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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25426
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I have defaulted on a mortgage property abroad (in the

Resolved Question:

I have defaulted on a mortgage for a property abroad (in the EU).

I have not had any action against me as yet but I think that the bank in question is likely to chase me in the UK with a European Enforcement Order.

In the meantime, I inherited some money from an Aunt but made a deed of change in the will so this money passed to a cousin instead of me.

The cousin has agreed to buy me a house (with the money that would have been left to me). However, to avoid any possible action by the bank and them getting hold of the asset the house will be legally purchased and owned by my cousin.

However, I want a private and binding legal agreement in place between me and my cousin that shows me as the beneficial owner/tenant.

The agreement will not be registered anywhere in public and will be lodged at a solicitors.

Question: Is it possible to make an agreement that will be binding, watertight and hold up legally so the cousin can NEVER make any claim on the property whatsoever in the future?

Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.

May I ask when you disclaimed your inheritance by deed please?
Am I correct to assume that your cousin is prepared to cooperate with the above?
Customer: replied 2 years ago.

It was disclaimed in Jan 2014 and my cousin is fully prepared and happy to cooperate.

Expert:  Joshua replied 2 years ago.
Thank you. Finally from what you say could it be shown that you were technically insolvent at the time you disclaimed the property - i.e. owed more debt than had assets - at that time?
Customer: replied 2 years ago.

Do you mean disclaimed the money?

Expert:  Joshua replied 2 years ago.
Yes - sorry I use the word property in terms of "assets" generally. Apologies for any confusion...
Customer: replied 2 years ago.

I stopped paying the mortgage on the property abroad around Nov 2012. The bank sent a letter saying they were withdrawing the loan around Jan 2013 and would be taking legal action. (Have heard nothing since). I disclaimed the money in Dec 2013.

I don't own a house (I rent) and I only have an income of 20k per annum. I have no other assets (my car is worth about 3k).

If you take into account the house abroad and include this debt then I would have been insolvent when I disclaimed. However, there was NO action or proceedings against me at the time.

Expert:  Joshua replied 2 years ago.
Thank you. Based on what you say you are likely to want to consider an assett protection trust. This is a type of trust that gives you a discretionary right to either income and/or use of trust assets together with a discretionary power to appoint capital out of the trust to you absolutely.
The advantage of these trusts is that you do not own the assets in the trust - rather you just have a personal right to use them or receive the income from. This is of no value to anyone but you so there is nothing for creditors to claim and since you do not own the assets there is nothing to seize.
After you are safe from enforcement action (6 years under the Limitation Act) the assets can be transferred to you absolutely if you wish and the trust dispensed with. A solicitor can prepare such a trust for you normally for around £500-700 + VAT.
However based on what you say there is a potential weakness. Because you were entitled to the assets under the will and disclaimed them, if you are made bankrupt by your creditors, the Insolvency Act allows for your trustee in bankruptcy to look back up to 5 years. If he can show that you gave away or disclaimed assets within this 5 year period knowing that you were insolvent at the time, he can make an application for the assets thatwere given away or disclaimed to be reclaimed and transferred to him. The law provides that he can go back up to 2 years and all he needs to show is that they were given away or disclaimed but he can go back up to 5 years but beyond 2 years he must show that you knew you were insolvent at the time you disclaimed or gave away assets.
Accordingly if this were to occur and it is only relevant under bankruptcy conditions, the above trust can be unpicked because the source of the assets that entered trust can be attached under the Insolvency Act as above.
I hope the above is of assistance? If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today or just reply back to let me know if the above is helpful. Your feedback is important to me. If there is anything else I can help with please reply back to me I'd be very grateful
Customer: replied 2 years ago.

would I have technically been insolvent if no action was actually underway?

Expert:  Joshua replied 2 years ago.
I do apologise for the delay in reverting to you over the bank holiday weekend. The rules set out in legislation provide that one is defined as insolvent if one is unable to pay his debts as they fall due, or if the value of his assets is less than the amount of his liabilities, taking into account his contingent and prospective liabilities. The circumstances you describe would appear to fit this definition so you will likely need to be mindful of the above insolvency provisions when considering how you may wish to proceed.If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though
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