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Joshua
Joshua, Lawyer
Category: Bankruptcy Law
Satisfied Customers: 29201
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I am 6 month in my bankruptcy. The Trustee is aware that

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I am 6 month in my bankruptcy. The Trustee is aware that there is a deed of trust on our house made to my wife . The trustee wants to see a copy of the Deed. My wife does not want anything to do with the house and wants to revoke the trust . We believe the house is in negative equity and she doesn’t want to be the beneficiary of the trust anymore.
I have to comply with the Trustee request and send them a copy of the Deed.
How do a let them know also that my wife Wants to revoke her rights under the Deed but maintains her matrimonial rights ?
By an agreement in between both parties can we revoke the deed?
How can we make such a document?
Do I have the legal right to do that as a bankrupt?
Customer: replied 10 days ago.
Thank you

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

I am very sorry to read of the above and I imagine what a difficult position it must be. I will certainly try to clarify your options.

  1. May I confirm with you so far as you are aware, what the declaration of trust achieves please? Presumably from what you say, it assigns some or all of your equity to the extent there is any equity in the property, to your wife?
  2. you mention that you believe the property may be in negative equity. Have you confirmed as much by seeking a redemption statement from the lender and the valuation from a local agent?
Customer: replied 10 days ago.
All equity
  1. thank you. is your wife a joint owner of the property with you?
  2. once in particular is your wife's concern in relation to the trust deed?
Customer: replied 10 days ago.
She is not joint owner
No she is not concerned on the deed . Is the opposite . She wants to revoke her deed in favour of the Trustee, but maintain her matrimonial right. How do we inform the Trustee about my Wife decision?

thank you. It is open to your wife to disclaim her interest in the trust. She cannot disclaim part of her interest-it is a question of all or nothing but from what you say, this concern her. It is not immediately apparent to me what the benefit to her would be in doing so. As a beneficiary of the trust, she is not liable mortgage and therefore it is a question of simply taking any benefit of equity that happens to be in the property. Clearly if the property is presently negative equity, there is no particular benefit but subject to property prices, that may not always be the case.

nevertheless, if your wife is determined to proceed in the above manner, she would need to consider signing a deed of disclaimer. normally you would need to appoint a solicitor to prepare this for you. It may be that you would be able to find a precedent online though deeds are not readily available as a rule.

It does not follow that if she disclaims your interest, it will automatically fall to the trustee in bankruptcy as they also have the option to disclaim but the house in terms of equity to the extent there is any, would no longer belong to either of you if she disclaims her interest. If the houses nevertheless in your legal name, then she can exercise matrimonial home rights but the trustee in bankruptcy can apply to court for an order for sale if they have not disclaimed their interest even if your wife exercises matrimonial homes rights and it will be for a court to decide in this respect whether to grant such an order where they will attempt to balance the interests of your wife and potential creditors

Customer: replied 10 days ago.
There are 2 creditors in my bankruptcy that my wife joined .
They never issued any proceeds yet. But they may do at any time in the future. That’s the main reason. We thought that if my wife revoke her Trust than the Trustee will keep the property for another 2.5 years in their vesting and if there is no some equity , maybe my daughter can offer to buy my interest , and if there is no equity it revert back to me.
Is that not a good reason for my wife to revoke her trust ?
Customer: replied 10 days ago.
As she can be made bankrupt at any future due to her PG to the 2 creditors of mine

I do not follow the advantage. As things stand, unless the trust itself can be challenged under the insolvency act because it was made within the last five years, your wife already owns the property. it is not clear to me the advantage of disclaiming for the chance to potentially buyback in the future what she already owns

Customer: replied 10 days ago.
The 2 creditors that can put my wife in bankruptcy will be informed that my wife has a trust. As you say if the trust is not challenged than they will know my wife has an asset. My trustee will not be interested in the property anymore, but the 2 creditors will make my wife bankrupt later or any time in the future. It’s not her to buy back . Is my douther

Is your wife at risk of being made bankrupt too?

Customer: replied 10 days ago.
As I said she could be at any time if one of the 2 creditors in my bankruptcy that she is joined too issues her a statutory demand

my apologies. I have appreciated your wife is also a risk of bankruptcy. If this is what is motivating her concern in respect of the trust, this begins to make a degree of sense though disclaiming her interest in the trust would not succeed because a trustee in bankruptcy if she were made bankrupt can apply to set aside any gifts or disclaimers she made prior to the bankruptcy. Accordingly it seems to me that it would have limited purpose

Customer: replied 10 days ago.
However her disclaimer/gift today is on an asset of negative equity so zero . I guess a Trustee in her bankruptcy will not set aside such action ???

If there is no equity there is clearly no risk of a set aside transaction. Equally if she were to be made bankrupt, it is all but inevitable that the trustee in bankruptcy would disclaim their interest

Customer: replied 10 days ago.
Thank you for ur advice so far .
We started our discussion asking for your advice following the Trustee request to provide a copy of the Deed of Trust that was on my file during the IVA times ( that failed after 10 month hence the Bankruptcy )
My initial intention was to send the Deed copy but also to say that in fact my Wife is revoking this deed.
I agreed with you and as my wife can make a disclaimer at any time I send today to the Trustee only the copy of the deed.The trustee reply back to me asking for specific who made the draft of this deed for me as it must be a copy in their office plus all the corespondents regarding this draft , emails , etc.
Before I will answer back to the Trustee, the truth is that in 2013 I visited the solicitor office and I asked how to make a deed of trust for my wife . He gave me all the details what a deed should have and said now you can go home take a pice of paper and write down such a declaration , signed it both you and your wife in front of the witness and keep it safe ( take a picture) in this way you just save £500.
At any time if you want to have a proper solicitor made one just call the office, we have your , and your wife details, we know the property and someone in the office will draft a deed and we can mail it to you .
You only need to find a witness again and make sure you have the correct date from the deed you already made as that is the date when you gave the property to your wife.
I came home made such a deed and we sign in front a witness and keep it safe.
Did not think to much off it.
In 2016 I reviewed my papers and I found the deed that we made.
I thought to update it and I called the office. The solicitor that advice me back in 2013 retired so I asked the new solicitor if there are any notes about my visit back in 2013 regarding a deed advice. He said No however after I explained why I called he said, that’s not a problem we still have here in ur file all your details so I can make u a draft so you can insert the correct date and mail it to you . It will cost you £500
His assistant mailed me the draft.
However he spell my wife first name wrong. I copy the draft to correct my wife name and printed the document.
We signed the updated version deed in front of the witness and put the 2013 date to reflect the same date when I made the declaration based on the old deed we made and hold. As now the Trustee wants details of who made the draft , I have to send all the emails that I received with the draft from the new solicitor from 2016. As the date on the deed the Trustee has is 2013 but the draft came to me in 2016 there are going to be more questions ?
Providing the full explanation how and why , as I explained above will be sufficient to clear me off being a criminal, trying to deceive creditors,etc.
Non off that was my intention.
I done what I thought is correct after some maybe bad advice..
The trustee May invalidate the trust but I am worry now if the Trustee May even take Court action against me and not be discharged from my bankruptcy for years.
How should I prepare for this now ?
I’m sorry for such a U turn off events since how we started this morning.
Thank you

A deed is valid whether or not it is made through a solicitor as long as it is drafted correctly. Unless the trustee suspects the date of the deed is not incorrect (e.g. has been artificially backdated) there is little else he could challenge the deed upon. Presumably you would at least be able to prove the date it has been dated.

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