Letter chasing defaulted sum - ignore or reply?

BlueAngelCV

Tixy wrote: »

If there is insufficent equity to pay off the mortgage and any secured loans then the debt will still be owed and both parties can legally be chased for the remaining amount. It would never just disappear if the property was sold for less.

But the ex used part of the money to buy a new house. Any loans should have been paid off before any funds were released for anything else. How did he get funds for his new house? How much did he get?

It sounds like you are going to have to get in contact with your ex to find out all of the relevant details.

I do understand the wish to bury your head in the sand but with a house sale, loan and divorce there would have been documents to sign and I'm sure that some of them would have referred to the situation.

There's a lesson to be learned here about always paying attention to financial matters such as this but it's a lesson that I think all DFW have learned.

DVardysShadow

BlueAngelCV wrote: »

But the ex used part of the money to buy a new house. Any loans should have been paid off before any funds were released for anything else. How did he get funds for his new house? How much did he get?

It sounds like you are going to have to get in contact with your ex to find out all of the relevant details.

I will back off a little from some what I said earlier. This does begin to look a little fishy. If the property was sold as a part exchange, there would have to be no equity left in it for the lender to come chasing - in which case, why was it taken as a part exchange? Obviously to clear the mortgage and the loan. But if it didn't clear the loan, the why did the builder take it? Obviously the ex extracted some money by not making repayments. But if the house did not clear the loans and the arrears, then I don't see how the deal could have gone ahead. Unless the lender for the £12000 allowed the loan to go unsecured.

The deal with the house does need looking at. Either EHL123 has forgotten something which she knew or some fraud has happened.

ELH123, you need to go back to the solicitor [were they acting for you and ex or solely for ex?] and find out what happened. And you need to get a full Data Subject Access on the lenders files for your loan.

DVardysShadow

DVardysShadow wrote: »

Unless the lender for the £12000 allowed the loan to go unsecured.

Replying to myself here.

Thinking on a bit more. Lender and ex have allowed the loan to go unsecured. The loan has become detached from the assets which were supposed to secure it. If the loan is joint and several, then it is unfair to one party for the lender and the other borrower to allow the loan to go unsecured - ie the ex should not have the sole mandate to make such a fundamental change to the loan and for the Joint and Several liability to stand.

I don't know whether there is law to support this position, but it does look arguable. To me, anyway, but IANAL

EHL123

Sorry I should have clarified - we were not married. The only joint finances we had were house-related. He dragged his feet for two years until he decided the time was right for him to sell (i.e he found a house he wanted, a new build). The builders were willing to do a part-ex which was less than the market value, but enough to clear the mortgage and secured loan, and give him enough money for the legal fees, landscaping his new garden, buying carpets etc (!). I was fully aware that I was being screwed, but it was the only way I could see of getting out of the situation, so I agreed to go ahead - I didn't care about getting any money out of it, I was just happy for it all to be over with. Things dragged on for months because the build of his new house was delayed time and again (I think this is when he stopped paying the mortgage and loan). Eventually it was finished, and in order for the part-ex to take place I had to sign documents transferring my share of the house so it was in my ex's sole name (they couldn't part-ex a house in joint names unless both owners were purchasing the new one, it had to be in his own name). I wasn't keen on signing away my rights to a house whilst still having my name on the debts, but the solictor said it was standard practice and it was all done very quickly. Once I signed the papers, the builders did the part-ex and the solicitor used proceeds to settle the mortgage and loan (or not!). I don't have copies of the actual sale documents because they were between my ex and the builder, so my documents only relate to the transfer of equity part of the transaction. But the solictor was fully aware of the situation, and that I was waiving my interest in the property on the condition that the mortgage and loan were settled from the sale proceeds. I was pretty sure that my ex received cash at the end of it (for his bloody carpets, as per the deal!) which is why it has come as such a shock that the loan was not repaid.

I know the builders paid 104k because I've seen the sale entry online. And I know the mortgage was repaid in full, because my credit file says so (although unfortunately it doesn't give amounts). But the mortgage was originally for 50k, so even adding interest and arrears and early repayment charges, it wouldn't have been anywhere near 104k - there should have been more than enough to repay the loan. I can understand if it was only a small balance outstanding, maybe for charges or fees the lender added after the sale, but a 17k balance for a 12k loan?! Something has gone amiss. And the letter states 'the proceeds from the sale of the security property were not sufficient to meet the outstanding liabilities, leaving a balance of 17k'. So that suggests that part of the balance was paid, in which case it was even higher than 17k. I really do not understand how.

I realise I am legally liable because I signed the loan papers, but at the time I was not in a position to refuse anything my ex wanted - he wanted the loan, so I signed the documents, no option. Shortly after he put me in hospital, after which I moved straight up to Scotland to be with my family, and have never returned. After I left, I only dealt with him via the estate agents, and later the solictor. Even when the sale was going through, the solictor was under strict instructions not to give him my new address. He is a nasty peice of work, so I have no intention of contacting him now - it's not worth it, regardless of what happens to my credit rating because of it

I think I'll contact the lender and tell them I was under the impression the loan had been repaid from the sale proceeds, and the fact that I've no contact from them supported this, and ask for a statement so I can see what has happened. And I know how much it sold for, so if I can find out what the final mortgage balance was, I'll be able to see any discrepancies. If I find out that my ex received cash from the sale without the loan being settled, I'll have some serious questions to ask the solictor!

EHL123

Just to update really, I decided to email the solictor last night asking for a breakdown of the sale figures, rather than contacting the mortgage lender first. I don't know whether they'll provide them, as technically the sale wasn't in my name, but seen as I'm asking about loans that were in my name, they should at least be able to give me information about what was paid etc.

I also had a lightbulb moment whilst out walking the dog this morning, which may go some way to explaining what happened.

The house was originally on the market for 140k. If it had sold at that amount (and it had a lot of interest), it would have been plenty to clear the mortgage and loan, and provide us each with a sizeable desposit for our new homes. Out of sheer spite my ex did his best to sabotage any viewings and dragged things out for as long as possible (he knew I needed the money to buy my own place), until suddenly he found a house he wanted and it was all systems go. The first I knew about this was a letter from the solicitor (not the estate agent) asking me to contact them to discuss an offer on the house. It was explained to me that my ex wanted to purchase a new build, and because our property had been on the market for so long they were willing to 'take it off our hands', basically so he would be chain free to purchase their new build. The catch was that they were offering well below market value. The part-ex/purchase would cover his 10% deposit on the new place (about 20k I think - leaving him 180k to get a mortgage for) plus 104k in 'cash'. From what I remember, this was more than they wanted to pay, but my ex had negotiated with them to ensure there was enough money to clear the mortgage and loan, and give him a few thousand to make the new build liveable (carpets, garden etc). It meant I would receive no money from the sale, but it would be done with. So I agreed. From searching online I can see that the house was sold again a few months later for £138k, so the builders made a tidy profit out of it too.

But now I'm wondering if the 104k figure included his deposit. I.e. 20kl was paid straight back to the builder, only leaving the solicitor 84k to clear the mortgage and loans? Even at that, there should have been enough to clear both - but of course the final redemption figures would have been bumped up by all the arrears that mounted up between the builders making the offer and the purchase actually going through. As both loans totalled about £900 a month, it's possible that this created enough of a shortfall so that the loan didn't get repaid in full (and my ex wouldn't have received his carpet money afterall!). But I still can't see how it could be 17k. And surely the solicitor should have told me this before I signed the transfer papers? I only signed a few days before the sale completed, so it's not like months passed. They knew it was conditional on the loans being cleared.

Just thinking aloud really, but something doesn't add up.

woody01

Sorry, but you are just as liable for the outstanding balance as your ex-husband. Sending letters to deny this will make no difference.

The creditors will chase either one of you, and the first to get caught will be liable.

I have my own house and family to keep now, without parting with my hard earned money to repay his debt.

If you do not attempt to repay, they will get an attachment to your current property. It is still your debt as much as his.
I cannot understand why you say it is just his debt. The law will not see it that way.

pixiechick_2

woody01 wrote: »

Sorry, but you are just as liable for the outstanding balance as your ex-husband. Sending letters to deny this will make no difference.

The creditors will chase either one of you, and the first to get caught will be liable.

Ignore this poster - he's nasty and just out to cause trouble

DVardysShadow

EHL123 wrote: »

... Just thinking aloud really, but something doesn't add up.

No it does not add up. Someone has pulled a fast one here. You need to get in contact with the solicitor to get a statement of account for the proceeds of sale. Was the solicitor the builder's recommended solicitor?

moneypenny2k

Awful situation, Never easy when people break up but to be left like this sucks. I can't really add to this except to say the solicitor had a duty to ensure that you knew your position and if things were not being repaid. PROVIDING he was working for your or both you and your ex. If the solicitor was only working for your ex then it's much more murky and I'd ask the law society to look at it.

Have you got a copy of the bill for services rendered by the solicitor? that should clarify if the loan was repaid or not. Did you get a copy of this at the point of sale? Did you keep your paperwork?

EHL123

The solicitor was recommended to us originally by the estate agent as their preferred conveyancer, so my ex decided to use them to deal with the part-ex. So although he arranged it, it was a firm recommended to both of us at the start and I don't think they were in any way dodgy.

I've had an email back from the solicitor to say she no longer works for the company (the email address I have is just a btconnect one) but will forward my email to the senior partner who will reply to me as a matter of urgency. So at least I might get somewhere with him.

I made it very clear that I would only go ahead with the deal if it meant all the debts being cleared. Otherwise it would have been better for me to hold out for a sale through the estate agent, at least then I would have got something out of it. Something has gone wrong somewhere along the line - my ex still got his nice new build house and a whacking great debt was left against the old - I just don't see how that can happen. Why would London Scottish release their charge on the property if they knew 17k was still oustanding? It's not a small shortfall, it's more than the original loan was for! And why would the solicitor let that happen? It just doesn't make sense to me at all. Once the senior partner contacts me, I think I'll request copies of all documents they have relating to the transactions, including letters back and forth and the solictor's notes (am I correct in thinking I need to pay £10 for this under data protection rules?). And then I can contact London Scottish once I know what happened. Hopefully they've just got their records wrong and there is no outstanding balance (clutching at straws here!).