Sounds a bit off to me.
I would arrange to speak with one of the experts on here - I went with Mark's company and they have been very good - before you make a decision.

Hi Jaceath26

Please be very careful. I assume from the figures you mention, your house has a value of around £240k with mortgage of £180k. Is the house jointly owned and is the majority of debt just in your name. Could you give me a split?

I'm not sure how you in a trust deed with your partner not in one would help.

Mark

Mark

House is valued at £160000 with outstanding mortgage of £100000,house is in joint names debt is £17000 to me ,£15000 joint and £5000 in my partners name company suggested my partener goes bankrupt as she only earns £700 per month and I go into a trust deed can you help as I am getting very confused

I'd urge you to be very careful here, jaceath26. If you have £60k equity in your property then I don't see how you can both enter into insolvency procedures and not risk losing your home.

Are the firm that you spoke to suggesting that your partner nominate them to be the trustee in her bankruptcy too? How did they say this would work exactly - would she not have a contribution to make at all?

Hi Kevin they suggested my partener entered sequstation (I think this is how it is spelt) and would not have to make any payments,they would do a survey on the property and do something called 75% loan to value which would mean there was no equity shown on the property

But presumably they would not therefore be dealing with the sequestration themselves - if they are saying that your partner cannot afford a contribution and would have no equity then how would they cover their costs?

I think you should ask them specifically whether they are agreeing to be nominated as your partner's trustee in the sequestration, as if they are not then they cannot possibly give any assurances to her that the property would be safe. It would be up to the Accountant in Bankruptcy (or an agent on their behalf) to decide. There is absolutely no reason to suppose that the Accountant in Bankruptcy would use a 75% valuation and in fact I'd be very surprised if they did.

Please get a second opinion on this before you agree to anything, jaceath26, as I have a feeling that you might really regret it if you don't.

OK thank you very much for your help I will seek more advice

please please meet with one or more of the companies represented here. If you have a large amount of equity as you seem to, it is necessary for that amount to be paid in some way to the benefit of paying your debts. It is harder and harder to do that by re-mortgaging or secured(any) loans and you might be asked to have family pay it, sell the property or have extended payments.

Having said the above, it may not be worth what you've estimated, lots of areas have seen continued falling prices and lots of properties sold quickly don't achieve anything close to what they're 'worth'

A friend gave up a property she'd paid £120,000 after it was valued at £95,000 when she entered sequestration. It was then sold by the lender for £55,000.

Take your time to better understand what can be done and how each solution will affect you both.

Hello jaceath26.

You'll have noticed several very diplomatic warnings from various people in this thread.

I'll do my best to be diplomatic. A "75% loan to value" survey sounds like a dangerous sales pitch.

I really could say a lot more. Go careful.

TDA sums it up nicely. Sign here and we promise to under value your house so there isnt enough equity. Until they decide to revalue the property and you end up having to find a large sum or sell up.

Walk away and discuss your options with somebody who doesnt wear a stetson and ride a horse.

Paul

Hi jaceath26,

As an agent for the Accountant in Bankruptcy we administer Sequestrations on their behalf so can speak first hand of the method used to calculate equity.

I can confirm that we would not use the 75% loan to value to calculate the level of equity within your property. We would obtain a valuation and a redemption figure and would look for all or as much of her share of the available equity. If this is for example £30,000 based on your figures then we would have to seriously consider the sale of your house. Please be very careful when considering what options to proceed with.

In terms of not having to make a contribution as your partner only earns £700 per month it is not correct to base it on this. We would carry out a thorough income and expenditure and if it was deemed that your partner could afford a payment then she would be required to pay a contribution. This can be as low as £40 per month for 3 years so even with a low income, it is still possible she may be asked to make a contribution.

As Kevin said, unless the firm are going to act as Trustee in your partners Sequestration then you need to be careful on how you proceed. If they advise you on how they "think" things might work in a Sequestration, this can be completely different from how they actually work and can risk your property.

As RBSD pointed out, many people sometimes over estimate the value of their house. I would speak with one or two local estate agents and ask them for the worst case scenario of what your property would sell for and also obtain a redemption figure from your mortgage company. If you could let us know, when can then provide you with more accurate information on what options to consider.

Just doing the maths here. Putting aside the validity or otherwise of using a valuation that is only 75% of the actual value - surely 75% of £160k is £120k anyway/ So there would still be £20k equity to account for... Are they saying that their firm and/or the Accountant in Bankruptcy would ignore this too?

Ermmm... I'm not sure this firm would be handling the trust deed at all.

They pass their Trust Deeds referrals to AG Taggart Insolvency Practitioners who operate from the same address. Interesting!

Mark