has fully explored the scenario legally. I’ve recently dealt with a case whereby 2 companies told a client something in relation to an asset and upon investigation and seeking legal option turned out to be incorrect. There was no face to face meeting with the client, it was all done over the telephone. I think something like this it’s important to try and do everything face to face.

In situations like this it’s always best to take your time, explore all of the options and then receive in writing the exact position regarding a Trust Deed and the implications of this.

Let’s look at it in a hypothetical scenario that the agreement is valid - I’m not saying that it is or isn’t but just trying to paint a picture for you to think about.

Value: £165k
Less Mortgage: £55,000
Less: Prenupt: £70,000

Total Equity: £40,000

Your half share: £20,000

Would you be prepared to lose your £20,000 share towards the Trust Deed?

The worst case scenario that I could see is that the agreement is challengeable and under a Trust Deed or Sequestration a Trustee decides to challenge this to try and obtain more funds. Again, I’m not saying that this will happen, It’s just hypothetical.

I don’t think the forum will be able to give you a specific answer in relation to this. It’s going to take speaking with an Expert directly and then that Expert seeking legal option on the matter and coming back to you in writing.

The most important thing is to take your time and whatever agreement you make with a Trustee be sure that it’s all confirmed in writing.