Daughters husband taking out IVA how will this affect her house?

Chickenbrain2009

My poor daughter has been married two years and just discovered her husband has racked up massive debts. These debts have been taken out solely by him, she has not been a joint signatory. She did not even know about it until three days ago!
Since she has married her new husband has been paying half the mortgage, but he came to the marital home with no previous property. She is panic stricken that as he is now taking out an IVA they will force her to sell her house, her only asset. I maintain that they can only claim against his share of the equity gathered over the last two years. What is the legal situation in the circumstances? She is a single parent with a child from a previous relationship.:(

dancingfairy

Hi- I would suggest that she gets in touch with National Debtline, CCCS (Consumer Credit Counselling Services) or pops into her local CAB in the first instance - if she needs mor especialist legal help hopefully they can advisere her where to go but off the top of my head there is a scheme called something like Comunity Legal Service which helps people on low incomes etc with free legal advice but the debt charities should be the first port of call.
Normally in IVA I believe you are required to release equity after a certain number of years but I am unsure how that works when one person is going for an IVA with a jointly owned house.
Also I would see if your daughter can make sure her husband gets proper free, impartial advice from one of the charities I have mentioned above as just phoning a company you have seen advertised on the tv/in the paper is not always the best idea - the charities will advise whether an IVA genuinely is a possible option or not- there are some unscrupulous companies out there who will flog whatever makes them money and is not always in your best interests.
df

adfax

Hi - don't panic. Your daughter won't have to sell her house whatever happens.

The worst case scenario is as follows:

Part way through the final year of the IVA a valuation will be made of the house. At that time, your son in law will be asked to release his share of equity to pay into the IVA, but only if the following conditions are met:

1. They only expect you to mortgage to 85% LTV - which more or less equates to them not being interested if you have less than 15% equity in the property. For example, if the house is worth £100K, and the mortgage is £85K or more, then they won't be interested.

2. They are only interested in your son in law's share - normally 50% - so they would only take half of any equity over 15%.

3. They would only take this if this amount was more than £5000.

4. If all of the above conditions were met then you son in law would be expected to raise the funds to release his share. This may be throw borrowing from friend / family, or through a mortgage. Given that he is in an IVA it is highly unlikely he will be able to extend the mortgage, and it is equally unlikely that he will be able to borrow it from friends or family. He will have to show he has tried though - I believe two refusals is the norm.

Also, there are various condition about the maximum that the mortgage payments can be and / or how long it can last - I don't have the details to hand.

5. At this point, the normal thing to happen is for the IVA to be extended for a further 12 months.

At no point is the house threatened.

The reason I say 'worst case' is that you indicate that your daughter may have have put money into the house (you say that her husband didn't come into it with a property) ... sorry if I am reading too much into your comment. However, I don't know for sure but if your daughter could show that she owns more than 50% of the property (eg she put down a significant deposit with money she had before she married), then it may be possible to argue that she owns more than 50% of the property and therefore he is not entitled to a full half share. As I say, this is purely speculation, but if I was in her shoes I would try to argue this!

Good look, and don't panic.

Chickenbrain2009

She owns something like 90 odd per cent of the equity, when they married two years ago he started paying half the mortgage but that is all he put in it. So it would be something like 10K IN TOTAL

Charco_2

Does his name appear on the mortgage agreement?

If it does then your daughter may have a fight on her hands but it's winnable!

Basically, as described above by Adfax there may or may not be equity for your SiL to release... but if there is equity, your daughter should stick to her guns and insist that 90% of the equity is hers! The situation sounds entirely reasonable but she may have to show some paperwork to show that her ownership of the house (and therefore equity) pre-dates her husband...

tiff

She's not a single parent any more as she is married.

Chickenbrain2009

I think she may be going back to being a single parent again at this rate!

We want to make sure any agreement protects her interests. She has rung helplines but it really needs someone to look at the paperwork. We may have to pay for this but we want someone who is on her side.
Grateful as to who you would go to who understands debt problems.as this is all new to us, and above all we want to make sure she will be OK. She did go to citizens advice once for something else but wasnt impressed, we know you would get asolicitor for legal problems but who is the equivalent for this sort of financial thing, someone who is not trying to sell her anything etc, just good experienced advice about how the system works and whether she will be OK or what the implications are if things go wrong etc.:(