repossession shortfall..

mum83

Hi i need some advice

3 years ago I split from my ex partner. For the following year I remained in our house that we owned jointly, with our 3 children and tried as best I could to keep up the repayments on my own... eventually I gave up and contacted the bank to give the house up for repossession. I now live in rented accomodation, I have moved on and have a new partner. We plan to marry. The bank however has came into contact with my ex and is chasing him for the shortfall debt on the house (approx. 120 k!) He is filing for bankruptcy... should I do the same or should I wait to hear from the bank?! Will they chase me for the debt when he is bankrupt or will the debt be wiped?

Thanks in advance...

Browntoa

So the mortgage was in joint names then ?

Think that's what you mean but wanted to check

In which case they can come after you for the debt , if so you can make a counter offer to write off the whole debt


Ie , bank wants £120k , you say I can raise £20k as a final offer otherwise I will have to declare myself bankrupt . They may accept to write off the bad debt

If you are not on the mortgage then they will not come after you

TonyMMM

If the mortgage was in joint names, then you will both be "jointly and severally liable" which means they can come after both of you or either of you for the full amount outstanding.

Wait for them to make contact - but expect to hear from them at some point.

They might just settle for a much smaller amount if you/your ex can raise any cash to offer them.

mum83

I think they are coming after him as he has received a letter for the full amount and I have not. What happens to the debt after he declares himself bankrupt? Do they chase me at that stage?

dancingfairy

I would be cautious not to open any joint accounts with a new partner until this issue is resolved otherwise it will affect both your credit ratings.
You haven't said but if he owns a house and you are moving in with him then it would be wise to do a bit of research as to how to protect this.
( Worst case scenario is that you are seen as financially linked and you end up going bankrupt over the repossessed house and then they come after any equity in the new house). This is pretty unlikely to happen but you should take care until issues with the repossessed house are sorted out.
df
Edit: I believe that the banks have 12 years to chase a mortgage shortfall so it may be preferable to go bankrupt now (I'm assuming you can't raise that much money). I would run it past StepChange or National Debtline.

TonyMMM

mum83 wrote: »

What happens to the debt after he declares himself bankrupt? Do they chase me at that stage?

Almost certainly

National_Debtline

Hello there,

Although I cannot guarantee that they will chase you, they almost certainly will. As Dancing fairy has mentioned they'll have twelve years to do so. As the others have already mentioned, some lenders are willing to accept very low amounts in full & final settlement when it comes to mortgage shortfalls - if you are able to raise a small amount do consider making a settlement offer to the lender. There is a distinct process to follow, you can read more here. An alternative option is to make yourself bankrupt, you can read our fact sheet here.

Best wishes,

David @natdebtline