Complicated but please advise

Brunel2013

Hi, my husband and I separated 2 years ago when I moved out the family home. We had a mortgage and a second mortgage on the house. Six months later he also moved out and stopped paying the mortgage. The house became repossessed and my ex went bankrupt in August 2011. To the best of my knowledge the shortfall of the mortgage was included in the bankruptcy of my ex. However, today I have received a letter from GE finance who we used for the second mortgage advising that there is still a shortfall of £32k outstanding and are wanting me to pay this. At this moment I am not working due to ill health and do not see myself working for at least another 12 months. I have a couple of questions, 1: as the shortfall was included in the ex's bankruptcy do GE have the right to chase me for the debt and 2: what would be my best option to deal with this debt if I am liable for it?

I live in rented accommodation (private) and have very little spare income each month to pay anything significant to GE. I do not receive any maintenance payments from the ex as he is very evasive!

Am I better of advising GE to contact the ex as he is now working and would he have greater chance of paying the money back rather than me?

Thanks for reading and replying

National_Debtline

Hello there.

1: as the shortfall was included in the ex's bankruptcy do GE have the right to chase me for the debt

Unfortunately they do. As it was a joint mortgage both you and your ex have joint and several liability for the money owing. In a nutshell this normally means that either party can be chased for the full amount outstanding. As your ex has become bankrupt their liability has been extinguished - as such it is now only you that is liable for the money.

what would be my best option to deal with this debt if I am liable for it?

There are a number of options available to you. In a nutsell you could either try and pay it off via an affordable monthly instalment or you could also consider an insolvency measure such as bankruptcy.

The following guide provides brief information about all debt-related options:
http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

We also have a very useful guide to dealing with mortgage shortfalls, it could be worth asking for a breakdown of how they have calculated the amount outstanding:
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=11_mortgage_shortfalls

I do not receive any maintenance payments from the ex as he is very evasive!

Have you considered contacting the Child Support Agency?

Best wishes,

David @ NDL.

Anondebtadvisor

If your mortgage and secured loan was in joint names you will be jointly and severally liable for the debt.

If your ex husband went bankrupt his liability only would have been included in the bankruptcy which means you will be responsible for outstanding balance.

If you have no assets and no income you may consider bankruptcy your best option to deal with your debt - you will find some excellent information on this board about bankruptcy

savingjenny

"Am I better of advising GE to contact the ex as he is now working and would he have greater chance of paying the money back rather than me?"

That would be totally pointless as he doesn't owe this money any more as he went bankrupt. When he went bankrupt, this became a debt that was completely owed by you.

If you can't imagine how you could repay this money in a reasonable time (5-10 years? it's up to you what you think is reasonable) then you probably need to look at bankruptcy yourself (unless this would impact your career, assuming you expect to be able to return to work?).

Bankruptcy may sound very worrying, but as you must have noticed, your ex seems to have survived it! If you want to find out more about it there are some pages of info here: http://debtcamel.co.uk/debt-options/bankruptcy/

Brunel2013

Thanks for your replies, it sums up what I guessed but just wanted it clarified as circumstances and the law have changed. I am in contact with the CSA but they are having difficulty extracting information and money from him as he's self employed. Becoming bankrupt is an option I have considered due to the sum involved and as pointed out - the ex survived it! Thank you again

National_Debtline

Brunel2013 wrote: »

Thanks for your replies, it sums up what I guessed but just wanted it clarified as circumstances and the law have changed. I am in contact with the CSA but they are having difficulty extracting information and money from him as he's self employed. Becoming bankrupt is an option I have considered due to the sum involved and as pointed out - the ex survived it! Thank you again

Bankruptcy is a reasonably straight-forward process once you know how it works. The fee does indeed prevent many people from doing it although there are charities and trust funds that *may* be able to help you. Our fact sheet covers the important aspects:

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#3

David.

dancingfairy

Your 3 main options:
1) set up a payment plan. Whatever you can afford for now, to be reviewed when you find work.
2) make an offer. This presumably is not possible for you at this time but if you go on a payment plan this may work for you in the future.
3) go bankrupt.

Have a chat to one (or more) of the debt charities and see which is going to be best for you.
Best of Luck
df