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

alastairq

If a property is mortgaged, then, technically, the mortgagor 'owns' that part of the property's equity which covers the amount due on the mortgage....since the property is the security for the mortgage [loan].

Beneficial interest is, really, a person's share of the equity in a property [ie, that part of a property's value which is..essentially, profit, if you like?]

Your Ex can only be removed from the mortgage if the original account [contract[ is terminated, and a new one [in your name..of, those of you and your spouse]...commenced.

However, you say the mortgagor will not give you alone a new mortgage, as you don't have sufficient earnings? Is that correct?

You may have trouble with the existing mortgagor, over the rental issue.

This fact may be contrary to the T&Cs of the mortgage. The mortgagor will be entitled to terminate the contract.

Your Ex will have nothing whatsoever to do with any negotiations..that is now the job of the Receiver.

That is what happens in Bankruptcy...the Receiver assumes full control of the bankrupt's finances and assets....which will be realised for the benefit of creditors in the bankruptcy.

So your Ex will see absolutely nothing with regards to any benefit from the equity of the property [unless his share of the equity amounts to more than the value of the bankruptcy]

If you cannot find sufficient funds to purchase the Official Receiver's interest in that property, you must sell.

At least you will see the balance of the equity.

Something your Ex will not?

slimdog

That's true......

I can most probably buy his equity out. I don't know what to do in the meantime over the consent to let, but once it needs renewing in any way I can't buy it alone. That's why my husband has said his company could buy it. As it is the mortgage is not tied to their products, it's just tracking as rates are so low.

Can the receiver go into my finances btw? Like I said, we have been split five years, we hate each other, so I certainly don't want to get involved more than I have to!

silvercar

slimdog wrote:

Can the receiver go into my finances btw? Like I said, we have been split five years, we hate each other, so I certainly don't want to get involved more than I have to!

No they can't demand details of your personal finances. However, they can expect you to be forthcoming with details of any joint finances that involve your ex.

Your line should be that you will cooperate on information that involves the ex, but that your private finances are personal.

As the property let is held jointly, the OR will be entitled to details of that. I would have thought that your husband or you should inform the OR that you are willing to buy out your ex's beneficial interest in the property. Once you have established its value, you then need to negotiate on how much of the equity belongs to you. You should be arguing for a high percentage, but if the rent income was used to pay the mortgage, they may not want to accept anything more than 50/50.

Assuming you reach agreement on the value of your ex's beneficial interest, the OR isn't bothered who pays it as long as it is paid.

Once that is sorted, you will own the BI and the mortgage is still in joint names. That doesn't mean much as the lender can't chase your ex for payments as he is bankrupt. It is just a liability that your ex has. But if he didn't pay the mortgage the lender would come after you.

Really the consent to let issue is separate from the bankruptcy, other than to say you need to sort it. Either sell the property or remortgage elsewhere.

I can most probably buy his equity out. I don't know what to do in the meantime over the consent to let, but once it needs renewing in any way I can't buy it alone. That's why my husband has said his company could buy it.

A buy-to-let mortgage product will be based on the potential rental income and the deposit you have. It isn't dependent on your earnings, though most lenders seem to require you to have a reasonable income. You could then put the property in your name alone or your name with your new husband. I'm not sure of the mechanics of this when your ex is bankrupt and not cooperating, but it should be possible given that his bankrupt status means he has no interest in the property.

Given that your ex is bankrupt and you don't have consent to let, the current lender would probably ask you to either take on a BTL product with them or to remortgage elsewhere. Other than write you letters telling you to regualise the situation, I doubt they will do much else.

pleasedelete

sell the house. give the receiver his share. you sound like you cant afford to keep it on a BTL either

slimdog

I can't, but my husbands property company can........

That's why he is prepared to try to buy it.

I think I will email the receiver and just tell him that I wish to get it valued and the company will buy it so that they get some money and we get rid of my ex.

I don't really want to go 50/50 but I don't want to spend time and money fighting either, unless it's possible for me to do so.
I do have a child by him, who he has not maintained ever, and she does have special needs, this is why I have fought like billy o to keep it, because that is all I have for her. I figure if we get valuations, and make a reasonable offer to the receiver we might get shot of it.

The rent has been used to pay the mortgage and any repairs.

They have asked me to hold half the rent for him, from the date of the order (March) so will they be requesting stuff from further back from me? Currently they have asked for the letting agreement.

leveller2911

slimdog wrote: »

I can't, but my husbands property company can........

That's why he is prepared to try to buy it.

QUOTE]


In previous posts you say "you hate him" doesn't really sound viable situation to me.

Just to clarify, your husbands "company" is owned by him? ie he is a director of the company?. If so he may well struggle to buy the property because he is a bankrupt. Even if he did buy it its not his property as it would become the property of the company and as such it can be difficult to realise the asset in the long term.

You really need some professional advice on this.

slimdog

No sorry, I think I am confusing you!

I am married to someone. My husband owns a property company.

My ex partner is bankrupt, not my husband.

slimdog

My husbands company, run by my husband, can take it on!

silvercar

I can't, but my husbands property company can........

That's why he is prepared to try to buy it.

You will at some point in time be given two options by the OR.

1. You (or someone close to you) buy the beneficial interest in the property.

2. The property is sold.

1 only costs half the equity; 2 costs the full value of the property (of which you would get back half the equity, the OR takes half the equity and the mortgage is cleared.)

1 keeps the mortgage in joint names with you owning the equity (I think you may need to get that fact written on to the deeds); 2 rids you of any financial connection with your ex.

Now if you really wanted, your husband's company could buy the BI off the OR leaving him owning half the BI, you owning the other half and you and your ex being responsible for the mortgage. This is messy in that your husband's company isn't on the deeds as owner, though could and should put a charge on the property. Your ex in time may agree to come off the mortgage, then you could do a transfer of equity to transfer the property into joint names with your husband.

If the property is sold, your husband's company could buy it - all the OR would want to know was that the price paid was fair, you could argue that the OR should make some allowance for the estate agent fees that you won't have to pay.

They have asked me to hold half the rent for him, from the date of the order (March) so will they be requesting stuff from further back from me? Currently they have asked for the letting agreement.

From the point of bankruptcy the OR wants half the rent as that is your ex's income. That there is a mortgage to pay is ignored as the OR doesn't care if the property is repossessed - they just want their share out. This is the reason you need to act quickly if you can, if you want to keep the property you don't want mortgage arrears to build up. If you or your husband make payments to keep the mortgage going, that keeps the value of the property. If you stopped making payments, arrears would build up, that increase the outstanding mortgage, that in turn reduce the equity in the property. That means it sells for less or you can buy out the BI for less.

Messy business this is. Every £100 you pay on the mortgage, stops £100 going on arrears, which stops the potential equity dropping by £100, that you would see £50 of (either as equity returned to you from a sale of the property or reducing the buyout. So every £100 you pay, you eventually see £50. Unless you can agree something other than 50/50 with the OR it isn't worth you making mortgage payments if the OR is taking half the rent!

slimdog

Thanks

It does say on the letter that they want his half after allowable expenses, such as repairs and mortgage interest is paid.

I don't pay the capital, as I have refused to pay off the mortgage when I knew he could one day do this, so its interest only. The mortgage us the same now as it was when we bought it. I'm very hesitant to stop paying all together.

I'm thinking the best bet is that we approach the OR and say we will get it valued, and then my husbands company will buy the whole thing from the receiver.

If it was valued with, for example, 20k equity, 10k of that would be mine I presume, so technically it could be sold for the mortgage plus my exs 10k equity? As I wouldn't expect my husband to buy "my" share. Is there any room to negotiate that, or is it a flat 50/50 and nothing less?

I suspect if I can do it, that would be the best way, as I have tried for 5 years to get him off, whilst he says he doesn't want it, but refuses all offers to get rid of it.
I suspect his Bankruptcy won't have changed aspects of his nature, so I would very much prefer NOT to be tied to him on the mortgage in any form, as he would still be able to refuse to come off of it....

Thankyou all for helping, I know it's a lot of questions :j