Posts Tagged ‘Cohen Cramer Solicitors’

The matrimonial home and bankruptcy

Tuesday, July 27th, 2010

Cohen Cramer Solicitors LeedsThe bankruptcy of a spouse can have a catastrophic effect upon the ancillary relief claims of the other spouse.  In this article, it is assumed that it is the husband who is made the subject of a bankruptcy order, and we examine the effect upon the wife’s ancillary relief claim.  However, the same would apply if it were the wife’s bankruptcy and the husband was seeking ancillary relief.

Where there is a possibility that a husband could be made bankrupt, the advice to the wife is to try to reach an early settlement of ancillary relief proceedings and to effect any transfer of property before bankruptcy.  Even if the transfer has not been put into place by the time the husband is made bankrupt, as long as decree absolute has been pronounced and the time limit under the Order for the husband to transfer the property has expired, the property will belong to the wife.  However, if the bankruptcy petition against the husband had been issued before the ancillary relief order had been made then under Section 284 of the Insolvency Act 1986, any disposition by a person later made bankrupt made after the issue of a bankruptcy petition is void.

The wife is therefore safe if an ancillary relief order has been made and a transfer of the property pursuant to a court order has taken effect.  The exception to this would be if there was any collusion, fraud or material non-disclosure by the wife.  In such cases, a trustee in bankruptcy may be entitled to have the ancillary relief order and transfer set aside.  Any settlement must therefore be a genuine resolution of ancillary relief claims.

What would happen if the ancillary relief order provided for the former matrimonial home to remain in joint names but subject to a later sale?  This situation could arise where it had been agreed or the wife had been allowed to remain in the matrimonial home for as long as she liked unless she re-married.  Unfortunately for the wife in this situation, a trustee in bankruptcy can apply to Court for an order that the property be sold unless there are exceptional circumstances.  If the home had been transferred into the wife’s sole name with the charge back in the husband’s favour the trustee would struggle to enforce this charge before the events triggering sale as specified in the charge.

Where the trustee has an interest in a property which used to be the matrimonial home, the trustee has 3 years from the date of the bankruptcy order to take steps to realize his interest.  If a trustee doesn’t take steps within this time frame then his interest reverts back to the bankrupt.

For further information, contact  Cohen Cramer Solicitors family law department here or for further information, contact Cohen Cramer Solicitors on 0113 244 0597 or visit www.cohencramer.co.uk

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Severing a Joint Tenancy

Thursday, July 15th, 2010

Cohen Cramer Solicitors LeedsWhether you are contemplating separating from your partner or getting divorced, you should consider the consequences of what will happen to your share of the equity in your property.

Whilst you may not have figured out how you will divide your assets amongst you, the first step that you should consider taking is to protect your interest in your share of the property.

When purchasing a property, most married couples choose to hold the property equally as joint tenants.  This means that they both own 100 per cent of the property.  On the death of one, the property passes automatically to the other.  This is known as the “rule of survivorship”.

Clearly, if you are contemplating getting divorced or separating, you would not want this to happen.  It is a common misconception that once you are divorced, you automatically sever your ties with one another.  This is not true.  In order to prevent the rule of survivorship to continue, one would have to “sever the joint tenancy” into a tenancy in common.

To hold a property as tenants in common each own a specified share of the property.  When one owner dies, their share falls into their Estate and passes in accordance with their Will, or if no Will is made, it passes through the rules of intestacy.

To sever a joint tenancy, a Notice of Severance needs to be served by one owner on the other owner.  Once the Notice has been served, the joint tenancy has been severed and there is nothing that the other owner can do to prevent this.

A form then needs sending to the Land Registry.  There is no fee payable to the Land Registry for this application.  The Land Registry then make a Restriction in the Proprietorship section of the Property Register of the Title document.  This will prevent the sale of the property by the other owner without the consent of the other.  The restriction itself does not change the ownership from a joint tenancy to a tenancy in common, it merely reflects the change.

There is a greater trend for couples to live together than to marry.  More often than not, cohabitees choose to hold a property as tenants in common to reflect the amount of capital invested by each person into the property.  There is no scientific calculation in determining the exact percentage each owner should hold but it is common for cohabitees to also enter into a trust deed detailing the amount of capital invested.  This is useful as it saves potential problems in the future should the relationship break down.

Finally, it is always advisable to review your Will to ensure that it adequately reflects your true intentions.

View details of Cohen Cramer Solicitors family law department here or for further information, contact Cohen Cramer Solicitors on 0113 244 0597 or visit www.cohencramer.co.uk

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