Ex-partner, negative equity - don't know where to start

Emma1981

Hello all - first post here but long time lurker.

I was hoping someone would be able to offer some advice on my awkward situation... It ticks all the boxes when it comes to how not to do things. We made every mistake possible because of youth and naivety, so please don't slate me... I know I've been an idiot!

My head's been in the sand with the future of my flat since me and my ex boyfriend (the co-owner) split in April 2009, but I want to try and get some closure on it - one way or another.

The flat was bought as a new-build in Dec 2006 for £147,000. We took out a 100% mortgage with a sub-prime lender (Morgan Stanley trading as Advantage, who have now ceased trading....)

Obviously we split up some time after that and, as I was currently still living there, I took over the mortgage payments - which I put on interest only in order to help my finances. He hasn't contributed a penny since 2009.

I met my new partner in late 2010 and have since moved out of the flat and in with him. The flat is now being unofficially rented out to a friend and this just barely covers the mortgage and maintenance fees.

However, I would like to move forward with my life and free myself from the millstone that is this flat. Only trouble is that the flat is probably in around £25-30,000 of negative equity so there is a huge shortfall.

My ex partner has gone silent. I've written letters to his address and that of his parents asking for his ideas on what we can do to move forward and have so far had no response. He has also failed to contribute anything towards the mortgage or upkeep of the property

I think I know I need to sell the property and take the hit for the negative balance - but how would I get him to pay his share too?

I cannot - and don't want to even if I could - remortgage the flat because I do not earn enough to mortgage £147,000 on my own and I wouldn't want to ask my current partner to remortgage with me because of the negative equity.

Should I get in contact with the lender and tell them my situation? They aren't trading any more but are still administrating their existing mortgages. I contacted them initially when we split asking for help but they couldn't because the account WASN'T in arrears. I've never missed a payment. Would they let me sell if I can't get hold of my ex partner?

Should I just stop paying the mortgage, let them repossess it and then go bankrupt for the shortfall? I have a decent credit rating now and no real personal debt (other than the mortgage!) Would this be an option? I ultimately want to be able to buy another property with my current partner in the future.

It's a real complicated subject and I don't know whether to seek legal advice or financial advice or what. It's really getting me down, can anyone help? I'm not an unreasonable person and just want things to be fair really and to move forward with my life without this big black flat-shaped cloud over me.

Thanks guys.

RAS

If you want to be able to buy another property in the future repossession is NOT a good idea.

Is this a joint tenancy or tenants in common?

Would you be able to get a loan to cover the shortfall?

G_M

Bankrupcy is anoption- but very much last resort. It will follow you for years....

Selling will be complex without the co-owner's consent/signature.

Apportioning the debt will be difficult without the co-owner's consent/agreement.

So I'm afraid key to this is getting in touch with you ex, and persuading him to discuss it unemotionally.

Emma1981

Thanks for the replies. I guess I'm going to have to try again to open up channels of communication with him. Perhaps going through a solicitor would provoke a better response? Although I feel it's probably just a waste of cash...

The mortgage was taken out as joint tenants, although he is now married - does this effect anything?

Worst case scenario I could probably finance my half of the shortfall. Would the mortgage company need to see proof that I have the shortfall covered before they allow me/us to sell?

Bankruptcy isn't something I'm keen on... but if I went BR would the mortgage co. then go chasing my ex for the debt? And vice versa?

RAS

Joint and several liability means that you are BOTH liable for the WHOLE debt.

So they could take either one of you to court for the whole debt.

19lottie82

Emma1981 wrote: »

Perhaps going through a solicitor would provoke a better response? Although I feel it's probably just a waste of cash...

Of course it will. And no, not really. It doesn't look like you are going to get anywhere without a solicitor.

Emma1981 wrote: »

The mortgage was taken out as joint tenants, although he is now married - does this effect anything?

No.

Emma1981 wrote: »

Worst case scenario I could probably finance my half of the shortfall. Would the mortgage company need to see proof that I have the shortfall covered before they allow me/us to sell?

This is a joint debt, you are both jointly and separately liable for it. Therefore there is no your half and his half, unless you both make this agreement and stick to it.

If you pay off half of it, it does not put you in the clear. They will pursue both of you for the remainder.

Emma1981 wrote: »

Bankruptcy isn't something I'm keen on... but if I went BR would the mortgage co. then go chasing my ex for the debt? And vice versa?

Correct. If you went BR then your ex would be 100% liable for the debt. And vice versa.

whitewing

Can you get some valuations done before anything else? Then at least you have a proper idea of the scope of the problem. Our house was recently valued at more than is showing online.

Radiantsoul

I think you are wise not to completely discard bankruptcy as an option. It is true it would make it harder for you to get credit in future, but equally your existing mortgage on a home you don't live in is not going to help either.

Firstly I would draw up a list of asset(including a new valuation), liabilities, income and expenditure. Then I would consult a charity that deals with debt and money advise.

Strapped

19lottie82 wrote: »

Correct. If you went BR then your ex would be 100% liable for the debt. And vice versa.

And this is your leverage.

Approach your ex saying that you need to sell the property as you are unable to keep up the mortgage payments. You require his agreement to sell. This involves him stumping up his half of the shortfall to clear the outstanding mortgage. If you are unable to sell then you intend to go bankrupt. He will then be responsible for the debt, and the debt will continue to grow as each month's interest payment is added.

However - what are the chances of him actually being able to raise the money?

I_have_spoken

The mortgage was taken out as joint tenants, although he is now married

I wonder if she knows hubby has a debt liability of ££££s? Would be shocker if you'd opened joint bank accounts etc!

Emma1981

Thanks for all the advice... it's slowly helping me strategise things in my head...

Think getting a valuation is definitely wise... otherwise I'm just guessing. And also I definitely need some pro help.

And yes, I have considered using talk of bankruptcy as leverage... but I think I have to tread carefully there as I don't want inspire him to do the same. Last I heard from him he'd been out of work for some time and claimed to be struggling to prevent BMW from taking his car back... although I know he's now working again at the moment.

I think his radio silence on the matter is an indicator that a) he isn't in a position to be able to fund 'his half' of the shortfall and b) that the new wife doesn't know the full extent of the debt liability. Or a combination of both!

Think it may well be a turbulent few months...

Thanks all!