What to do?

nannym_3

Hi - Can anyone offer any advice pls?
My son's partner decided to leave the family home 2 years ago and go live with her parents some 3 hours away. Initially she said that she would cover her half of the mortgage. She then said a year ago that she couldn't afford to pay her half any longer leaving him to stump up as well as pay maintenance for their child.
The mortgage lender has now increased the monthly payment by £100 . The property is in negative equity to the tune of £20,000 so he can't sell or remortgage. He is now financially in dire straits and is tied to a property and lifestyle that has been enforced on him. He cannot move on.
His ex is not willing to help in any way. She is all for 'just handing the keys back' but says she cannot fund any shortfall loans etc. As parents we are at a loss on what to advise and he does not know where to turn...:(

The_J

Bit of a reality check for the ex, she cannot choose whether she pays for any shortfall, she will owe it.

If she doesn't care about her credit rating then there isn't much you can do...

Thrugelmir

Consult the National Debt Help Line a free service.

http://www.nationaldebtline.co.uk/

RenovationMan

The best case scenario would be for your son to sell the house for whatever he can reasonably get and for your son and his ex to take out personal loans to cover the negative equity (i.e. £10k each).

If the ex won't play ball and your son has no significant assets and is probably going to lose the house anyway, he might be better of going bankrupt. He could then walk away from the debt (and the house) and the mortgage company would then be able to pursue his ex for ALL of the money.

Certainly better to have a trashed credit record for 6 years than struggle along and probably still get a trashed credit record 3 years or so hence. Even the threat of going bankrupt could be enough to force your son's ex to help sort out this financial mess.

nannym_3

Thanks All. He spoke to the National Debt helpline last night and they have given him some local contact legal advice numbers -so we'll see how that goes.

mgdavid

I take it they were not married; did they make any official settlement upon splitting up? (if not, why not?)
I've also presumed the mortgage is actually in both names?
where did the deposit come from, was it 50-50?
how big is the house?
does it have a garage?
who else lives there?
can he let a room?
can he let the garage too?
If he hangs in there until the property is in positive equity, will she then claim half of any profit even though she has not contributed recently?
sorry for all the Qs but there's a lot of possibilities...

nannym_3

No, they are not married and they did have a written agreement initially between them which he has kept to. She agreed to pay her half of the mortgage, but has since stopped via a solicitors letter saying she cannot afford it and she has said that because of this she wouldn't expect any claim on any equity, but then that is quite unlikely with a £20k deficit!
The mortgage is in both names and he lives there on his own now with his young child staying periodically.
There was no deposit as this was the heady days of 100% mortgage and as far as I'm aware they had since remortgaged so that she could pay off a chunk of her own debts. I don't think she has ever been particularly good at money management.
The house is 3 bed no garage.
No problem with all the Q's ... any thoughts appreciated.