How can I calculate my ex's beneficial interest to buy it?

lauraashton

In Oct 1998 my husband and I bought a house together on a shared ownership (50% owned by a housing assoc and 50% on joint mortgage with Abbey). I paid the initial deposit of about £3000 (as far as we can remember). We initially paid both our wages into a joint account so made equal contributions to the mortgage & rent at that time.

He moved out in Dec 2001 and as part of his court agreement to move I lent him £1,000 as a deposit for rented property. The court papers state this will be repaid to me if/when the house is sold. (Plenty of other money has flowed from me in his direction over the years but is undocumented apart from when I once paid his rent of about £500 and have a paying in slip to prove it.) I suspect the mortgage and/or rent was propbably in arrears when he moved out and I have asked the lender for details as I would have paid the arrears off myself.

Since he moved out in Dec 2001 he has not contributed a single penny to anything and all rent & mortgage and maintenance, repairs, utility bills etc have been met by me. I do not have another partner or boyfriend at all.

We were married in 1997 but we have never divorced so are officially still married. We have one 11 year old daughter who lives with me.

My husband was declared bankrupt over a year ago and the trustee (BDO Stoy Hayward) did a drive by valuation and valued the property at £190,000. I'm in the process of obtaining other valuations as I believe this is a bit too high and their valuers will also come back to do internal valuation later this month.

After deducting the 50% due to the housing association, the mortgage etc the trustees have asked me for £19,000 to purchase his BI which they have assumed is 50% because they don't know about any of the other circumstances.

I have enquired with the mortgage lender who will not lend me anything more as I am currently on income support and have some small arrears. I could clear these arrears but that seems a bit pointless if the house is then reposessed by the trustees.

Obviously since he hasn't made any contributions over the last 7/8 years he is not entitled to 50%. He is also in arrears for child maintenace which is being dealt with my the CSA as an attachment of earnings. He doesn't own anything else of value - not even a car. We didn try to reach agreement between ourselves that he would sign the house over to me if I would drop the CSA claim but actually was already bankrupt (!) when he said this so it wasn't his house to offer!

Question 1 : Can I charge interest on my loan of £1,000 from 2001 to date?

Question 2 : Given all these circumstances how can I possibly calculate what his percentage of beneficial interest should be when negotiating with the trustee to purchase it?

Question 3 - would I be more successful going direct to the OR than a firm of (IMHO money-grabbing) accountants who are the trustees?

Question 4 - I have got about £3,000 available and I am unlikely to be able to find more than £4 or 5 k in total - I would have thought them unlikely to accept such a low offer but I do want to put it forward - how can I convince the trustee/OR? It's quite a big drop from their initial £19k to £3!

Any other advice and a little assistance with drafting my letter to the OR would be greatly appreciated as I am having lots of difficulty finding an insolvency solicitor in my area who offers legal aid the CLS only list CABs. I did speak to one solicitor who was very knowledgeable but his fees are over £200 an hour.

debtinfo

1. not really
2. Take the total equity divede by two then minus of the sum of what his half of the payments would have been over the last 8 years. then offer what is left. this should be your opening offer.
3. No the trustee has been appointed and they deal with the assets
4. make the offer and show how you have worked it out, make it clear what the circumstances are.

hope that helps

lauraashton

After posting that I did some calculations based on the relative time we'd spent there....

We'd had the house 11 years and 5 months, contributed equally for 3 years and 2 months, I'd done the rest for 8 years and 3 months. In other words based on the relative time we'd spent contributing : I'd made approx 72% of payments on my own and together we'd made 27% so therefore his beneficial interest might only be 13.5% and therefore in the region of a much more realistic £5k.

I think I am really going to struggle to pin down exactly what I have paid over the last 8 years what with changing interest rates (at one point the interest rate was 6%) and occasional arrears and charges etc. but I'll try requesting that from the lender and the landlords.

If i use your calculation at today's repayments of £339pcm x 96months (8 years & 3 months) then I've contributed a staggering £32,544 for the mortgage and rent of £25,920 - that makes a total of £58,464, of which he should have paid £29,232.

Assuming house valued at £190,000, half belongs to housing association so then £95,000 left, outstanding mortgage is approx £42,000, that leaves £53,000 to split between us - take off the debt of £6000 he was made bankrupt for leaving £47,000 to split between us and our equity is £23,500 each.

Then I deduct what he should have paid £29,232 from the £23,500.... and now what??? The trustee ought to be paying me???

SOMEONE PLEASE CHECK MY SUMS!!!

Also the £1,000 loan.... do I count that before the division or after? I hope after as it is going to make a bigger difference that way and it is to be paid out of his interest so if before it would reduce my interest. I had some professional advice from a solicitor who seemed to suggest that if the documents from the court said "it is agreed that" then I couldn't charge interest but if the wording was "it is ordered that" then I could. Anyone???

Apparently the fact that I paid the initial deposit needs to be taken into account as well and I'd like to know how to factor that in also. I'm waiting for confirmation of what percentage of the original price I paid as a deposit.

peachyprice

lauraashton wrote: »

i think i am really going to struggle to pin down exactly what i have paid over the last 8 years what with changing interest rates (at one point the interest rate was 6%) and occasional arrears and charges etc. But i'll try requesting that from the lender and the landlords. you should be able o get copies of your annual mortgage statements that will show amounts paid and amounts of interest charged

apparently the fact that i paid the initial deposit needs to be taken into account as well and i'd like to know how to factor that in also. I'm waiting for confirmation of what percentage of the original price i paid as a deposit. did your solicitor issue a deed to that effect when you bought the house?

hth................

debtinfo

Hi, both of those calculations sound pursuasive to me. There is not set standard way to work these things out that i know of. But if you put both of these calculations in your response to the trustee it will show your point. It is not that importnat at this time to come to an actual figure what you are doing is showing how grossly unfair it is to split it 50:50 and the first step is to get them to accept that your interest is bigger than his. After that you can get down to the nitty gritty of negotiating an agreement

lauraashton

I presented all my calculations to the trustee but they asked for (unreasonable) evidence like proof that I paid the deposit when the mortgage was taken out over 10 years ago. Bank are unable to provide anything beyond 7 years & mortgage account doesn't have this detail.

I have now received a letter telling me that the trustee will only give me credit for half of the capital contributions I have made from the date when my ex moved out up to the date when he was made bankrupt. I don't lnow why this is but it seems grossly unfair. They are still asking for £15k to purchase their beneficial interest which is out of my reach.

Can anyone give me any advice please?
Would a judge be able to rule on this?

silvercar

In divorce situations, where one party has moved out and the other remains in the marital home, the person remaining in the home is often the one who is expected to pay all the interest (not capital) on the mortgage as (a) the other person has rent to pay elsewhere and (b) the person remaining has the "enjoyment" of all the property. Another way of looking at it would be that the person leaving could get a lodger in their place to pay their "share" of the rent.

Obviously, its not suitable for all cases and children are a complication to the calculations, including his responsibility to pay towards a home for the children, but that can be the basis of the arguments.

The fact that you haven't reached financial settlement on the divorce adds to the complications on his bankruptcy. If you had done, then the calculation of the BI would be easier.

Not what you want to hear, but a possible explanation to the OR's response. Sorry not to give a more positive response.