Here is a link to the 6-28 Bankruptcy Form Statement of Affairs (Debtors Petition)

As a BMVer you may want to take a look at this document, to see what the Official Receiver (OR) is looking for from a bankrupt.

I have highlited a couple of sections that you should be aware of:

1.6 Home Address

3.5 What if you have purchased the property, and they do fill this section in??

8.2 Current Rented Property

9.1 Properties disposed of in last 5 years.

Home address - Current Property Rented - Property Disposed of in last 5 years.......bit of a Red Flag

I currently know of two properties in my area where the BMV deal is being scrutinised by the OR

However a Chartered Surveyors report may be the solution. If his valuation matches your purchase price - then this is an MV deal and you have evidence supporting this.

Taken from Singing Pig..............full topic link. After a BMV sale - Liability?

Like others here, I thought I had insurance cover sorted for any future bankruptcy action – until I used a new solicitor a few weeks ago. For what it’s worth this is what I’ve found out.

   1. As others have said, Insolvency Indemnity Insurance does not cover you as a BMV buyer. The reasons given for this, according to a Countrywide Legal newsletter, include:

“They are likely to be aware of the seller’s ‘financial circumstances’ and, as a result, the reason why they are receiving a ‘discount’ – hopefully this is not because the property is being sold to avoid creditors!

They are already benefiting from the transaction by way of the discounted purchase so cannot then be insured against the potential bankruptcy of the seller and a subsequent claim from the Trustee in Bankruptcy under Sections 339 – 342 of the Insolvency Act 1986.”

countrywidelegal.co.uk/intouch

   1. The mortgage lender is covered by the insurance policy, and this has been a requirement of the lender in at least one of my past BMV purchases.
   2. Insolvency Indemnity Insurance does protect future buyers (as long as there is no connection to you). This may be useful if you intend to sell on the property within the 5 years, as the buyer’s mortgage lender or solicitor may ask for it. Although I believe you can take out the insurance at a later date (when you sell on) rather than when you buy – provided the original vendor hasn’t filed for bankruptcy.

You can also have problems taking out the insurance if the vendor is a company director – the insurer may want to see the seller’s accounts. Tricky one this – how do you get a vendor to produce these without falling foul of the usual clause that invalidates the insurance if you disclose its existence?

I know there are potential arguments to counter a receiver setting aside a BMV purchase, mainly around the fact that the sale was negotiated – but as Johnny D points out there may be more problems with rent back than a straight BTS.

On my pending purchase I’ve decided to try out the red book valuation method mentioned by Pal – Thanks Pal.

I’d be interested in finding out what happens with any cases that come up against the insolvency act.

For anyone who has purchased a BMV.........READ THIS!!

BMV Bankruptcy Danger