There are some debt solutions where assets have to be realised for the benefit of creditors. These debt solutions include bankruptcy, an IVA or Trust Deed. When there is little or no equity, then the asset doesn't have to be sold or realised. However if the asset, such as a property, has value which can be returned to the creditors, then this must be considered. Sometimes we get asked whether the property can be transferred to another person. This is called disposal of an asset.
Transfer asset for free to partner
If an asset has been transferred to another person in order to hide it from a creditor, then it is the responsibility of the insolvency specialist to decide how to proceed. Any asset transferred unfairly within the past 5 years can be re-assessed. The person who purchased the asset could be required to pay the remaining balance until it reaches the correct value. Alternatively, the asset can be transferred back and sold again.
For example, a husband may transfer a property with £50,000 equity to his wife's name in order to protect his 50% share (£25,000). If this is done quickly before entering bankruptcy, an IVA or Trust Deed then the insolvency practitioner can check the land registry to see the asset has been disposed of.
What Can I Do to Protect My Asset?
The main option to protect your assets is to avoid entering an insolvency solution. There are some informal debt solutions which won't consider your equity in an asset, such as a debt management plan.
To be sure about the best debt solution for you, get advice. It can take 10-20 minutes to get debt advice but you will be given the advice you require to understand what each debt solution would mean to you.
Do not transfer assets to other people for an unfair value. It may seem like the best option but in the long term it can cause you problems.
If you would like advice from our charity on disposing of an asset or what debt solution is best for you, then please call Debt Support Trust on 0800 085 0226.