A complete financial nightmare!

Nursey1984

This is a bit of a long nightmarish story but ill make it as short as can.
A girl met a boy and got married and bought a house, boy was terrible with money and ended up going bankrupt,girl got an IVA to clear up her side. Girl realised boy was a nightmare so separated.
This comes to now.... I live in the house that we co own (he has recently been discharged from bankruptcy so official receivers still have a beneficial interest in the house).
We want to get divorced but he is not happy to remain on the mortgage. I have paid this on my own for the past 18 months and in a much more stable position now, and have a new partner with a good income and good credit rating, however I am fully aware that I will not be able to remortgage and get this mortgage on my own.
I am completely at a loss as what to do from here or even who to talk to. I have two children and want this house to be their home as its what they have always known. I work full time and have a decent income.
So, for one, who do I need to speak to? 2) will the official receiver just let him come off the mortgage like that, and would they still have an interest? (There is no equity in house now)
3) can I get a mortgage in an IVA? Should I speak to insolvency practitioner about situation) 4) what exactly are my options?
Please help, am totally at a loss
Xxx

alastairq

hi...welcome...

to be brief, if the house is in zero or negative equity, then the OR's interest will revert back to ex.....usually after 3 years.


However, it might be worthwhile contacting the OR and making an offer to buy the OR's interest for a nominal sum [I have read on here, around £1000 plus costs is usual?}

If this happens, your Ex will no longer have any claim to any equity in the property.

The fact that his name remains on the mortgage is really neither here nor there...aside from the financial link to a BR...but since you have an IVA,that really doesn't matter.


Mr Mouse-of-this-parish might pop along at some point, and is rather an expert in these matters...

Mouse1812

While it is correct you (or your new partner) could purchase your ex’s beneficial interest (BI) back from the OR (cost would be £1,000 plus legal fees of about £250) doing so would not change anything at the Land Registry or on the mortgage re the named owners.

The owners of the property hold two forms of ownership. Legal title (control) and Beneficial Interest (right to sale proceeds). See this for more info.

If you buy the BI back your ex would be left without any beneficial interest, but would retain legal title and therefore some degree of control. The most significant issue would be the requirement for his signature should you ever wish to sell. It is apparently possible to remove his name from the land registry title deeds with the consent of the mortgage company but I suspect difficult to achieve in practice. The best person to talk to would be a solicitor experienced in property matters.

My understanding is that mortgage lenders will never agree to remove anyone’s name from the mortgage unless they believe the remaining party can meet the repayments. As you know you have a problem here and that is a bigger problem for your ex than for you. The OR has no jurisdiction over this and can neither agree nor disagree.

There is however nothing the mortgage company can ever do to force your ex to pay another penny towards the mortgage. Should you ever sell with a shortfall then as far as your ex is concerned that shortfall would be part of his bankruptcy and irrecoverable from him.


Would your new partner be in a position to buy the property? He would need a good deposit to take the house out of negative equity before he could secure a mortgage but that might be a clean option. Alternatively would the mortgage company be prepared to add his name to the mortgage in place of your ex? You need to talk to the mortgage company about this option.

If this is a possible route I can advise further on how to protect yourself and the children.

Nursey1984

Yes this is an option. My partner has a good credit rating. My parents can also help and would be happy to be guarantors. I need to keep a home for the children, whether it be here or whether I can sell and start afresh. I am just concerned whether getting a mortgage for another house is even doable with my partner and parents help