Ex now bankrupt, we own a house together, lots of advice needed!

slimdog

Long story short,
Ex left me and daughter 5 years ago, we own a house together (not married) it has been very acrimonious, and he has not contributed to the house at all since then.
I have this last year got married and been forced to move out, and I have let the house, which ex is against. I have kept what little excess rent there has been, and have ploughed it back into the house, which was a wreck when he left.
Anyway, got a letter from Insolvency people, ex is bankrupt, they want copy of tenancy agreement, and his share of the rent kept for them.
Do I need to comply with what he asks for?
Secondly, I am very confused re beneficial interest. I can afford to buy him out with a lump sum (have tried before but he uses the house as blackmail) BUT if I have to reapply for the mortgage I won't get it, as I don't earn enough for them. I can however afford the mortgage when it's let, and during periods it is not.
So, what exactly would I be buying? Do I need to apply to the bank etc, or do I arrange for valuations, make an offer and it's passed over to me once I have paid etc?
I'm waiting for legal advice as well, but the letter only came yesterday so not much I can do today.
I am very concerned that it's half mine, I'm not bankrupt, I'm paying the mortgage and suddenly it could be sold at god knows what price to whoever!
I'm obviously really concerned.
I loathe this man, we have a child together, and he has done everything in his power to destroy us this last few years, bankruptcy now seeming to be his final act.
Any help very much appreciated x

slimdog

Ok, can someone at least tell me how much *i* need to assist the receiver?
I am not the bankrupt party, nor do I wish to assist him particularly, but I don't want to end up in court either??

TheGardener

Hi - this board is pretty quiet over the weekend and its a BH weekend as well so don't worry if it takes a couple of days to get a response - someone who can answer your question will be along soon.

alastairq

Firstly, he will not have petitioned bankruptcy to make life awkward for you.

He will have been Insolvent..ie, unable to meet his debts, [unsecured debts] as they fell due.
The house you shared is one of his assets...and the Official Receiver will be keen to realise those assets for the benefit of creditors.

Beneficial interest is, simply, the percentage share a person has in the equity of an asset.

This percentage will vary, in your case, with a 'shared' asset, depending on how long you have lived in it together, how long he has been absent, and how much he has contributed [either financially, or in kind]...towards the property.

Since you have rented the property out, then ,technically, your ex has an interest in the rent collected [dependant on his percentage share of the equity].

This, firstly, seems to be what the Official receiver is out to recover...as an asset in his bankruptcy.

If you purchase your Ex's interest in the property, that means you will purchase [from the Official Receiver, who now holds that interest]....your Ex's share of any equity in the property.

You will need to obtain several property valuations. Ask for valuations to sell quickly, these will be lower.

The Equity will be the amount over & above that owed on the mortgage [& any other secured debts on the property]....of the accepted valuation.

You should be aiming to get the lowest possible valuation to support your side of the argument.

If the OR is in agreement, then you pay the OR to purchase the remaining interest, thus the entire equity in the property becomes yours.

You may need to negotiate with the OR over the precise figure.

The mortgage, although a joint mortgage, ought to continue...as it is a separate issue to equity.

[although, if you do default on the mortgage payments, the mortgagor will pursue your Ex for the balance. If he choses to ignore the mortgagor, then the property is repossessed, & sold. If there is any shortfall in equity, then your Ex will be protected from paying the mortgagor that shortfall by his Bankruptcy...You, however, will be liable for the full amount of shortfall [if there is one]..this is a 'worst-case-scenario, and may not apply at all]

You do need to 'assist' the Receiver [as he is a Court official] in this matter...especially if you don't want to find the property is sold by compulsion!

Remember, despite your feelings, your Ex does retain a share of the equity, and any income derived therefrom...or at least, did until he petitioned bankruptcy..that share then became the responsibility of the Official Receiver.

However, on the upside, by purchasing your Ex's share of the equity, in the future, all profit from the property becomes yours alone.

slimdog

Thankyou for the reply.....

Sadly he will have done this solely to get rid of the house it has been a catalogue of stuff with him.

Prior to this I had a family member in there, which the Bank knew about and accepted, as they paid only the mortgage, recently it has been a friend who is a tenant, however the bank is not aware of this (although I am sure the receiver has made them aware.....)

I have been reading up, and it looks very different if it is let out, as the bank can start repossession against us, and i can't get to grips with how to buy him out.

I was hoping to get valuations and then negotiate with the bank/reciever for me and my husband to take it on through my husbands company, buying the mortgage out and giving some towards my exs bankruptcy.

I would assume everyone would prefer this to repossession?

He last paid the mortgage five years ago, I have covered repairs, insurance etc.

We know a few agents, so a lowish valuation or two is not impossible.

I'm sure I sound like a cow, I have a great deal of sympathy for anyone who is bankrupt, but it stops at my ex, who has attempted to financially destroy me repeatedly.

slimdog

Sorry......also, if I buy his interest out, how do I get him off the mortgage? I'm a bit confused, I would own it, yet not own it?
I would like to get him entirely out of our lives, that's why I'm wondering if selling it to my husbands company so neither of us "owns" it is better?
I don't want ex to be able to cause troubles at a later point, and I'm pretty certain he doesn't want the house!!

leveller2911

How long is left on your "consent to let" agreement from your lender?.

slimdog

We don't have one, that's the issue.
I didn't realise I needed one until a while ago, and ex has been disappeared for quite a few years, so contact was not particularly possible.
This is why I'm concerned the bank will try to repossess, because i have done this.
I had no clue about pending bankruptcy, we have tried and tried together the property off him.

leveller2911

slimdog wrote: »

We don't have one, that's the issue.
I didn't realise I needed one until a while ago, and ex has been disappeared for quite a few years, so contact was not particularly possible.
This is why I'm concerned the bank will try to repossess, because i have done this.

.

You need to contact the lender and explain. As you are in breach of the mortgage T&C,s they can call in the full debt and or repossess (they don't want to repo if at all possible).

If they grant you a consent to let you will need to start acting like a professional landlord and comply with the regulations and take out landlords insurance.If you don't and god forbid something happends to your tenant in the house (ie electic fault,gas fault etc etc) you will be legally liable. Do not stick your head in the sand any longer and contact your lender and come clean.If you don't and they find out it will impact on your future with regards to taking out another mortgage.

Consent to let is usually seen as a short term option.If you are allowed to converted the existing residential mortgage to a BTL mortgage you will need to have at least 25% equity and the rent must cover 125% of the mortgage AFAIK.Even then there will be issues with your husbands interest in the property.

I would post on the mortgages sections as there are some good guys/girls on there who will advise you.

Good luck

slimdog

Thanks, I do have the insurances, gas certificate etc, I'm not awful like that! I just didn't realise I needed a consent to let. Call it stupidity, but I just didn't.......

I'm happy to speak to the bank.....BUT.......they will also want ex to sign the consent won't they? And I'm guessing he won't........unless the trustee can act for him? I don't know.

leveller2911

slimdog wrote: »

I'm happy to speak to the bank.....BUT.......they will also want ex to sign the consent won't they? And I'm guessing he won't........unless the trustee can act for him? I don't know.

Remember that once the CTL has lapsed if they won't extend it and you have to re-mortgage with another product you will need to comply with the latest affordability criteria which was introduced a week or so ago and it has tightened up considerably.

I wish you luck with this one and as I say post on the mortgages section, they are really good on there.