Peter Barton from Ashfords solicitors recently wrote a guide on bankruptcy and equity release. Alarmingly, Peter says that bankruptcy amongst pensioners has increased 6 fold in the last 10 years.
How can equity release be used alongside bankruptcy
The guide, which is very useful for those pensioners or their friends and relatives that are considering or already in bankruptcy. Peter and Ashfords are experienced solicitors in equity release.
The guide gives the following advice:
A person in financial difficulty has a number of options available, either in order to try and avoid bankruptcy
altogether or in order to protect his/her home. Equity release can be a means of raising funds to pursue one of the following options:
- Buying back the Trustee’s interest;
- Seeking an annulment of the Bankruptcy Order; or
- Entering into an IVA or FTVA with creditors.
Here at Retirement Solutions (UK) we asked Jennie Gray to comment on using equity release to protect the home, Jennie said, “Firstly, Peters guide is very good and anyone looking for information on using equity release in relation to bankruptcy should visit Ashfords website and download a copy. As with anything like this pensioners need to seek specialist legal and financial advice to avoid getting things wrong. I would advise pensioners to contact an independent financial adviser or a solicitor that specialises in equity release”.
Peters conclusion is:
Clearly the best option for a debtor would be to avoid bankruptcy altogether by using Equity Release to pay
creditors in full or, if that is not possible, to fund an IVA with creditors. Following bankruptcy, costs will start to rise, with Trustee’s fees, legal fees and ad valorem duty accruing. As a result it will be more difficult, but not necessarily impossible, for the Bankrupt to raise sufficient funds to purchase the Trustee’s interest or to present a viable IVA proposal.
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