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Can I Buy My Mother’s House If She Goes Bankrupt?
Question:
Buying house from mother who might become bankrupt
I am buying a house from my mother which is ready to sign for. She is in quite a lot of debt and bankruptcy might be on the cards. I am taking over the amount owing on the mortgage but house is worth approx £35k more than purchase price. If she did go bankrupt would they come after the difference in purchase and value price?
Answer:
Yes, if she was to go bankrupt any equity in the property, the difference between the valuation and what is owed, would be considered an asset and could be wanted to be paid into the bankruptcy.
The Trustee in her bankruptcy could allow you or a family member to buy-out that equity and pay it into the bankruptcy, giving you an interest in the property.
If she is to go bankrupt, it may be best to wait until she has done this and then inquire with the Trustee handling her bankruptcy as to if you can assist with the property.
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Source: Can I Buy My Mother’s House If She Goes Bankrupt?