Advice on a tricky situation....

qwertybai

Hi Folks,

I posted this in the mortgages section but was advised to post it here too. Seeing another solicitor about this today so hopefully will know more but would appreciate any insight.....

Thanks in advance (direct copy from other forum below as cannot link it)

Hi Folks,

New to the boards, sorry my first post is going to be so long winded.

Just over seven years ago myself and a family member purchased a property. We had an agreement that his then girlfriend at the time (now wife) would not not be living in the property and not have a key to the property. Soon after getting the property into a liveable state (a lot of renovations needed) his girlfriend ended up with a key to the place. An argument ensued and ended up with me moving back in with my parents and us not talking for two years or so.During this time I maintained paying half of the mortgage payments, insurances etc.

After several years of this the relationship mended a bit however I got myself into a little financial trouble, nothing major, just had more going out that I had coming in (my own stupidity really). I approached the family member about his partner paying rent for staying in the property (the normal rental income would cover my half of the mortgage almost completely) - they would however not pay normal rental income, instead they said they said she would pay 25% of the mortgage, I would pay 25% and he would pay 50%. I took this deal as seen that as additional money I could use to pay back my debts (at this time approx 15k). This agreement continued on and off for a couple of years (on and off dependant on her working status).

Just over a year ago I decided it was time to move out of my parents house, I was nigh on clear of my debt and am seriously over due getting out on my own. The cost of doing this and paying for the mortgage on the other property left me paying almost double what both of them together were paying. I approached them on the subject, either his wife paying full rent (covering my mortgage payments) or them moving out and we rent the property. Paying the full rent was seemingly not an option and they said they would not be able to move out of the property for approx another year. Another year with the parents really wasn't an option for me and as they were not willing to compromise on the rent, I told them I was not making payments for the mortgage (the monthly DD comes out of the family members account) in lieu of rent.

This obviously did not go down too well but I figured I was already into the house for approx 20k and had never used it so I had to do something. The family member started a small claims action against me for my part of the mortgage to which I was happy to defend. Coming up to the small claims date the family member got in touch with me asking for an "off the record discussion" - to which I agreed.

During this meeting I learned that he had intentionally filled up his overdraft and was in the process of filling up his credit cards and any other credit he could get. The girlfriend who is now his wife has got a mortgage in her name only and his intentions were to stop paying the current mortgage, let the bank forclose on the property (it is in 50k negative equity) and then declare himself bankrupt, the intention of this in his mind is to leave all the debt on me. There have been discussions since, but this is the course of action he is sticking with, the last estimation of his debt is 20k and climbing.

I would also like to add that prior to this getting to this stage I had offered to sign my half of the house over to his wife, I offered to do this coming to an agreement of me paying a portion of the negative equity in cash to them (an amount that would be agreeable to all). I also offered the reverse deal to them, that I would take it on my own if they covered a portion of the negative equity, both were refused.

So, I don't know what my options are, I have spoken to a solicitor that was not very helpful at all. I will have to maintain the mortgage payments on my own in the short term, do I have any way of pursuing him for his half of the mortgage? Is small claims an option? I recorded the conversation between them and I which he outlined his intentions and state how he was going to lie on his bankruptcy proceedings and how he was intentionally putting himself in this position. If there is nothing I can do to retrieve his portion of the mortgage payments is there any way I can secure the payments I have made against future equity in the property? I am reluctant to pay for the property for the next 5 - 10 years and then they still lay claim to half of any equity that is built up.

Any help, insight or advice would be extremely welcome!

silvercar

My advice would be to move into the property. However unpalatable that may be, it is (partly) your property, so you are fully entitled to do so.

With 50k negative equity, I would stop worrying about future equity and concentrate on the current situation.

As for his situation, he risks the official receiver seeing through his plan and getting saddled with a long bankruptcy and BRO/ BRU. All the more likely if you have a recording on the conversation (evil grin).

You really want to financially distance yourself from your ex, and with a joint mortgage you are going to be financially linked. I would think trying to persuade the lender to allow a sale and you each taking an unsecured loan for a portion of the negative equity may be the way forward. Then he could go bankrupt if he wishes and you could try and manage the unsecured loan (which would be little different to paying a mortgage on a property you don't live in). The only other option I can see is for the lender to agree to transfer your ownership to the new wife.

Be clear this negative equity is a liability, getting out of the situation with no debt would be a high enough aim, coming away with some money out of this is highly unlikely.

qwertybai

Hi Silvercar,

Thanks for taking the time to reply.

I had suggested sale of the house, my worry was that when it was sold the remaining debt would be held as the mortgage is held. jointly and severally liable. We were both receptive to this idea however the bank said that the debt would not be split equally and he is either not willing or not able (because of the credit he has already i would presume) to get a loan to cover his half, so ultimately he would be going bankrupt and leaving the full debt with me anyway?

The current thoughts in my head are to do that, move in or rent it, I would like to try and overpay on the mortgage to get it to a state of equilibrium as soon as possible, however the thought of doing this while his name is on the property pains me as I'm paying his debts and ultimately in five years time if I got it to a stage where there was some equity in the house, he could come and take half of it.

I have absolutely no issue dealing with this situation on my half of the debt, if I could walk away from this with a 25k bill tomorrow I would happily take that option, being lumped with his 25k while he swans off in a new house with his wife leaves a bad taste in the mouth though. That there is no legal recourse for this makes it even worse, I just do hope I one day get the chance to have a chat with his OR.

woodformoretrees

What a horrible situation to end up in. If you choose to speak with his OR you have every right to do so.
Your relative sounds like a total sheet.

qwertybai

woodformoretrees wrote: »

What a horrible situation to end up in. If you choose to speak with his OR you have every right to do so.
Your relative sounds like a total sheet.

He and his wife are without doubt two of the most horrible, immoral people I have ever had the displeasure of knowing.....

gettingready

silvercar wrote: »

You really want to financially distance yourself from your ex, and with a joint mortgage you are going to be financially linked..

I do not believe this is OP's "ex", it is just some family member.

Mr_F_Dorsetty

I'll be 100% honest and will say as ever with these sort of matters, one side is posting, not both sides. You have the OP's word for it, you have the OP's word that the other pair are horrible.

Not quite sure what the OP is looking for as they have a solicitor in play, unless they want a lot of 'there there never mind the nasty people and how wonderful you are to put up with it..."

Maybe that is all true and not canted in the OP's favour, maybe it isn't. But the diatribe above is no proof of anything.

If I were the OP I'd settle for what the solicitor advises, paid professional advice is better than taking advice of unknown validity off an internet forum, surely?

woodformoretrees

[STRIKE]yes. whatever.[/STRIKE]

longtermplanner

Unless your job precludes it, then it would probably be sensible for you too think of going bankrupt. Taking over a property with 50k negative equity is a huge financial millstone. Why not walk away from this sorry mess?

The past history really doesn't matter. Yes he and she should have been paying a lot more, either through more of the mortgage or by paying rent to you. But they didn't and (a) you didn't deal with this at the time and (b) you have no hope of getting them to pay you anything now . So galling though it is, it is irrelevant to your decision.

qwertybai

Mr_F_Dorsetty wrote: »

I'll be 100% honest and will say as ever with these sort of matters, one side is posting, not both sides. You have the OP's word for it, you have the OP's word that the other pair are horrible.

Not quite sure what the OP is looking for as they have a solicitor in play, unless they want a lot of 'there there never mind the nasty people and how wonderful you are to put up with it..."

Maybe that is all true and not canted in the OP's favour, maybe it isn't. But the diatribe above is no proof of anything.

If I were the OP I'd settle for what the solicitor advises, paid professional advice is better than taking advice of unknown validity off an internet forum, surely?

I can assure you everything I have posted is 100% accurate and true, every member of our family is unequivocally on my side on this, so much so that our parents were threatened that if they continued to take sides on the matter that they wouldn't see their grand children any more. I'm asking here for advice here because, as I said in the initial thread, I am getting conflicting advice from the "paid professionals" - I assumed (maybe hoped) that I would get some accurate advice here.

qwertybai

longtermplanner wrote: »

Unless your job precludes it, then it would probably be sensible for you too think of going bankrupt. Taking over a property with 50k negative equity is a huge financial millstone. Why not walk away from this sorry mess?

The past history really doesn't matter. Yes he and she should have been paying a lot more, either through more of the mortgage or by paying rent to you. But they didn't and (a) you didn't deal with this at the time and (b) you have no hope of getting them to pay you anything now . So galling though it is, it is irrelevant to your decision.

I totally agree and am not at all looking for any sort of sympathy for the past, I was just outlining the facts. It should never have gotten this far, it just so happened I would have done anything for a quiet life in the past. I haven't looked at bankruptcy or even considered it to this point, I happen to be in a reasonably well paid job and would like to try and keep myself on a sound financial footing if possible.