Mortgage, credit card and divorce

weebubbles

My husband and I split up 7 months ago. We have a joint mortgage of £114500 plus he has a credit card with £5000 debt on it soley in his name and I have a credit card solely in my name with £4000 debt on it. We have 2 kids together and no other kids.

We are trying to figure out where to go from here financially so we can get a separation agreement drawn up. I would love to stay in this house solely for kids sake, their pals are here and school. He hasnt paid anything towards the mortgage in 7 months and doesnt plan to.

He has said he is happy to sign the house over to me but when it is sold whether that be in 2 years or 22 years he wants 20% of the profit. Also he wants me to be responsible for paying off his credit card and that put in writting. I have refused to transfer the debt to my name as he wanted me to do that.

We both paid for the deposit for this house from the sale of our old house that we jointly owned so neiher of us have paid in more than the other.

I am planning on getting some valuations done by estate agent and be honest as to why I want them. Is he asking for too much? Looking at other houses round here we wouldnt get more than £12000 therefore £3000 each. If I was to sell he wouldnt even get £3000 as we would have estate agents and solicitors fees etc. and he would have his credit card. So he would prob walk away with £2000 ish plus he would still owe £5000.

Whats a reasonable split of our finances if I got a mortgage on my own for this house? I cant afford to go to court and if I cant get a mortgage on my own the house would be sold.

Thank you

weebubbles

Also I have spoken to a solicitor about this and he doesnt want to seek legal advice

lika_86

If you've already spoken to a solicitor, what advice do you want from the internet?

krlyr

Have the house valued, factor in legal fees, make an offer based on that.

Unfortunately you cannot force him to accept your offer, but he would have to take it to court to force a sale I believe, and with the kids you're probably in a better position. A solicitor should be able to give you advice on this, that will be more accurate than many of the replies on here.

Personally, I would come to an agreement now, even if it means selling up and buying a place on your own. To have that 20% deal hanging over you indefinitely...it means he would benefit from any of the work you put in to raise the house's value in the next 1, 2, 5, 10 years etc.

TBagpuss

What is the value of the house? Do either of you have any pensions or savings? How do your earnings compare?

It is very common to have an order which entitled one spouse to stay in the family home while it is needed for the children, and for the other to receive a % of the value once the house is sold.

The normal way to work out the % would be to look at what the current equity in the property is, (taking into account likely costs of sale)

So, suppose that your house is currently worth £120,000
Less mortgage of £114,500
less costs of sale of 2% of value = £ 2,400
Current net equity therefore around £ 3,100

If he were to have 50% o that that would be £1,550.
£1,550 is equal to 1.29% of the house'd current value, so a charge back entitling him to 1.29% of whatever it sells for would be reasonable.

If you can afford to re-mortgage in your own name now it might make better sense to simply pay him the £1,500 now!

You would of course need to agree on the value of the house - does he think it is worth more than £120,000?

In terms of the debt, it is reasonable to treat debts built up for the benefit of the family as joint debts, so as far as those are concerned, it depends on firstly, whether you both accept that both credit cards were used to pay for stuff for the family as a whole.
If so, then the next step is to consider how it is fair to split the debt.

On the face of it, he has £5K in his name, you have £4K in ours, so it might be fair or you to pay £500 towards the debt in his name, so you are each paying £4,500.

however, your respective financial positions come into play here. If he earns more than you, it might well be fair to provide that you each pay the debt in your own name - he might be paying a bit more, but if he earns more, that may still be fair. Conversely, if you earn more than him, and more than he is able to earn, then it might be reasonable for you to take on a bit more of the debt.

A court can't transfer debt, so each of you remains liable to your own card company, A Judge could order one of you to pay a lump sum, or maintenance for a limited period, to cover the cost of the debt but given the numbers are so low it is likely that it would cost more to fight over it than the amounts involved.

On the face of it, and assuming tat your figures are correct, it's unrealistic of your husband to expect 20% of the equity in the house (I assume that it what he means by 'profit') when it sells, as tat would mean he was benefitting from you paying the mortgage for the next x years. It is for that reason that it is more usual to work out his share of the equity now, and then express this as a % of the value of the propety (not of the value of the equity) as that way, he benefits from increases in house prices, but not from increases in equity as a result of you paying the mortgage.

Because you appear to have so little equity at present, in our position I would be looking to try to agree a clean break now, particularly if you can afford to remortgage to release him from the current mortgage.

But talk to your solicitor about it, s/he will have a better idea of your position and options.