Ex is bankrupt, confused & scared

Princessjo25_2

Hi
Sorry in advance for a rambling post.
I've recently got divorced but my ex entered bankruptcy before the decree came through. The trustees are now after their 50% of the equity but I am in a poor financial position (as my ex gambled and built up £40k debts that I partially took on in a joint loan when we were still together) so I can't buy their share.

I do have some options but, even after seeing a solicitor I am thoroughly confused.

The facts

My ex and I have a child who is 10 years old and lives with me.

Mortgage is interest only and a £30k unsecured loan was taken out at the same time as the mortgage (same rate and same repayment term). The trustees won't take the loan off of the equity because it is unsecured, even though my mortgage statement includes this when stating the current balance to repay.

There is £60k equity in the house

The mortgage has one default payment (made by online banking 2 hours after the deadline)

My ex is still named on the mortgage, loan & deeds

I have a new partner, as does he. Neither of us want them involved in this, however my partner has offered to help but this would involve him selling his house & we are still early on in the relationship.

I could potentially borrow some money to pay the trustees off, as the alternative of paying them off over 4 years terrifies me. (I am suffering panic attacks when I receive letters from them)

I have £10k of loans from credit cards which I am paying back gradually. I used to have a debt plan with Christians Against Poverty but it got to a stage where they were no longer willing to help me. Luckily my creditors are being reasonable and have accepted small payments.

I have a lot of questions, if anyone can help with any of these I'd be extremely grateful as I'm struggling.

1) my solicitor told me to apply for a financial order against my ex, which I've done. The trustees have now been told but they believe that this is nothing to do with them. Is it worth continuing with the financial order?
2) are the trustees right not to include the £30k loan when calculating equity? They have missed other things (a £5k loan and cost of sales) so I am loathe to trust that they are correct.
3) after all the issues with the trustees are resolved I want to remove my ex's name from the mortgage. I don't believe a transfer of equity is correct as I will have paid for that by paying the trustees - am I correct?
4) could I remortgage with my new partner, he has a healthy salary, but also has a 75% mortgage on his own place. I can afford the mortgage on my own, and have done so for the last 3 years, but would my debts and poor credit history wipe out my chances?

Sorry for all the questions, I have so many thoughts in my head & I'm getting more confused and panicked with every demand from the trustees. I don't want to lose my house & the threat is behind me all the time.

Thanks in advance for any advice.

HappyMJ

Your new partner could purchase the 50% of equity from your ex and in the process become a joint owner with you and be on the mortgage.

The value of the equity is worked out as market value less 10% for sale costs less secured loans then worked out as how much would someone pay for that equity. It's not always split 50/50 as it's not worth that.

You don't need to rush into this. You can wait a year.

Princessjo25_2

Thanks for the reply, unfortunately it has been a year since he applied for bankruptcy so they can press me now. My partner cannot just buy the equity, it is more complicated than that.

debt_doctor

Princessjo25 wrote: »

1) my solicitor told me to apply for a financial order against my ex, which I've done. The trustees have now been told but they believe that this is nothing to do with them. Is it worth continuing with the financial order? If it is a financial order that the trustee could have no interest in - yes.
2) are the trustees right not to include the £30k loan when calculating equity? They have missed other things (a £5k loan and cost of sales) so I am loathe to trust that they are correct. Yes, they are correct, his liability for the unsecured loan has become part of his bankruptcy, but the liability to pay still stays with you. The equity is sale price minus secured lending and sale costs.
3) after all the issues with the trustees are resolved I want to remove my ex's name from the mortgage. I don't believe a transfer of equity is correct as I will have paid for that by paying the trustees - am I correct? You cannot remove his name without his permission, and similar with a re mortgage. A re mortgage is more likely to be agreed with an ex if it is a liability they want to be removed from. He is still a joint owner - only his beneficial interest has been affected (controlled and claimed) by the trustee, not his legal title.
4) could I remortgage with my new partner, he has a healthy salary, but also has a 75% mortgage on his own place. I can afford the mortgage on my own, and have done so for the last 3 years, but would my debts and poor credit history wipe out my chances? Your mortgage chances will be dented by your poor credit history
.

Hi, I hope that clarifies things a little, although I appreciate it's not great reading for you.
The trustee is only interested in money and will look to realise the bankrupts share in the easiest way possible - but by sale if necessary.
If you or your new partner raise funds to pay off the trustee, then that will clearly stop the trustee selling, but wont affect the fact that your ex still has legal title to the property.
DD

silvercar

I doubt your ex could force a sale until your child leaves school.

Half the equity, less sale costs would be what the Official Receiver would look at. I do wonder if a divorce financial settlement could be agreed and then the OR would be obliged to accept it???

Even if you are looking at half the equity less sale costs, that would give you ownership of the beneficial interest in the home and stop any thoughts of the OR being able to force a sale. (Though my understanding was that the OR could wait until 2 years have passed before assessing this.)