My ex is going Bankrupt, what happens to the house?

djwmcnae82

Sadly, my ex and I split a few month ago. We bought a house in November, we bought 75% and the house co paid the other part which we would have to pay back in 10 years. With the current market the hosue is worth less than what we paid, about 10-15K I think. She was going to take on the mortgage but can not and has said she is going bankrupt. The house will be reposessed (Spelling?) so what I want to know is what happens to the neg equaty? Do I get it all? Does it all go? Do I get half?
Please any one that can tell me and help put my mind at rest as there is a strong chance I will be forced to go bankrupt if I get the whole lot!

(Sorry my spelling is terrible!)

peachyprice

I'm afraid yes, you do become liable for the whole shortfall if the house is repossessed, together with any other joint debts you may have had.

Could you afford to pay the mortgage and move back into the house?

djwmcnae82

Thanks that is what I feared.
I am seeing if the Mortgage Co will let me take on the mortgage on my own and see if I an rent it out. i can not afford to live there on my own or even sharing at the moment due to other debts.
i just ned to look into the renting out in more details to see exactly how muc it will cost me to get it all set up.

thanks for your reply.

peachyprice

Her name won't have to come off the mortgage just because she's bankrupt, if that helps you out.

You should however be given the chance to buy her beneficial interest, which losely speaking means her right to any future equity.

They would offer it to you for £1 + £211 costs, which would mean that even if her name stayed on the mortgage and 10 years down the line there was equity it would be 100% yours, so it does safeguard you if you can't change the mortgage into your name only.

HTH

djwmcnae82

Thanks, thing is it was not the best of splits and i dont think she would want to help me out by leving her name on it... but its an option i can pose seeing as she might well kick me in the nuts if i cant get it rented out!

peachyprice

She won't have much choice, if you can rent it out and keep paying the mortgage, but don't earn enough to re-mortgage in just your name the mortgage company won't take her name off, not even if she begs them.

djwmcnae82

well thats some thing then.... I am planning on seeing a Mortgage advisor next week.. I think if I can get it rented she wont have to go bankrupt any way so would be in her favor.
Thanks again

kippen_noedel

Don't know if it applies in England/Wales but in Scotland you can get a Deed of Release to take over the property. If the lender agrees it would be the simplest and cheapest way to take it into your ownership. Since you'd end up with at least half of the debt anyway, plus a load of extra costs, this is what I'd investigate first. I've used this before for a different reason and only cost me £120.

Just did a quick search, a solicitor, obviously, can give better advice but a comparable thing in England/Wales seems to be a Quitclaim Deed.

djwmcnae82

A deed of release... Can you explain this a little more for me please? What would it mean exactly?

djwmcnae82

Hi people.

After some advice again please.

Basically the situatution as I see it is this....
My ex is going bankrupt... the house is going to be repossed and as it stands there is a 9K NEG equaity on the property... I get all the 9K right? What happens then? Do I just get a letter through the door saying please give us 9K? If the house does not sell on the open market uit would then go to auction right?? This could then make that NEG 9K lots bigger right?

Ok, so bankrucoy... last option? It is not her last option... we could rent that property and make £300 a month profit... she wont as she says she cant trust me??
who can I contact to let them know there is one last option for her before she goes bankrupt?

Pls any one help me, my life is really going to be ruined if i get all the NEG equity from the house, i cant afford to live as it is at the moment with out all of this debt.

Any one that can help in any way, thank you

tigerfeet2006

bumping for you