Click here to learn more about our revolutionary app or download directly from one of the sources below.
against the property equity. This is because capital payments have increased the equity, whereas interest payments do not.
[See ‘Joint Tenants’, Tenancy in Common’, ‘Equity’, ‘Bankruptcy’ and ‘Trustee in Bankruptcy’.]
An equity of exoneration arises where one joint owner of a property mortgages or charges it for their sole benefit (often to raise money for their business). The other co-owner is treated like a surety or guarantor of that mortgage, and is presumed to be entitled to be exonerated (freed from the burden) out of the other owner’s share.
In this situation it is presumed that the co-owner will be ‘exonerated’ from liability, with the whole debt (of the second mortgage) falling solely on the Bankrupt’s estate. This means that, when the Trustee in Bankruptcy is calculating how much equity can be taken from the pot following sale, the amount to repay the second mortgage will be taken entirely from the share allocated to the Bankrupt.
[See ‘Bankrupt’, ‘Equity’ and ‘Trustee in Bankruptcy’.]
This is often used in relation to property (usually the matrimonial home of a Bankrupt).
Equitable interest is a title that indicates a beneficial interest (an interest in the economic benefit of property – its value) in property and that gives the holder the right to acquire formal legal title. In other words the position of the Trustee in Bankruptcy gives them the ultimate right to sell property that is not legally theirs.
[See ‘Bankrupt’, ‘Trustee in Bankruptcy’, ‘Equity’ and ‘Beneficial Interest’.]
The law of Equity is derived from old English common law, when courts used their discretion to apply justice in accordance with natural law. Equity law supersedes common law and statute law when there is a conflict between the two and neither can appropriately bring the correct verdict.
