Split up, in arrears & for sale

chambta

I'm not sure if there's going to be anything constructive for my sister-in-law to do but it's worth asking as it won't be a unique situation.

She bought a property with an ex-partner who ended up being sacked from a bank for dishonesty. He is living in the property and it's currently for sale. The problems are that it's effectively in negative equity (with obvious repercussions if and when sold) and he/they are in arrears on the mortgage. Knowing the system he's just paying frequently enough (the odd couple of hundered here or there) to keep repossession proceedings away.

Though the property is for sale he's deliberately being obstructive to the sale, refusing viewings, advising viewers not to buy it etc.

Short of the obvious, ie paying the mortgage herself which she cannot afford, what can be done? She wants to have the property voluntarily surrendered to the lender but I said I didn't think that would be an option.

Any thoughts?

Dan-Dan

Why does she want to force the sale when assuming she is on the mortgage , the bank will chase her for the balance ?

from the outside looking in , it seems that the ex paying to keep repossesion away , is in her interests as well....?

chambta

The balance on the mortgage is increasing not decreasing. She would rather face the inevitable now rather than months or years later. Obviously her credit rating is in the gutter and the sooner this can be resolved one way or another the sooner she can move on.

Dan-Dan

is the ex not doing what he is doing , the try and save the property , perhaps in time to come , it will eventually turn out to be a good thing (financially) it was saved from repossesion ?

After all , there is only a finite amount of time before the bank goes for repossesion anyway...so if his plans dont work out its inevitable anyway before too long

woody2234

did she buy the property with a partner and they both lived there together then one day she moved out and the ex partner stayed there.

liamfahy

Assuming the mortgage is joint then your sister-in-law is defaulting on her part of the debt.If the property is sold then she will be pursued by the lender for her outstanding part of the debt. If the property is repossessed then she be pursued by the lender for her outstanding part of the debt.
There is no way to make the debt disappear.

Annisele

It doesn't sound to me as though the sister-in-law is trying to make the debts disappear - it sounds as though she wants shot of the link to the ex.

The only way to voluntarily surrender a property to a lender is for all joint borrowers to agree to surrender. If he won't agree, she can't make him. (Theoretically she could take him to court, but that would just rack up legal fees she can't afford to pay - and overall I think it'd make the situation worse).

At this stage, the bank isn't going to release her from the mortgage - with negative equity and arrears, it's going to want to keep the option to chase its money from all possible sources.

Would she be able to keep up the mortgage payments if she moved back in? If it's possible, that option might also have the effect of encouraging the ex to sell.

Depending on the size of the debt she might consider bankruptcy (though that wouldn't immediately make the secured debt disappear, and it has other very serious implications). If she's thinking of that route, she should see a debt advice charity.

chambta

woody2234 wrote: »

did she buy the property with a partner and they both lived there together then one day she moved out and the ex partner stayed there.

Yes.

Annisele wrote: »

It doesn't sound to me as though the sister-in-law is trying to make the debts disappear - it sounds as though she wants shot of the link to the ex.

The only way to voluntarily surrender a property to a lender is for all joint borrowers to agree to surrender. If he won't agree, she can't make him. (Theoretically she could take him to court, but that would just rack up legal fees she can't afford to pay - and overall I think it'd make the situation worse).

At this stage, the bank isn't going to release her from the mortgage - with negative equity and arrears, it's going to want to keep the option to chase its money from all possible sources.

Would she be able to keep up the mortgage payments if she moved back in? If it's possible, that option might also have the effect of encouraging the ex to sell.

Depending on the size of the debt she might consider bankruptcy (though that wouldn't immediately make the secured debt disappear, and it has other very serious implications). If she's thinking of that route, she should see a debt advice charity.

Thanks for the reply. Moving back in isn't an option, they've been split for a couple of years and it became rather unpleasant. Indeed she lives with a new partner in another part of town.

You're right, she's not trying to make it disappear, simply to get rid of the link to him but he's obviously not making that easy.

Kynthia

It seems that the only way to end the issue without things continuing to get worse is for the property to be sold or repossessed. The ex isn't allowing either to happen. Is there someone he trusts that you friend can talk to? They could explain to him that selling the property will leave a much smaller debt than a repossession in the future with increased mortgage arrears.

GDB2222

Sister-in-law has 3 choices, and only 3. None of them are particularly great. Which do you suggest:

a) Go bankrupt and wash her hands of the whole mess.
b) Go to court to force her ex- to sell the property. That's going to be expensive, and he'll argue that it is on the market, etc., so she may not succeed.
c) Leave things as they are.

Fire_Fox

liamfahy wrote: »

Assuming the mortgage is joint then your sister-in-law is defaulting on her part of the debt.If the property is sold then she will be pursued by the lender for her outstanding part of the debt. If the property is repossessed then she be pursued by the lender for her outstanding part of the debt.
There is no way to make the debt disappear.

If the mortgage is joint and the house is owned as joint tenants there is no 'part of the debt', they are jointly and severally liable for the FULL debt. If one goes bankrupt the other will be chased for the full outstanding amount.