How would this debt be split?

CG77

Ok so hypothetically:

Couple separate and one party stays in house (joint mortgage of two years at time of split).

Party who stays in house takes over payments but both names stay on mortgage.

This carries on for another 5 years (divorce not finalised)

Situation comes to a head and has to be sorted one way or another.

The house is in negative equity by 40k. Who is legally liable for the debt? Both, equally?

marliepanda

Yup I would say both in this situation.

AdrianC

Unless it's a very, very unusual joint mortgage, then all parties are jointly and severally liable for the entire amount.

G_M

Depends on the divorce agreement.

paddedjohn

G_M wrote: »

Depends on the divorce agreement.

The divorce agreement would be totally seperate, the bank/building society would go after both parties and wouldn't need to recognise the agreement.

eddddy

paddedjohn wrote: »

The divorce agreement would be totally seperate, the bank/building society would go after both parties and wouldn't need to recognise the agreement.

Or go after the party who they think they are more likely to get the money from.

For example, if the bank believes one party is penniless and the other party has over £40k in cash and assets - it would be a fairly obvious choice.

saajan_12

As far as the lender is concerned, both people are jointly and severally liable for the entire amount. In other words, they can go after either or both until they are repaid the full amount. Indeed, they may not allow it to be sold without *someone* paying off the shortfall first.

However there may be an agreement between the two of you, regarding the share split and if the lender collects in a different split, the two people can sue to get back to their agreement. e.g. if the lender collected 50/50, but the agreed split was A owns 70% and B owns 30% then B could sue A for 20% of the debt. This often works where there is a divorce settlement, but otherwise such an agreed split can be hard to prove.