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My Ex Is Going Bankrupt Can I Lose My House?

Question:

Hi, I’ve just heard that my ex-husband is likely to go bankrupt. We separated five years ago but the divorce was only finalised three years ago. When we separated, I gave him what I considered to be his half of the equity in the marital home, minus £5000 which I had put into the house as a deposit. He owned another house with a friend, but I contributed to paying the mortgage on it, so he gave me £7000 to buy me out of that. My name was never on the mortgage for this second house, but his name was on the mortgage of our marital home.
In the end, I gave him £25,000 to buy him out of the marital home.

We didn’t have a consent order drawn up because my understanding was that this would not protect me from creditors coming after the equity in my house, should he go bankrupt.

1. Can his creditors come after the equity in my home, five years after we separated and three years after we divorced?
2. Would they accept the way we worked out the split of equity, as detailed above?
3. If the worst came to the worse and I had to give the creditors some of the equity, would they wait for me to sell the house or would they force a sale?

I would be very grateful for any advice you could give me on this matter as I am panicking that I’m going to lose my house and/or go bankrupt myself.

Answer:

As you previously stated that having a consent order would not protect you from his creditors coming after you if he went bankrupt is partially true in that if he goes bankrupt, any property he has owned, sold or transferred in the past few years will be looked at.

Your situation is a bit complicated in that it involves more then one property, who paid what, a divorce and the exchange of money for more than one property.

The OR/Trustee will look to see how the property was disposed of and what is any monies were made and then what was done with those proceeds.

Depending on the time-frame and also your ability to document the circumstances you maybe fine, but in the end it will be the OR/Trustee’s decision.

If for any reason the OR/Trustee felt your ex had an interest or owed some of any equity in a property and wanted it for the bankruptcy and it involved your property, they can give you the option to buy-out that interest they may have.

Thank you for letting me help you.

Jon

If you have a bankruptcy question you’d like to ask, just ask using this online form. All help is free.