New baby on the way, partner has major mortgage shortfall debts, advice plse!

Trig13

Hi everyone,

I'm after some advice please.. I did enter a post on the bancruptcy section of the forums a while back, but I think I was jumping the gun slightly!

Anyway, any advice gratefully received...

I'l kick off with my situation. I've got a fairly good income, £33k and a mortgage on my own home. No financial issues/debts, so my credit rating/history is good.

I've been with my partner about 18 months now. We currently live apart (she rents a house), but we've recently found out that we have a baby on the way, so the plan is for her to move into my house.

However, my partner has some major financial issues.. Before she lived with me, she lived with her ex and they had a hefty mortgage. They actually ended up re-mortgaging the house, however after this they split up. Very nasty break up - quiet complicated, but to cut a long story short, her ex refused to sell the house and the advice my girlfriend was given was to stop paying the mortgage and this would finally bring things to a close as her ex would be unable to keep up the large mortgage payments on his own.

(this seems crazy advice to me, however I'm not legal/financial expert. I know the situation between the two of them was very nasty (police called to house, etc) so it may be that this was the best/only course of action available in a nigtmare situation.

Antway, my girlfriend followed the advice, even attended court with her solicitor and explained t mortgage company why she wanted it repossessing - and it was finally re-possessed. The whole situation took ages - she went to court last autumn and the house has only recently been sold.

My girlfriend hasn't heard from the mortgage company since then - however suspects the mortgage arrears (due to negative equitity, missed payments and re-mortgage will be around £40k. This will be a joint debt between her and her ex - although I can't see him paying anything towards it.

My girlfriend is also on a good income (around £32k), but obviously has this massive debt handing over her.

My house is tiny... would idealy like to move to a bigger house when the baby comes along. Appareciate her credit history is severely damaged now so would have to be a sole mortgage in my name. I havent got a problem with this, but difficult to really plan/budget when we have her debts hanging over her.

She's been advised by someone to not contact the mortgage company and wait for them to contact her.... I guess it just leaves a lot of uncertainty - especially with the baby on the way!

My personal thought is to contact the mortgage compay asap, work out extent of debts - then at least we can judge if something like an IVA is the right course of action for her?

Also, with her debts - shoud I be able to avoid my own credit history from getting damaged as a result?

Any advice and feedback gratefully received - it's really on my mind due to impending baby!

Sorry for lengthy post.

PNPSUKNET

you need to ensure all accounts are seperate, inc joint bank accounts and you should be fine. It would be worth asking how much is owed, as these things dont go away

Little_Miss_Winner

Hi There,

Not a financial /mortgage / lawyer or anything...

My girlfriend hasn't heard from the mortgage company since then - however suspects the mortgage arrears (due to negative equitity, missed payments and re-mortgage will be around £40k

Would it not be simpler at this stage to apply for a Credit report for herself from Experian to see just what the outstanding debts are on the mortgage ? I think i would be inclined to do this first, so she has some sort of idea about the amount outstanding.

Just my two-'penneth worth.

Hope others come along with advice for you shortly.

GOOD LUCK!! and CONGRATS on the Baby !:T

Tixy

Hi

Just to check - I assume that your partner and her ex were not married? (as this could alter things significantly financially).

Mortgage shortfalls can be chased for 12 years and I would say that these days there is no chance that they won't be chased for whatever the shortfall was.

I too would think she probably needs to contact the mortgage company. As you know she would be legally responsbile for the whole debt (as would her ex), not just liable for 'her half'. And usually they come after both but focus on the person most likely to pay - that sounds like your partner in this instance.

You could try looking at her credit file to see whether the debt is listed on there. Or if she knows what was owed on the mortgage originally she could look up how much the house sold for after repossesion - you can look this up for free online at various places, I use ourproperty.
Of course this will only give you a vague starting figure as you will have probably a few thousand in charges, auction fees etc to add on.

But I think you need to know what you are dealing with to start planning moving forward (and to see if moving is feasible at the moment).

As already posted, ensure you have no joint financial products and your rating will be fine - don't even put her name on utilities etc.

Sounds like things are on a very bad footing between partner and her ex but I would say if possible its worth her trying to keep track of where he lives works etc. Then she could at least help the mortgage company go after him as well, possibly meaning she won't have to pay the whole debt.

She probably knows all the things on this factsheet but might be worth a read just in case.
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=11_mortgage_shortfalls

Trig13

Thanks for the advice all.....

She looked at her Experian report a few weeks back - it didnt really show the full amount outstanding - however it did show that there had been a default on the mortgage...

I'm guessing that the mortgage company are calculating a final sum after all the other charges...

I guess I'm just keen to know what we're facing - and then we can move on and deal with it - whether it's some kind of payment plan or an IVA..

I guess from a really selfish point of view I'm also concerned that debts resulting from her previous relationship and partner may have an impact on the standard of living we can provide to the baby if that makes sense?

Thanks for the advice re my credit rating too.... re-assuring knowing that it won't effect me providing I keep everything in my name.

Thanks again all for all your advice - very much appreciated.

Trig13

Tixy wrote: »

Hi

Just to check - I assume that your partner and her ex were not married? (as this could alter things significantly financially).

Yeah - they were unmarried.

PasturesNew

Every day, week, month interest will be added on too. It doesn't stop when the auction hammer goes down and the mortgage company add up the sums.

Trig13

Thanks.... That's worrying... I dread to think how much it's running at now then!

Am I right in thinking that the only ways to "stabalise" the date would be a debt payment plan, IVA or worst case scenario, bancrupcy then?

bouncydog1

Before you go down any routes like that, I think your girlfriend should contact the mortgage company to establish precisely what is owing and try to reach some arrangement with them.

She should also identify any other debts that she has and then as others have said, try to come to arrangements to pay.

RAS

Trig

Your GF needs to speak to one of the debt charities and discuss her options. http://www.moneysavingexpert.com/loans/debt-help-plan#help

Trig13

Thanks all, really appreciate all the advice.