Question: My husband and I separated some time ago but never got round to a divorce. Now he tells me that his business is in trouble and he might be bankrupt before the year is out.
© Merrily Harpur
He says I need to get the house transferred into my name as quickly as possible but, quite typically, isn't prepared to pay for it. We have two young children and the mortgage is paid up to date. Surely the needs of my family will come first? Do I really need to do what he says?
Answer: If your husband is really in financial difficulty, then you do need to act quickly in order to save your family home, as payment of commercial debt always takes priority over the needs of a family when a debtor's money is tied up in the family home.
The best you can hope is that the trustee in bankruptcy will grant you a reprieve of one year to enable you to get alternative living arrangements sorted out, although this is a discretionary decision for them. The trustee in bankruptcy steps into your husband's financial shoes and so will have a claim over his share of the family home, which will be assumed to be 50 per cent in the absence of formal written evidence stating otherwise, for example a declaration of trust.
You could try to raise money to buy out your husband's share of the house, or face a forced sale. Or you could seek a property adjustment order in your favour as part of a formal divorce settlement.
A voluntary transfer of the house into your name would not be sufficient as the trustee in bankruptcy could reverse that. It could be a race against the clock to get your financial house in order before a petition for bankruptcy is served.
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Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.