Old mortgage pre bankruptcy

rb211

In about 2002 I took out an interest only mortgage with my now ex wife.

In 2008 I was declared bankrupt, as well as other debts the mortgage was in arrears, about 2.5K. The house was never taken as part of the bankruptcy, she was left to live there with children. I was discharged 1 year later.

Our marriage fell apart and I moved out, the ex now maintains the mortgage, and arrears have increased to around 7K, the mortgage company have threatened repossession many times. I believe there is likely to be no endowment or any other funds to pay off the mortgage when it finishes (in about 15 years)

The mortgage was with GE Money, and just this month I have received letters stating it has been transferred to Engage credit.

So I would like advice on what are my liabilities for this debt now, what would happen should the house get repossessed and should the mortgage go full term with no means to pay it off, what happens in that situation.

Many thanks for any replies

Rob

tigerfeet2006

Basically you have no liability to pay any debt if the house is repo'd but you ex will have full liability to pay any debts outstanding.

silvercar

....should the mortgage go full term with no means to pay it off, what happens in that situation.

The lender will want the mortgage redeemed. A number of options at this point:

1. selling the property
2. remortgaging elsewhere
3. Lender extending existing loan.

Who owns the beneficial interest? Has the OR's interest in your share of the equity been registered on the deeds? Did the BI revert to you or your ex after 3 yrs.

Even if there are arrears, it is very likely that a property bought in 2002 would have increased in value by now. It may be that there is some equity in the property.

TBagpuss

As the mortgage is in joint names, you and your ex are both liable for an shortfall if the sale of the house is not enough to clear the mortgage.

If when you went bankrupt your interest in the house was sold to your ex by your trustee in bankruptcy then the position would be different.

How old are the children, and did you have a formal order in relation to the house when you got divorced?

fermi

rb211 wrote: »

So I would like advice on what are my liabilities for this debt now, what would happen should the house get repossessed and should the mortgage go full term with no means to pay it off, what happens in that situation.

As long as you have not signed anything agreeing to be liable for any shortfall, it remains a bankruptcy debt under s382, and your liability for it is removed.

tigerfeet2006 wrote: »

Basically you have no liability to pay any debt if the house is repo'd but you ex will have full liability to pay any debts outstanding.

Correct.

Note, the status of any BI in the property does not affect the liability for any shortfall.