Joint liablity for debt from equity of house.

bury_2

I have been watching the streets of debt programme with great interest this week. On one programme they had a woman that had got into debt and owed 45k on a credit card in her own name. She was married and owned a home with her husband. Am i right in thinking that as the debt was in her name that they could only get her half of the equity of the house if required. Because in theory her husband owed them nothing and the credit card was in her name?.

It also made me wonder, If you purchase a property with your partner and have a deed of trust drawn up to protect your deposit would this be legally recognised in the situation above? For example say you had a house now worth 200k, and one party put down 100k deposit with a deed of trust. You then had a mortgage for 75k( price paid 175k). In theory the partner with the debt would only have 12.5 k equity. But say the person in debt was made bankrupt could the owed company take anymore than this as in theory their is 125k equity in the property so half of this would be around 60k.

Would the deed of trust protect the innocent party?

david29dpo

credit card debt is unsecured,they cannot take the house. its always a big mistake to turn unsecured debt in to secured.

bury_2

But what about if you couldn't pay it back and you went bankrupt or and iva agreement. They usually go after the house?.

molotov_3

Credit cards are unsecure, but they would go for judgment against you and then enforce it against your house when you failed toy pay. Bury I dont think your idea would work, if you put money into the property then you have a beneficial interest and i dont think you could give this up. The CC company would try to establish you have a share of the property then enforce against that. But it also works both ways, if you did give up your share then the house could be sold by the other owner without your consent as you would have no share in the property and therefore no right to prevent sale.

HTH

bury_2

I think you have got confused. I am simply trying to establish if you had a deed of trust on a property then any debts run up by the other owner ( without the deed of trust) of the property would not be taken out of your equity. For example the orginal 100k would be safe.