Advice please - separated from almost bankruptee , what happens to joint property?

nuts_about_catz

I hope Im in the right area - cause Im not too sure where I should be or where to start. Long story short , my husband and I put our house up for sale about 3 years ago and after moved into rented accom so the sale could go through quickly.. only to discover that the sale had fallen through . Basically that was the icing on the cake and we separated. He moved back into the old house and to keep costs down shared the house with a friend and his pregnant wife. There was a flood in the kitchen , and whilst repairing the kitchen the engineer condemed the boiler. understandable the other couple moved out and the x was left with a house he couldnt really afford on his own etc etc. He struggled to keep his head above water and contacted the mortgage company explaining the sittuation and to arrange a payment holiday. They said no so he stopped paying and moved out ! This is where it affects me , The correspondence for the house comes to this address as it was where we moved to when the house should of been sold, he kept telling me not to worry that he had it all under control, turns out he didn't and I received a formal demand yesterday asking for 120,831.72 . It turns out that he is in a serious amount of debt and had the sense to contact cccs who suggested he look at bankruptcy , I am now rather concerned that the bank will come after me for this £120 000 and expect me to pay for it all whilst he goes bankrupt! The property is now in negative equity and has no boiler, making it rather hard to sell . Some mad couple have contacted my x and are interested in fixing up the house and renting it from him , they would fix it up in lieu of paying rent for a few months whilst signing a 5 year lease paying rent equivelent to the current mortgage payment. He has asked the mortgage company if they would consider a payment holiday with this offer on the cards instead of repossessing the property but they are still not interested!!!!!!!!!!!! Which baffles me as surely in a few years the market will get better , the house will be fixed and although the mortgage might currently be in arrears surely its a better option than repossessing the house. So any ideas where I go from here ?

miss_spooky

Hi nuts about catz,

A lot depends on what you want to do.

First, how many joint debts do you and your ex have?
Are there any secured loans or charges on the house?

If your ex does go BR can you afford the payments on the property if you were to move back in & give up rented property.

If he does go BR, then the liability of ALL your joint debts will fall to you. But there are many senarios regarding the house that can be explored to help you with your descisions.

For a more detailed response from the BR side of things you would probably be wise to pop this thread over on the Bankruptcy & Living with it board.

x

nuts_about_catz

Thanks Miss Spooky.
To be honest I would rather have it repossessed than move back to that house I know it sounds awful but I have too many bad memories plus I dont want to up and move the kids and cats again , thay have had enough to deal with . Financially I only have a small credit card debt and other than the house we have no other debts between us and to the best of my knowledge there are no secured loans or charges on the house.
I expect that my credit rating will take a serious nose dive now too which I guess is the least of my worries:rotfl:

I am worried that if he does bankrupt , and the house is repossessed that I'll have to become bankrupt too. (unless I win the lottery tonight!!) Do you know anymore about the explorable senarios regarding the house that I could look into and my last question ................... how do I move this thread over on the Bankruptcy & Living with it board.
Thanx again

miss_spooky

Hi ya,

To move, just copy & paste above link from web browser into a new thread on BR board. Just put a quick note saying that you've moved this from DFW board for better response.

The other senarios I could think of depended on whether you wanted to keep house or not. As you don't then what will happen is that when it is repossessed the shortfall will fall to you if OH does go BR.

What I will say is DO NOT SIGN ANYTHING regarding the repossession. Your rpobably best to send a letter saying that it is empty & that you both want it repossed. Sign but put lines through sig as it has been known for mortgage companies to scan up sig and put them on fake letters then claiming that you did sign liability letters.

If either of you do sign letters from mgt co & you both do end up going BR then you will STILL be liable for the short fall.

You will need to let OH know this. (If you want to)?

DarkConvict

The BR forum is indeed your best hope - http://forums.moneysavingexpert.com/forumdisplay.php?f=136

Simply joint debts become your liability.

Since he is going BR, what may happen is all assets he owns are liquidated. As such the house would probably be sold and used to pay the mortgage. The shortfall still owed would be owed soley by yourself.
Banks have a reputation of under selling, so you would need to get some valuations before it is sold. Also proof that you made an offer to pay the mortgage via this 5 year rent. Because i read on national debtline it goes against the bank if plans were in place, i.e. you had a sale for £180,000, bank said can't wait, repossessed and sold at £160,000.

Houses are however a tricky subject, and something else may happen instead.

nuts_about_catz

Miss spooky :I have replied to you via the other forum , Im not sure if you get a notification when someone replies to you - I dont as im confused :-) Im not sure what you mean by "If either of you do sign letters from mgt co & you both do end up going BR then you will STILL be liable for the short fall" as I thought that when you went you go bankrupt the shortfall on the mortgage gets written off ??
Dark convict : The house is in negative equity , although I pressume this , no one has actually told me it is , so I think its more of a debt than an asset. I had also read about the " keep copies of correspondence " whilst reading through the other posts. Iv gone off banks ... they are evil and sneeky !!

nuts_about_catz

I cant find the reply I sent you on the other forum Miss Spooky - I think its time for a tea break before I go totally bonkers x

DarkConvict

Question: If my house is sold sometime after the bankruptcy order is any shortfall on the mortgage still a debt in my bankruptcy?
Answer: A debt which is secured by a mortgage or a charge on a property is still a provable bankruptcy debt. The mortgage loan company is "a secured creditor" which means they have rights over an asset, the
house, and can require the asset to be sold to pay their debt. These rights are not affected by the bankruptcy.
On the making of a bankruptcy order the mortgage loan company could
make a claim in the proceedings but, unless it wished to give up the security, could only claim for any (estimated) shortfall.

If you continue to live in the property it is likely that you will continue to make payments to the mortgage loan company to avoid the property being re-possessed. When the property is eventually sold any
shortfall to the mortgage loan company is still a provable debt in the bankruptcy, even if you have been discharged, as you are released from the debt on discharge.

Your bankruptcy does not affect the obligations of any joint owner who has not been made bankrupt to repay the mortgage loan debt or any shortfall, as they are still liable for the whole of the debt.

After the date of the bankruptcy order the mortgage loan creditor may ask you to sign a "deed of acknowledgment" of the outstanding debt. If you have signed such a deed the mortgage loan creditor can take action against
you to recover any shortfall following the sale of the property.

You may also find it helpful to read the Insolvency Service publications titled 'What will happen to my home'

http://www.insolvency.gov.uk/faq/faq.htm#18

nuts_about_catz

Oh dear It doesnt look good for me does it , Im about to get lumbered with a BIG BIG debt