will I lose my house through husband's debts??

bobbleb

Hi, help needed please????

I recently found out that my husband has massive debts on several credit cards in excess of £20000 and also an unsecured loan of £15000 which he says he cannot afford to pay now (even the minimums).

We have a joint mortgage and have never missed/defaulted a payment since we got it in january 2007.

What I want to know is if my husband goes bankrupt will I lose the house? I have 2 small children who are settled here,go to the local school,and do not feel it is fair on me or the children as I had no knowledge of this and have since separated (all happened over christmas )

I can afford the mortgage repayments on my own so don't see why they would take the house? I cant afford to buy my husband out as already looked into that,

Please help as I really don't want to lose my house so any help would be much appreciated!!

Mouse1812

How much equity is there?

bobbleb

it is in negative as we have 2 loans secured against it.

Mouse1812

Good news, you might not loose it. I'll give full details and info later (got to go out now), do come back.

In meantime can you afford the loans too?

bobbleb

Thats great thanks,will look forward to your info x
:beer:

bobbleb

Yes,just about. At the moment though we have on interest only payments so they are low ,would I have to change that ? If so I can just about afford that.

Mouse1812

If your husband goes bankrupt his “beneficial interest” (share) in the property is transferred to the Official Receiver (OR). The OR has a legal duty to sell your husband’s assets to repay his creditors.

As the house is in negative equity the OR will not waste money on legal fees selling it - the duty is to collect money not spend it.

Bankruptcy only deals with unsecured debt, so the mortgage and secured loans will not be included. The mortgage and loan companies will do nothing so long as you keep making the payments. They don’t want your house, they want their money and so long as you stick to the agreements to pay £x per month there is nothing they can do anyway. No court will allow otherwise.

The OR is not allowed to keep the beneficial interest for ever, and must deal with the property one way or another within three years otherwise the beneficial interest automatically reverts to your husband. So long as the property remains in negative equity, the OR will do nothing, and ownership will come back.

You can however (at any time) offer to buy the beneficial interest back (my wife did). The OR will accept a minimum of £1,000 plus legal costs for this (about £250?). We can help if you ever wish to do this. The advantage will be that you, not your husband will own all the beneficial interest. My wife bought ours back to end the uncertainty and because our repayment mortgage was about to clear the negative equity.

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

edit to add: The relevant chapters from the Insolvency Service's technical manual are here if you want chapter and verse on it, but it can be heavy reading.

HOWEVER

You need to be on guard about what could happen before your husband goes bankrupt. I’ll add another post about this soon

Mouse1812

Before your husband goes bankrupt his creditors might become quite nasty, so you need to be aware of the risks and your rights.

His creditors will try everything possible to get him to pay up. It will start with letters and telephone calls and can become quite stressful. There is nothing they can do at this stage, they have no rights whatsoever and should be firmly told to get lost.

They could seek a County Court Judgement (CCJ). After which a court bailiff may be appointed to collect goods. Never let a bailiff enter your home, they can not force their way in and can only seize goods if they gain peaceful entry. Keep the door and windows locked.

If a bailiff fails to collect the creditors can ask the court for a Charging Order over your home, you must stop this from happening.

All of this takes months to happen, so if your husband goes bankrupt soon, may never become an issue.

If however any of the above starts and causes you any worry do let us know; there are a quite a few on here who are very knowledgeable and helpful. You may also wish to note the telephone numbers of the debt charities in this thread, you can call them for free advice and reassurance.

• StepChange Debt Charity - Website: StepChange Telephone: 0800 138 1111
• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)

Hope this helps, sorry about your news, but I think the difficult time will pass and hopefully your children will not suffer much disruption.

bobbleb

Many thanks for all your information,it is much appreciated.I will look into all of it.

bobbleb

Just a thought if my husband does go through with bankruptcy the mortgage comes out of a joint account ,do I or can I change it into my account solely in my name?

tigerfeet2006

Yes and I would urge you to get your name off any joint accounts you can or you will be linked to yuor husbands BR and that will cause you problems. Though if it is in overdraft the bank may not allow you to take your name off it or close it down until you are in credit.

As the lovely Mouse has suggested ring someone like National Debtline or Step Change so you are aware of all your rights and the implications of your husbands BR on you.