Bankruptcy

[jamesnan]

I am beginning to suspect that my sister's husband - who has separated from her and their 2 children - is thinking along the lines of making himself bankrupt. He has spent a lot of redundancy money he got in September, owes maximum on one credit card, and more money on another.
He is paying half her mortgage as well as giving her 20%of his wages for the children, and is also renting a house for himself, paying train fares and all the usual costs.
He seems to have no money during the month, and we suspect that he is so much in debt that all his wages go when he gets them. If he was to declare himself bankrupt, what would happen to my sister and children, because the house is in both their names? Would the house have to be sold to cover all his debts, and where would my sister and the girls end up?
Maybe someone could help me with some information, because I may well have to broach the subject with my sister, since she may not have thought about this due to so many other things going on at the moment.

[CheekyChops]

What makes you think he is going to declare himself bankrupt?

If I was paying half a mortgage, giving 20% of my salary towards my children and paying rent/bills on another house, I would have no money left for the month either!

Anyway, after a quick search, I looks like the house might have to be sold:

What are the effects of Bankruptcy?

Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home.

Where the home is co-owned, the debtor’s interest can still be realised, but a right of occupation period of twelve months is allowed for the disposal of the property if a co-owner, family or dependents of the debtor occupy it. At the end of the twelve-month period, the property will almost certainly have to be put up for sale, enforced by a Court order if necessary.

[jamesnan]

He has been on a spending spree since he got his redundancy money, whereas he could quite easily have paid off his credit cards, bought a season ticket for a year, sorted out his rent for a year etc etc. Now it has gone, he is realising what a plonker he has been, leaving his family for what he thought was the greener grass on the other side. His choice to leave!!!
I just think it is so unfair of him to have put my sister in this situation, whereby she now may have to lose her home, as well as the family she has had for years, due to his stupidness.

[bednobs]

?he's taking the kids as well

[jamesnan]

No, he decided he did not want to be living with either wife or daughters, aged 14 and 11, and upped and went, had various lady friends , wanted the dream life of own spacious loft type apartment (dream on) with daughters to stay when he wanted them to! Was made redundant, and got another job immediately,which meant that the redundancy money was " his spending money" but of course it has all gone, has maxed out on one credit card, which has been taken away, and is almost at limit on the other. His bank balance is virtually nil, and he said "he didn't realise how expensive things were!!!"
I can just see the day when he says he cannot afford to pay half the mortgage anyway, but the vision of having to sell their house to pay off his debts makes me more angry, especially since he has acted very immaturely instead of paying his debts immediately.

[themas]

Go onto the Insolvency Service own (gov.uk) website. There are a lot of booklets, including one on what happens to houses in bankruptcy.

It is not necessarily the case that the house will have to be sold. That will depend to some extent on how much (if any) equity there is in it. However, it could well be that if he is bankrupt he will not be allowed to treat the half mortgage as an essential payment. If so, it would leave your sister in the difficult position of having to pay the whole amount.

This whole subject can become very complex, & if a divorce is also involved it can muddy the waters further. Your sister might end up needing some legal advice - but that could be very expensive.

[bednobs]

i asked about the kids because you mention her losing her family - what do you mean?

[jamesnan]

She means her family, husband wife and children together, as a whole group, not her, single mum!