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  • FIRST POST
    • richy4
    • By richy4 17th May 17, 9:28 PM
    • 144Posts
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    richy4
    Ex forcing sale of shared property with deliberate IVA
    • #1
    • 17th May 17, 9:28 PM
    Ex forcing sale of shared property with deliberate IVA 17th May 17 at 9:28 PM
    Asking on behalf of a friend:

    My friend lives in a property which she is on the mortgage with her ex. They bought several years ago. He contributed only towards furniture and solicitors fees on initial purchase. While he lived in the property, he paid half the mortgage payments.

    He moved out 3 years ago. She carried on living in the property and paying for everything, she also put in the deposit money on initial purchase. The mortgage has continued in joint names until now.

    Her ex is now saying he is about to apply for an IVA because he is struggling with his bills as he has just got married and has had a baby. Also struggling to keep up on rent payments.

    My friend is worried that this is a deliberate attempt for her ex to simply rack up a load of debt to deliberately require an IVA which in the process will mean their joint asset, the property, will be used to settle some of the money owed.

    Can anyone outline what process the above situation follows?

    Can my friend get her ex off the mortgage before he applies for his IVA and then its all down to him to deal with himself?

    If the IVA is approved, what impact will this have on my friend as she wants to stay in the flat and she has been paying on time every month! She does not want to sell or give her ex 50% as he never contributed this in the first place!

    Will this affect her credit rating in the future?

    Thanks for any replies or advice in advance!
Page 1
    • AnotherJoe
    • By AnotherJoe 17th May 17, 9:52 PM
    • 7,675 Posts
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    AnotherJoe
    • #2
    • 17th May 17, 9:52 PM
    • #2
    • 17th May 17, 9:52 PM
    Yet another in the long line of "should have had a clean break at the time", posts

    She needs to see a solicitor amd get it sorted properly. Unless there are children involved on her part in the house , it may be she needs to give up some of the equity, depends what the rules are.
    • TBagpuss
    • By TBagpuss 17th May 17, 9:53 PM
    • 6,084 Posts
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    TBagpuss
    • #3
    • 17th May 17, 9:53 PM
    • #3
    • 17th May 17, 9:53 PM
    Unfortunately, because the property is in joint names she s almost certainly going to have to buy him out.

    She may be able to negotiate to pay less than 50%, and if her ex is struggling financially then a lump sum offer may be attractive to him - money now, rather than money later after the property sells.

    It's in her interests to buy him out and remortgage to clear the joint mortgage, as because they have a joint mortgage they will, I believe, be linked / connected people for credit checks .

    She could see a solicitor (look for one who deals with ToLATA claims) to see what her chances of getting a split with more than 50% of the whole, but i they own a joint tenants and didn't put anything in place to protect her deposit at the outset it is not automatically protected.
    • Cakeguts
    • By Cakeguts 17th May 17, 9:58 PM
    • 3,280 Posts
    • 4,573 Thanks
    Cakeguts
    • #4
    • 17th May 17, 9:58 PM
    • #4
    • 17th May 17, 9:58 PM
    Asking on behalf of a friend:

    My friend lives in a property which she is on the mortgage with her ex. They bought several years ago. He contributed only towards furniture and solicitors fees on initial purchase. While he lived in the property, he paid half the mortgage payments.

    He moved out 3 years ago. She carried on living in the property and paying for everything, she also put in the deposit money on initial purchase. The mortgage has continued in joint names until now.

    Her ex is now saying he is about to apply for an IVA because he is struggling with his bills as he has just got married and has had a baby. Also struggling to keep up on rent payments.

    My friend is worried that this is a deliberate attempt for her ex to simply rack up a load of debt to deliberately require an IVA which in the process will mean their joint asset, the property, will be used to settle some of the money owed.

    Can anyone outline what process the above situation follows?

    Can my friend get her ex off the mortgage before he applies for his IVA and then its all down to him to deal with himself?

    If the IVA is approved, what impact will this have on my friend as she wants to stay in the flat and she has been paying on time every month! She does not want to sell or give her ex 50% as he never contributed this in the first place!

    Will this affect her credit rating in the future?

    Thanks for any replies or advice in advance!
    Originally posted by richy4
    Only furniture and half the mortgage is something. Why should she be entitled to keep this? Only she will know how the joint ownership of the property was set up and what proportions the property was owned in.
    • richy4
    • By richy4 17th May 17, 9:59 PM
    • 144 Posts
    • 26 Thanks
    richy4
    • #5
    • 17th May 17, 9:59 PM
    • #5
    • 17th May 17, 9:59 PM
    Thanks for the replies guys.

    Would one option be to sell the property before her ex manages to apply for any of this IVA?

    And then she can arrange a split amount between the two of them only, without any third party.
    • richy4
    • By richy4 17th May 17, 10:00 PM
    • 144 Posts
    • 26 Thanks
    richy4
    • #6
    • 17th May 17, 10:00 PM
    • #6
    • 17th May 17, 10:00 PM
    Only furniture and half the mortgage is something. Why should she be entitled to keep this? Only she will know how the joint ownership of the property was set up and what proportions the property was owned in.
    The property was bought by her and her ex jointly. Joint mortgage, joint owners. This remains the same today. Difference is she lives there and still pays for it all, he left ages ago and pays nothing and never really did but now it seems has lost patience waiting for her to sell it and is going down this route of IVA to get her back.
    • Red-Squirrel
    • By Red-Squirrel 17th May 17, 10:08 PM
    • 2,031 Posts
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    Red-Squirrel
    • #7
    • 17th May 17, 10:08 PM
    • #7
    • 17th May 17, 10:08 PM
    Thanks for the replies guys.

    Would one option be to sell the property before her ex manages to apply for any of this IVA?

    And then she can arrange a split amount between the two of them only, without any third party.
    Originally posted by richy4
    He would have to agree to the sale and sign the paperwork.

    Depending on how much his debts are, if she offered to buy him out for that much to give him a clean slate might he go for that to avoid the credit issues that come with an IVA?
    • richy4
    • By richy4 17th May 17, 10:19 PM
    • 144 Posts
    • 26 Thanks
    richy4
    • #8
    • 17th May 17, 10:19 PM
    • #8
    • 17th May 17, 10:19 PM
    I think it is a deliberate ploy for her ex to retrieve some of the equity of the property and a rather vindictive ploy at that!

    My friend would rather sell the property and negotiate privately a split of the proceeds with her ex. Then at least there is no continuous third parties involved.

    Not sure if he would agree to this, the major issue from her side is she wants to stay and I think he knows this and is playing on it. One way or the other, he will get cash from the property so he doesn't care!

    If he applies for an IVA, will this affect her credit record? The mortgage is joint, but his outstanding debts are his own. I understand from some quick research via Google that her credit should be untouched as it is he who has issues.
    • Thrugelmir
    • By Thrugelmir 17th May 17, 10:26 PM
    • 56,243 Posts
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    Thrugelmir
    • #9
    • 17th May 17, 10:26 PM
    • #9
    • 17th May 17, 10:26 PM
    I think it is a deliberate ploy for her ex to retrieve some of the equity of the property and a rather vindictive ploy at that!
    Originally posted by richy4
    If the ex contributed to the mortgage then quite rightly some of the equity is his. Nothing vindictive. Only herself to blame for leaving the situation as it was. The matter should have been dealt with when the relationship ended.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • gycraig
    • By gycraig 17th May 17, 11:33 PM
    • 410 Posts
    • 295 Thanks
    gycraig
    I think it is a deliberate ploy for her ex to retrieve some of the equity of the property and a rather vindictive ploy at that!

    My friend would rather sell the property and negotiate privately a split of the proceeds with her ex. Then at least there is no continuous third parties involved.

    Not sure if he would agree to this, the major issue from her side is she wants to stay and I think he knows this and is playing on it. One way or the other, he will get cash from the property so he doesn't care!

    If he applies for an IVA, will this affect her credit record? The mortgage is joint, but his outstanding debts are his own. I understand from some quick research via Google that her credit should be untouched as it is he who has issues.
    Originally posted by richy4
    They broke up 3 years ago and she still hasn't sold the house of paid his equity ? Yet he's the vindictive one. Did she plan to just keep THERE house ?
    • gycraig
    • By gycraig 17th May 17, 11:35 PM
    • 410 Posts
    • 295 Thanks
    gycraig
    I think it is a deliberate ploy for her ex to retrieve some of the equity of the property and a rather vindictive ploy at that!

    My friend would rather sell the property and negotiate privately a split of the proceeds with her ex. Then at least there is no continuous third parties involved.

    Not sure if he would agree to this, the major issue from her side is she wants to stay and I think he knows this and is playing on it. One way or the other, he will get cash from the property so he doesn't care!

    If he applies for an IVA, will this affect her credit record? The mortgage is joint, but his outstanding debts are his own. I understand from some quick research via Google that her credit should be untouched as it is he who has issues.
    Originally posted by richy4
    They broke up 3 years ago and she still hasn't sold the house of paid his equity ? Yet he's the vindictive one. Did she plan to just keep THERE house ?.

    I'd be pretty annoyed if my ex was chilling in my house which simultaneously stopped me moving on and buying my own property
    • Candyapple
    • By Candyapple 18th May 17, 8:04 AM
    • 2,495 Posts
    • 1,863 Thanks
    Candyapple
    If he applies for an IVA, will this affect her credit record? The mortgage is joint, but his outstanding debts are his own. I understand from some quick research via Google that her credit should be untouched as it is he who has issues.
    Originally posted by richy4
    Yes it will definitely affect her credit history - in fact the day since they took out a joint mortgage, any late payments or credit searches that he has made since then have also been made in her name too. If you are financially associated with someone it means your credit files are searched at the same time the other person applies for something. If the other person has a history of late payments, defaults, CCJs this in turn will affect the other person's credit history too. It's why lots of people are wary of getting joint bank accounts with partners if one person has a poor credit history and the others is good.

    Will your friend be able to get a mortgage on the property on her own in her name only based on only her salary? If she can't then the only option to remove him from the mortgage and also being financially connected is to sell up and then split the proceeds accordingly.

    Once the property is sold and funds divided, your friend will need to contact all 3 credit reference agencies and inform them that she is no longer financially associated with him. In most cases she will have to fill out a form and wait a couple of months for the association to be removed.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • richy4
    • By richy4 18th May 17, 8:32 AM
    • 144 Posts
    • 26 Thanks
    richy4
    She certainly hasn't been 'chilling' in the property as she has become liable financially for all of it including massive hikes in the service charges and paying off additional loans taken out on initial purchase. I agree it was stupid of her to leave the situation as it was and constantly reminded her of this. However he chose to leave and they did not agree or decide upon 'shares' at any point.

    So the best thing to do is to check her credit score/report on the usual channels like MSE Credit Club and Noddle, Clearscore etc to see how bad he has screwed up their joint credit file?

    I guess if it is badly screwed up due to his loans and other debts then even if she wanted to get him off the mortgage and continue herself he has also now eliminated any chance of her doing that due to what he has done to her credit history on his side.

    She can afford to take the mortgage herself, if he agrees. I think he would probably agree however the 2 major issues of this are the credit history might be too far gone now for her given what he has done and also the current mortgage deal ends later this year so to get out of it early will incur the usual early charges?
    • getmore4less
    • By getmore4less 18th May 17, 8:45 AM
    • 30,821 Posts
    • 18,429 Thanks
    getmore4less
    Asking on behalf of a friend:

    My friend lives in a property which she is on the mortgage with her ex. They bought several years ago. He contributed only towards furniture and solicitors fees on initial purchase. While he lived in the property, he paid half the mortgage payments.

    He moved out 3 years ago. She carried on living in the property and paying for everything, she also put in the deposit money on initial purchase. The mortgage has continued in joint names until now.
    Originally posted by richy4
    first step would be to work out what equity he has based on reasonable assumptions.

    if we get the following can make a approximation of his current equity.

    1. The total costs at the start, who paid what and how much was mortgage.

    2. how much of the mortgage he paid and for how long.

    3. value when he move out/stopped paying the mortgage and the amount of mortgage left at that point.

    4. value now.

    eg. (JUST AN EXAMPLE)
    1. total cost £200k, he paid £2k she paid £18k mortgage £180k
    2. paid the mortgage 50:50 for 5 years.
    3. £250k & £150k
    3. £300k

    1,2 at the start the ownership split is 46:54
    3. he owns 46% of £250k owes 50% of £150k net £40k or 16% of £250k
    4. now owns 16% of £300k that's now £48k.



    there is a the additional adjustment like the occupier owes rent on the bit they don't own and the non occupier owes that % on maintenance/improvements.

    The sensible thing would have been to have the beneficial ownership documented with a trust deed,,, in the absence you have to look at actions that formed the intent, eg was the deposit a % purchase or just a load to the property, that could change the ownership o 50:50 at the start.
    • AnotherJoe
    • By AnotherJoe 18th May 17, 8:48 AM
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    AnotherJoe
    She certainly hasn't been 'chilling' in the property as she has become liable financially for all of it including massive hikes in the service charges and paying off additional loans taken out on initial purchase. I agree it was stupid of her to leave the situation as it was and constantly reminded her of this. However he chose to leave and they did not agree or decide upon 'shares' at any point.

    So the best thing to do is to check her credit score/report on the usual channels like MSE Credit Club and Noddle, Clearscore etc to see how bad he has screwed up their joint credit file?

    I guess if it is badly screwed up due to his loans and other debts then even if she wanted to get him off the mortgage and continue herself he has also now eliminated any chance of her doing that due to what he has done to her credit history on his side.

    She can afford to take the mortgage herself, if he agrees. I think he would probably agree however the 2 major issues of this are the credit history might be too far gone now for her given what he has done and also the current mortgage deal ends later this year so to get out of it early will incur the usual early charges?
    Originally posted by richy4
    No reason they cant agree to coincide that with the current deal ending, if ex tried to force a sale though courts it could take that long and I'd be confident would cost more.

    She needs to see a solicitor (this half a***d approach has got her into this mess in the first place) even if only to understand the boundaries of what the equity split should be. They could then agree a mutual settlement using that as a basis and she'd also know if she was looking ata definite sale or could afford to mortgage it by herself.
    • Pixie5740
    • By Pixie5740 18th May 17, 9:33 AM
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    Pixie5740
    Your friend has had the benefit of continuing to live in the jointly owned property whilst the ex has had to pay rent to live elsewhere.

    I don't really understand why your friend thinks that the ex wanting to sell the jointly owned asset has anything to do with increasing his debt. That makes no sense. If anything it seems incredibly sensible that someone who is in so much debt where an IVA is the best solution would a) want to decrease the amount of debt because whilst the joint mortgage remains he has joint and several liability for the whole debt even though not living in the property, and b) want to raise any funds available to them such as the equity in this property to help reduce the amount of money owed.
    Last edited by Pixie5740; 18-05-2017 at 9:44 AM.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Thrugelmir
    • By Thrugelmir 18th May 17, 10:28 AM
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    Thrugelmir
    However he chose to leave and they did not agree or decide upon 'shares' at any point.
    Originally posted by richy4
    That's life. You just have to pick yourself up and get on with it. Little point looking backwards. It's now that has to be resolved.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • Candyapple
    • By Candyapple 18th May 17, 11:22 AM
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    Candyapple
    She certainly hasn't been 'chilling' in the property as she has become liable financially for all of it including massive hikes in the service charges and paying off additional loans taken out on initial purchase. I agree it was stupid of her to leave the situation as it was and constantly reminded her of this. However he chose to leave and they did not agree or decide upon 'shares' at any point.

    So the best thing to do is to check her credit score/report on the usual channels like MSE Credit Club and Noddle, Clearscore etc to see how bad he has screwed up their joint credit file?

    I guess if it is badly screwed up due to his loans and other debts then even if she wanted to get him off the mortgage and continue herself he has also now eliminated any chance of her doing that due to what he has done to her credit history on his side.

    She can afford to take the mortgage herself, if he agrees. I think he would probably agree however the 2 major issues of this are the credit history might be too far gone now for her given what he has done and also the current mortgage deal ends later this year so to get out of it early will incur the usual early charges?
    Originally posted by richy4
    Yes, definitely get her to check all 3 of her credit reports to check the damage.

    Just to be sure, even though your friend has been paying the mortgage all this time on her own, there is a difference between that and being able to get a mortgage on your own in your own name.

    When they first bought the property, the mortgage was based on 2 incomes. Now after several years and no doubt the property has also increased in value, is your friend's income enough to satisfy being able to remortgage the property on her own income solely? If it's not, then she'll need to sell.

    Your friend will effectively be getting a remortgage. this involves a legal process to remove the ex from the mortgage and - as the mortgage is a loan secured on the property - part of that process will deal with removing him from the deeds too. So if she gets a new mortgage in her name only, he will be removed from the mortgage and the deeds as part of that process.

    I think the best advice your friend can do now is speak to a solicitor regarding exactly how much this is going to cost her in terms of % of proceeds given to both parties especially where there were no legal contracts drawn up at the start to specify that he didn't contribute towards the deposit etc.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • EachPenny
    • By EachPenny 18th May 17, 11:59 AM
    • 3,319 Posts
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    EachPenny
    I can't see it anywhere in the posts so far, but were they married and did they have children together?

    Threatening to enter into an IVA is a classic strategy in separation cases - a friend was in just this situation and called their ex's bluff. The ex went into an IVA and is now having to live with the consequences for at least 7 years. The ex was poorly advised.

    With an IVA a shared property and mortgage can only be included if the co-owner agrees. The ex can get an IVA which will have an impact on your friends credit history too, but it cannot force the sale of a joint asset. If the friend is clear from the start that they will not agree to include the house in the ex's IVA then the IVA provider has to negotiate with the creditors to see if they will accept the IVA without the house included. There is no certainty that they will, and also a risk they will then seek to go down the bankruptcy route which may then cause bigger problems.

    In my friend's case they were advised to wait until the ex went bankrupt and then negotiate with the bankruptcy service as this was likely to be easier than dealing with the ex. But that was advice applicable to their particular circumstances, it might not suit the OP's friend.

    Your friend needs a good solicitor, and one who understands debt/IVA/bankruptcy law as much as family/property law. These disciplines don't always overlap, so they may end up having advice from two different solicitors - which can get very expensive.

    If they can negotiate a deal with the help of solicitors then that is possible the best outcome they can hope to achieve.
    "In the future, everyone will be rich for 15 minutes"
    • EachPenny
    • By EachPenny 18th May 17, 12:06 PM
    • 3,319 Posts
    • 6,148 Thanks
    EachPenny
    Just to be sure, even though your friend has been paying the mortgage all this time on her own, there is a difference between that and being able to get a mortgage on your own in your own name.
    Originally posted by Candyapple
    I completely agree with this. My friend had been paying the mortgage in full right from the start and was the main income earner for the family. But changes in the mortgage affordability criteria meant when they asked for a remortgage (below the existing monthly payment level) to buy the ex out they were told 'no way', most banks wouldn't even give them an appointment to discuss the options. In the end the only choice was to keep the ex on the mortgage and take up an offer from the existing mortgage company for a slightly cheaper fixed rate deal, which is still far more expensive than the market best.
    "In the future, everyone will be rich for 15 minutes"
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