Property and debt

They don't have to - he's already sold it!

Just use the proceeds of sale to pay the debts.

Yes, but if he doesn't want to...

What if the original sale was grossly under true market value?

Lets say the father "sells" the property for a tiny fraction of it's true value, so the proceeds are far less than the debts?

Can the creditors go after the son?

You mean that the "sale" was really just a transfer of assets to keep them away from the creditors? I would think the creditors could go for the house but it has to be through the courts I would expect.

What a jolly decent bunch of creditors he must have.

"Where's our money?" "Over here" "Give us it then" "I don't want to" "Please?" "No" "Oh all right then, you can keep it"

Don't you think he might wake up one evening with his legs broken?

Presumably the creditors can make the father bankrupt and if the property was undervalued then the official receiver can get the value in the property. AIUI under the new rules (due to be published), there might be grounds for extending the period of the bankruptcy.

Stephen

In message , Peter Saxton writes

Unsecured creditors cant go for anything without getting the authority of the courts.

Nearly.

Assuming the creditors make the father bankrupt, the Trustee in bankruptcy could commence an action under S339 of the Insolvency Act 1986. This relates to transactions at an undervalue. The Trustee would have to prove that:

- the transaction was a gift; or

- the cash paid was less than the house's market value.

If successful, the transaction is then reversed - that is, the house reverts to the father and any cash paid (if it's still there!) is paid back to the son.

However, key conditions for a successful claim are:

- the transaction must happen within 5 years pre-bankruptcy; and

- the person must be insolvent, or become insolvent as a result of the transaction.

This is a long drawn-out process, but if the transaction is as blatant as it seems here, the Trustee may well have a go.

Another relevant consideration is that all of the above is civil law. However, under S357 this could also be deemed a fraudulent disposal of property. This is punishable by a fine and/or imprisonment.

In summary - not advisable.

In message , john boyle writes

I'm not sure that secured creditors can either. I see the run-around that mortgagees get before they can arrange an eviction, and often that gets postponed for some nefarious reason at the last minute.

In message , Richard Faulkner writes

I was thinking of HP creditors and possibly holders of fixed charges over book debts. I wasnt sure so decided to restrict it to unsecureds!