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Legally, if a party gifts away property/assets or puts it into a Trust for the benefit of a third party, and is then made bankrupt within 5 years from the date of the transaction, the Trustee in Bankruptcy can try and claim back the property if he can prove the transaction was made by you to avoid creditors.
In your case, I note there may be litigation pending. If this third party were successful in any Court action against you, and you were then unable to pay what was owed to them, they would have 2 alternatives-
1. make you Bankrupt.
2. make a further application to Court in order to register what is called a Charging Order on your share of your property. This Charging Order then basically sits on your title and as and when the property is eventually sold, you would need to pay to the third party the money outstanding to enable the Charging Order to be removed from the title.
I can't of course say whether either of the above is likely to happen and can only give general advice. However, making someone bankrupt is not normally the best way to get your money back, and the Charging Order scenario would only be possible if you retianed your name on the jointly owned property.
I hope this assists and sets out the legal position.
If a charging order is made can anyone compel me to sell the property or could I keep it for my lifetime and never in effect sell it?
During the course of time when the charging order is in effect does the amount outstanding attract interest?
If I offer a charging order, can the creditor refuse it and compel me either to be made bankrupt or sell the property?
As the property would be in the joint names of yourself and brother, they wouln't be able to get an Order for Sale.
Any Court judgments attract interest at a rate of 8%, so yes, interest would accrue.
A Charging Order is something the other party would have to decide to pursue- once a Court judgment is given (ie the Court decides you owe £x), it is up to the parties to agree on a repayment plan. If the other party is not happy with your proposals for repayment, they can consider making the further application to Court for a Charging Order.
I hope this assists and clarifies the position for you.
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"As the property would be in the joint names of yourself and brother, they wouln't be able to get an Order for Sale."
Can you please confirm this advice applies if the creditor does not go for a charging order but decides to make me bankrupt.
One way for the official receiver to deal with a bankrupt’s interest in a jointly owned property is to sell that interest. The property interest is only ever sold if there is a clear benefit to the creditors in doing so.
In your instance, it is highly unlikely that anyone would want to buy your one half share in the property, especially if your brother is living there, and therefore it would be normal for no sale to be enforced in such circumstances.
Hope this helps.
If so, I would be grateful if you could rate my answer.
Can I assist you any further?
I think this will be my last question. In the event that someone does buy a half share in the house, would he be entitled to live in it also?
Yes- any buyer of the half share would be entitled to occupy as he would become a legal owner of half the share.
I must say it would be very unusual for just the half share to be sold!
Hope this assists.
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