Hi bettertoburnout

It's not quite as simple for the trustee to base this on a 'you transferred the property' argument.

The basics are wrong from what you say, if the argument is that the £50k is being sought as the alienated sum. I dont want to over complicate matters as the finer detail is very important, but the alienation will form one or two points:

ONE - You obtained £50k and gave this to your wife who spent this.

They will then need to seek 'other redress' ie an action against your wife to recover the £50k or

TWO - to restore the property back into the position before the 'alienation'. However this will be impossible if you obtained £50k and then a security was granted. In these circumstrances adequate consideration was made ie the value is reduced by £50k, but £50k was validly obtained and secured.

Then we come to who received the funds, if the debts were all yours and paid off and this can be shown, then there is no alienation. Then there is the solvency argument, did you pay off all your debts with the funds and have little or no debt left?

Its a bit of a complex area and is certainly not as cut and dried as your trustee is making out.

Mark

HI MARK,THANKS FOR RAPID RESPONSE!
YES,ALL THE 50K WAS USED TO PAY OFF MY DEBTS,THIS WAS ALL PROVED TO THE ADMINISTRATORS.NONE OF IT WENT TO MY WIFE.I HAD A SMALL AMOUNT OF DEBT AFTER THIS BUT I WAS NOT INSOLVENT AS FAR I RECALL(I AM CHECKING BACK THE RECORDS TODAY).I BELIEVE FROM READING THE INSOLVENCY ACT THAT IF I WAS SOLVENT AT THE TIME, OR SINCE,THEN THERE WAS NO ALIENATION.

Hi bettertoburnout

There are several defences, however the basis of the alienation, from the information provided, is critically flawed.

If you can demonstrate solvency for one day at any point AFTER the remortgaging, then this would effectively kill any challenge.

Mark

Hi Mark,I have done a quick check on the solvency issue;the debts were approx. £72,000.Adding up the house equity (valuation less mortgage),plus cash from remortgage,this makes £83,000.If I add in cash and assets from my self employment business at the time it will be over £100,000.Do you think these calculations are ok,or can the administrators dispute equity etc?

Hi bettertoburnout

It is the time which is critical.

You need to show that you were solvent for even one day AFTER the property was remortgaged and put in joint nmaes. So you will need to calculate the debt and asset position after this.

Mark

Remember too that after the property was transferred into joint names only half of the equity was then yours, bettertoburnout.

So did you clear £50k of the £72k debts when the funds were released, ie reduced the unsecured debt to £22k?

there was a small gap between receiving the cash from the remortgage and paying off the debts,(about 2 weeks).for those 2 weeks I had debts of about £72000 and cash of £50,000.I have used that period in time to refute the alienation,but I am concerned now that you state I can only use half the equity in my solvency calculation.I have received a letter today from the trustee saying they want the full amount of the alienation with no negotiation.My wife and I are distraught as the only way to raise this much would be to give hem the house,and even then the equity in it would not cover what they are looking for.

Hi bettertoburnout

Any idea what the equity in the house was at that point ie after the remortgage.

Mark

hi,equity was about £25,000.I reckon on assets of about £30,000 in my business at the time,but hard to be exact as accounts were made up to december,(1 month after the transfer date).I'm worried they start dis-allowing things I have counted on as assets in an attempt to prove the alienation.

Hi bettertoburnout

If things are stripped down, then the debts were approx £72k. You had £50k cash and therefore that leaves approx £22k net debts. The equity, I assume, as your half share is £12,500 and therefore the debts are reduced to £9,500 and you have an interest in the business which appears to exceed this figure.

On the basis of the above, I think it unlikely that a Trustee could prove insolvency. The onus is on you to show solvency and if you can back this up with figures, the Trustee needs to be sure he can disprove it. It's not as simple as him dismissing things.

Mark

Bettertoburnout, great advice from Mark ! I am in a similar situation so understand your worries . Rest assured any advice given here is first class. I would be happy to share information on my case on the forum if that would help you and others.[8D]

Thanks for all the help and advice,I have had better,clearer service here than from anywhere else.I have sent off my figures to the trustees so when I receive a reply I will let you all know how I get on.Thanks again

Hi bettertoburnout

From a case i dealt with a while back, legally it is up to the individual to prove solvency as opposed to the Trustee proving insolvency. Kinda the opposite of Scots Law in some ways as its normally the other way about.

Please keep me posted.

Mark

Hi Mark,the trustees have replied asking for a breakdown of personal and business debts.This will be difficult to do as I was self employed and used my personal cards mostly for business.I'm not sure why they want this separation,any thought on the matter would be appreciated.