Bankruptcy,redundancy and joint mortgage?

deepintrouble

Hi all,

I'm currently on a DMP with CCCS to try and pay off my own debts of around £60k (I know, stupid). However it looks like I may be made redundant in the next couple of months so any payments to this will be seriously reduced. I won't get much of a redundancy payout as I've only been in the job a couple of years.


I'm looking at going BR and have a couple of questions if you don't mind.

I currently live in a house that is jointly owned with my ex wife. I live there with my current partner, it is in neg equity and I would like to include this in the BR if possible. How would I do this? I have no interest in keeping the house, it is a millstone round my neck at present.

I know it would have an effect on my ex, and if I'm brutally honest I don't care. I assume the bank would come after her for the whole monthly repayment once I was BR? However, if she were able to pay this would I still be on the mortgage? I don't want to be as me and my partner want a fresh start if possible without her interfering.

Also, part of the mortgage is endowment based. I assume that this would be taken by the OR to pay off some of my debts, pushing the house further into neg equity. Would the OR take all of the endowment or just my half (it is in joint names, myself and the ex).

Thanks in advance.

Sunnylooloo

Hi

Just giving you a bump as not really too sure on it all myself (I know you are on a DMP with CCCS so assume you have taken advice on your options?)

With the house I am assuming the lender will pursue your wife as you are jointly named. However I am not too sure how things will work, ie the fact you are in negative equity and you do not want to stay living there.

I will be interested in hearing the answers as I am in similar situation (although we have equity in the house) and one thing that worried me was the effect it would have on my ex (although we barely speak - I personally didn't want to drop him in it - although not sure he would feel the same way if tables were turned)

Good luck

deepintrouble

Thanks for the bump, my real worry here is that she (the ex wife) will go to her rich parents and simply pay the mortgage on her own. She doesnt have a big enough income to take on the mortgage on her own, but could probably continue to pay it with my name on the mortgage and the money coming from her parents every month. That way I'd never be free of her?

JCS1

Secured debt such as mortgage is not included in BR. But, if you did a voluntary repossession or the mortgage company went to court, the debt becomes unsecured and you would not be liable if you were BR. In that case the debt would pass in full to your ex.

Sunnylooloo

It is horrible feeling you will never be free.

As you don't want to stay in the house would it not be better if you and your partner thought now about renting?

Does the ex pay anything towards the mortgage?

Are you and the ex actually divorced and reached financial settlement?

Just asking as in a quite a similar position - still going through divorce.

LL

deepintrouble

JCS, I understand about the voluntary reposession and the debt then becoming unsecured. However this surely requires both parties to agree to vol repo? My worry is that she wont agree to it. What happens then?

LL, we are divorced and there has been no financial settlement as there were no assets or children. The only thing tying us together is the house that is in neg equity. She does pay a portion of the mortgage at present.

Sunnylooloo

Ok I'm not too sure how it all works as she is paying part of the mortgage, I know as it stands with me and my ex he is entitled to Occupational Rent (and he pays nothing towards the mortgage) but as you are already divorced not sure how that works. I will not get divorced until our finances have been finalised.

Did you say you had already sought advice on this? (I know you have a DMP with CCCS have you spoken with them or CAB or National debtline as I think there are lots of things that need to be addressed here)

If you say you don't care if they chase your ex on this wouldn't it be better for you and your partner to move on and rent somewhere, decide on your next course of action and if it is bankruptcy then leave your ex to deal with it? Not sure how you go about getting your name off the mortgage (again someone will hopefully be along soon with a bit more advice) Also maybe somone can help with this but would your ex wife be offered to buy the BI in the house? I think there are lots of factors you need to consider.


I'm really not sure about the endowments as I assume they are in joint names so neither of you can cash them without the other's permission?

Sorry again not really helpful from me, but it gives you a bump up for a clever person to help!!

LL

peachyprice

deepintrouble wrote: »

I assume the bank would come after her for the whole monthly repayment once I was BR?

No, they would still expect you both to pay unless neither of you want the house and allow it to be repossessed.

JCS, I understand about the voluntary reposession and the debt then becoming unsecured. However this surely requires both parties to agree to vol repo? My worry is that she wont agree to it. What happens then?

If your ex keeps the house but cannot remortgage in her own name you will stay on the mortgage, going BR will not change this, even if she buys your beneficial interest from the OR for £1. You would never be liable for any shortfall if the property were ever repossessed, this is the only protection BR is going to give you.

Could her parents re-mortgage with her in order to get your name of the mortgage?

deepintrouble

So basically the consensus so far is that I'm stuck with it/her until it sells?(which is likely to be never at this rate)

Her parents probably couldn't re-mortgage with her as they are retired and whilst their income is better than most, I doubt they would want to get into such a situation.

I think that if my job goes down the toilet, we'll probably move out and rent somewhere. After that I'll go BR and stop paying the mortgage. Hopefully that will cause enough of a fuss that she agrees to take my name off the mortgage.

One factor that I didnt think of is her job, last time we spoke she was still working in financial services. If this is still the case it may influence her actions on whether she keeps me on the mortgage or not. However I still wouldnt put it past her to keep me on it out of spite.

deepintrouble

Guys, I hate to resurrect an old thread, but redundancy is looking ever more likely. Does anyone have any further thoughts on this?

Thanks.

beentheredonethatstilhere

deepintrouble wrote: »

Guys, I hate to resurrect an old thread, but redundancy is looking ever more likely. Does anyone have any further thoughts on this?

Thanks.

As has been said you will just have to move out and stop paying the mortgsge and go bankrupt and leave her to it. If she can't afford to pay the mortgage it will get repo'd eventually. If the co. hassle you then just provide them with a copy of your bankruptcy order and they will more than likely go hassle her.

The mortgage co. will not take you off the mortgage unless she has the money to remortgage in her name which by the sounds of it she hasn't.

I think you just have to get on and do what is right by you and don't worry about anything else.