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In order to safeguard your property
against re-possession in any bankruptcy you need to take protective
steps. In the case of properties, there are certain steps
that can be taken by you to determine your share of the equity
in the property. This will show you your maximum exposure
as far as the equity in the property is concerned.
To determine your equity in a property,
where you own your home jointly with your partner you need
to do the following.
You should obtain, from a reputable
Qualified Chartered Surveyor, a valuation on the property
concerned. The valuation must be done in line with the Royal
Institute of Chartered Surveyors Valuation and Appraisal manual,
also known as the "Red book" and must be done on an open market
basis.
You must also obtain statements
from the mortgage companies who hold charges on the property,
for example, should you have a first mortgage and a second
mortgage on the property, you must obtain statements from
both parties.
Should you have an endowment mortgage,
you will also need a surrender value in relation to that policy
along with confirmation that the policy is assigned to the
mortgage company.
Once you have all of those documents
to hand, you will be able to determine your half share of
the property.
The valuation will show you the
open market value of the property.
From that you will need to subtract
the details of the liabilities against the property, however,
should you have an endowment policy, you must reduce the related
mortgage figure by the amount of the surrender value of the
policy. For details of the calculation that applies in this
case, see case study 4 below.
For those debtors with repayment
mortgages, the calculation is your valuation figure, minus
the amount outstanding on the mortgage statement to give you
the equity. You then divide that sum by 2 to show the half
equity of both partners.
In the event of any bankruptcy,
it would be expected that the wife would raise the half equity
of the husband by way of a re-mortgage or by way of an unsecured
loan to buy out the equity of her husband, thereby safeguarding
the house.
Purnells can assist you in safeguarding
the matrimonial home even before a bankruptcy has been made.
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