What's to stop tenant transferring assets to evade debts?

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    What's to stop tenant transferring assets to evade debts?

    I have just successfully obtained a Court Judgment against an errant tenant who would not give up the property (even though he no longer lives there) and has racked up nearly £9,000 in rent arrears! I'm confident I will now get repossession. But getting the money owed is less certain. My question is:

    Having now received this judgment against him, what's to stop the tenant immediately transferring all his assets - house, car, money, etc - into someone else's name, thus thwarting any attempt to extract the money he owes?

    Thanks

    LL

    #2
    Originally posted by longletter View Post
    I have just successfully obtained a Court Judgment against an errant tenant who would not give up the property (even though he no longer lives there) and has racked up nearly £9,000 in rent arrears!
    Either the rent is very high, or you were very slow in taking action to evict...

    Having now received this judgment against him, what's to stop the tenant immediately transferring all his assets - house, car, money, etc - into someone else's name, thus thwarting any attempt to extract the money he owes?
    I don't think you can stop him transferring his assets, but it would seem very unwise to transfer everything, and give away all his money - who's to say he'll get it all back? If T is employed, go for an Attachment of Earnings Order; and if you know T's bank account details and that there is money in the account, a Third Party Debt Order. You could also apply for a Charging Order on the house.

    See http://www.hmcourts-service.gov.uk/i...ment/index.htm

    As a last resort, if T is likely to fear being made bankrupt (perhaps he's a company director or it would affect his work), you could petition for bankruptcy. It's a bluffing tool, really, because if you pursue it and the debtor is made bankrupt, then you may get nothing. I'm not sure whether or not you have to serve a statutory demand first, as the CCJ may suffice.

    Comment


      #3
      What stops transfer of assets is the Insolvency Act 1986, re disposals by gift or at undervalue.
      See s.339 onwards ("Adjustment of prior transactions") here: http://www.statutelaw.gov.uk/content...ilesize=168081
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

      Comment


        #4
        Originally posted by westminster View Post
        Either the rent is very high, or you were very slow in taking action to evict...

        I don't think you can stop him transferring his assets, but it would seem very unwise to transfer everything, and give away all his money - who's to say he'll get it all back? If T is employed, go for an Attachment of Earnings Order; and if you know T's bank account details and that there is money in the account, a Third Party Debt Order. You could also apply for a Charging Order on the house.
        yes, the rent was relatively high (it's a big house), plus I was slow to take action (too patient and trusting!)

        I think T's employment is sole Company Director of an ailing company. Could an Attachment of Earnings order be applied to that with any hope of success? If he has a devoted wife and a company presumably he could safely lodge his car and money with either of them? And as for a Charging Order on his house, well that may have a 100% mortgage and now be in negative equity. Or am I being too pessimistic?!

        Comment


          #5
          Originally posted by jeffrey View Post
          What stops transfer of assets is the Insolvency Act 1986, re disposals by gift or at undervalue.
          Thanks for that link Jeffrey - I've glanced through the Insolvency Act 1986 (far too much to read in detail at this stage!). Can I take it that would only be relevant if I actually petitoned for T's bankruptcy? ie it would have no effect on a Third Party Debt Order if he had already transferred his money to his wife, or company, for example?

          Comment


            #6
            Rent isn't over £25k pa (£2083pm) is it? As you may be entering into a whole new ball game if it's not an AST.

            Comment


              #7
              Originally posted by longletter View Post
              I think T's employment is sole Company Director of an ailing company. Could an Attachment of Earnings order be applied to that with any hope of success?
              I don't know, sorry. I wouldn't be hugely optimistic.

              If he has a devoted wife and a company presumably he could safely lodge his car and money with either of them?
              Not according to Jeffrey, and Jeffrey is a lawyer.

              And as for a Charging Order on his house, well that may have a 100% mortgage and now be in negative equity. Or am I being too pessimistic?!
              Possibly; you don't know how big the mortgage is, so it's worth a try.

              Originally posted by longletter View Post
              Can I take it that would only be relevant if I actually petitoned for T's bankruptcy?
              I wondered that, too. But either way, if T tried to wriggle out of his liabilities by transfer of assets etc, then you can always petition for bankruptcy and then the transfers wouldn't be valid/lawful.

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