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Clare
Clare, Solicitor
Category: Bankruptcy Law
Satisfied Customers: 35566
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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If one of the spouses is made bankrupt because of a divorce

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If one of the spouses is made bankrupt because of a divorce settlement - can that divorce settlement be over turned and how ? The non bankrupt spouse retained the FMH and the spouse seeking bankruptcy inherited debts of £54,000 with just a £17,000 sum from the settlement. The spouse in theFMH has stopped working on I’ll health grounds and the spouse with the debt earns £2859 pcm

My name is Clare

I shall do my best to help you but I need some further information first

When was the Order made?

Customer: replied 7 months ago.
The order was made in the 3rd April
Customer: replied 7 months ago.
3rd April

You mean last week?

Was it an Order made by the Court after a hearing?

Customer: replied 7 months ago.
It was a settlement outside of court that was ratified by the judge without going into the hearing fully. I was threatened with spousal maintenance as her GP claimed in a letter that she will never work again with fibromyalgia so I had little option than to agree the miserly settlement.

But you are in fact about to go bankrupt?

Customer: replied 7 months ago.
That is an option I have been given as I now have £36,000 debts as a result. But until she releases me from the mortgage in a few weeks I still have stake in the FMH valued at £210,000 with a £76,000 remaining mortgage. Her mum is paying off the mortgage and they giving me £17,000 towards the joint debts of £20,000 and my debts of £34,000, total £54,000. You checked my narrative statement a few months ago.

Remind me how much the property is worth

Customer: replied 7 months ago.
The property is worth 210,000 she has not worked for 2 and half yeras, I've been paying her bill and mortgage and my own rent for my house I'm renting, used all my savings doing so

You agreed to a Consent Order which means that you cannot appeal it or ask for it to be reconsidered.

If you go bankrupt then in fact she will be able to rely on the order to protect her interest in the property against the Trustee in bankruptcy

I am sorry that the news is not better

Please ask if you need further details

Customer: replied 7 months ago.
Thank you for your reply. I have just received the following from the litigation loan company who I owe £14,021 to. They say I have to pay them first out of the £17,000 I will; receive from the settlement. That leaves just £3,000 towards my there creditors, including Santander that I owe £20,000! The court consent order says I have to discharge the joint £20,000 debt and doesn't mention the Novitas litigation loan. Surely I'll be in breech of the court consent if I repay in full the litigation loan. I had intended to repay all my creditors a proportion of the £17,000 according to the proportional amount I owe them and enter into a repayment plan with each for the balance. If I repay Novitas in full surely the others will say that wasn't fair and potentially take me to court. Novitas it seems will take me to court f I don't repay theirs in full. I seem to have nowhere to go!!! Do I have to give into Novitas and allocate the remaining £3,000 to Santander and my family and hope that Santander don't realise I haven't discharged the court consent? To confirm, I will be leaving feedback. Many thanks.Whilst we understand that the court order only directs you to settle the “joint debts” (which are defined as the Santander account overdraft and Santander loan), the lump sum of £17,000 has been awarded to you and therefore makes up part of your settlement under these proceedings. As previously mentioned, your settlement and therefore this lump sum is assigned to Novitas in the first instance, in line with the terms and conditions of your Novitas loan and the Deed of Assignment.The respondent in these proceedings should already be aware of the Novitas loan and Deed of Assignment, as per your obligations under the loan agreement. Therefore, should the lump sum payment be made by the other side, these funds must come directly to us.In the circumstances, we will need to make contact with the respondent’s solicitors in order to provide details of amounts outstanding to us in order to facilitate this. If you are content for us to do this, please provide contact details for the respondent’s solicitors. Otherwise, we would request that you contact them yourself to remind them of your Deed of Assignment and the fact that Novitas is to be discharged in the first instance, prior to any funds being released to you.Should it be the case that the respondent is unable to release you from the mortgage by 3rd July 2018 and the property is to be sold, we would need to be repaid in full by the conveyancing solicitor dealing with the sale upon completion.
Customer: replied 7 months ago.
Forgot to say, I had also hoped to get a debt consolidation loan to repay the majority of the debts but I have been declined by two companies because my credit score is in ruins. My only other options seem to be insolvency or an IVA, but I've been advised against these as my disposable income is fairly high and will be taken completely for 5 years and I'll repay over £45,000.

I am afraid that Novitas is correct - there is no way around this.

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