disputed second charge

pacluc27

My girlfriend and I own our bungalow worth approx 145k. We have a mortgage with Abbey of approx 87k...all up to date with no problems. Unfortunately I got in a scrape through my business and ended up with a finance company getting a second charge through the court, of 23k, and gathering interest. This was NOT money I borrowed, and without getting too involved here, I DO NOT owe this money. I am therefore exploring ways of escaping it, legally of course. The charge can only be claimed against my half of the equity, according to the court, as my girlfriend was not involved in the problem. Obviously many properties get sold with insufficient equity to settle a second charge, for instance when sold at auction after reposession by the first charge lender. What then happens regarding the shortfall? What is to stop me from selling my half of the property to my girlfriend for my half of our mortgage debt, and let the second charge holder do his worst? Any help would be so appreciated.

milliemonster

I'm no expert but, although you may feel for your own reasons that you do not owe this money, the very fact a court has allowed a charge to be placed on your property means legally you do now owe this. I don't think there is anything you can do to escape the charge unless you appeal to the courts with evidence?

All this means is that the second charge is there and you will not be forced to sell, only if you do sell then yes the £23k owed will have to be paid before they will release the charge (plus accruing interest)

Are you now repaying this debt?

Yes the court is correct in that the charge will only be against your portion of equity which is about £23k.

The only way you could sell your half of the property to your girlfriend is to get a new mortgage just in your girlfriends name, but she would probably have to get a mortgage to cover the £87k and the £23k second charge, based on her sole income, I don't think there would be any other way to leave a second charge on the property if it was transferred into her name when the charge is against you.

If the property was repossessed and sold for less than the mortgages on it, they you would both be chased for the shortfall.

Have you taken legal advice?